CPA Voice - July/August 2022

JULY | AUGUST 2022

Accounting and auditing in supply chain crisis

The diversity minute: Integrating DEI into the flow of work

The fight against fraud— Knowledge is power

JULY | AUGUST 2022

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2 | CPA Voice

CONTENTS JULY | AUGUST 2022

feature

Volume 14, Issue 4 EDITOR Jessica Salerno-Shumaker – jsalerno@ohiocpa.com GRAPHIC DESIGN Kyle Anderson – kanderson@ohiocpa.com EDITORIAL OFFICES CPA Voice 4249 Easton Way, Suite 150 Columbus, OH 43219

6 Accounting and auditing in supply chain crisis Supply chain challenges bring new business risks and disruptions, highlighting the role of trusted financial advisers to lead through crisis.

in depth 2 CEO letter 3 Self-assessment exam Free for members!

4 Profession recognizes changing demands and OSCPA scores wins on BID, SALT bills The OSCPA advocacy team advances legislative priorities for the profession and members.

10 The diversity minute: Integrating DEI into the flow of work Taking the time to integrate DEI thinking is possible in everyday work.

14 When computers take over and make everything taxable: Tales from the Cincinnati Federal Decision A look at a sales tax refund dispute and the court decision.

20 Tips for being a department of one It is possible to excel when you're the only person in your department, but you'll need to be strategic.

22 Developing talent through learning: Determining what and how while balancing competing demands OSCPA has developed a competency model to guide our development and curation of learning content.

24 The fight against fraud—Knowledge is power Fraud is evolving and you need to be prepared for what lies ahead.

28 Navigating the new guidance on qualified plan rollovers A new rule from the U.S. Department of Labor could create a regulatory landmine for investment advisers.

31 Learning events at a glance

Tel: 614.764.2727 Email: CPAVoice@ohiocpa.com Website: www.ohiocpa.com ADVERTISING For our display advertising rates or a copy of our media kit, contact us at sales@ohiocpa.com or by call 614.764.2727.

ARTICLE SUBMISSIONS We welcome submissions of analytical articles on issues relevant to Ohio CPAs. Desired length is 800-1200 words. Send an electronic copy with a cover letter to the editor at the email address above. Please note that CPA Voice is not a peer-reviewed journal.

SUBSCRIPTIONS/CIRCULATION Members of The Ohio Society of CPAs receive CPA Voice as a member benefit.

Nonmembers may subscribe for $39.95 annually. To update your mailing address or to subscribe to CPA Voice, contact your Member Service Center at 614.764.2727, option 2.

REPRINTS To order reprints of CPA Voice articles, or for reprint permission, contact the editor at the address above.

CPA Voice is the official magazine of The Ohio Society of Certified Public Accountants. CPA Voice’s purpose is to serve as the primary news and information vehicle for the nearly 26,000 Ohio CPA members and professional affiliates. Articles are reviewed for technical accuracy. However, the materials and information contained within CPA Voice are offered as information only and not as practice, financial, accounting, legal or other professional advice. While we strive to present accurate and reliable information, The Ohio Society of CPAs makes no warranties regarding the accuracy of the information provided herein. Readers are strongly encouraged to conduct appropriate research to determine the accuracy of the information provided and to consult with an appropriate, competent professional adviser before acting on the information contained in this publication. The statements of fact, thoughts, advice and opinions expressed in CPA Voice are those of the authors alone and do not represent or imply the positions, opinions, nor endorsement of The Ohio Society of CPAs or of its publisher, editors, Board of Directors, or members. It is our policy not to knowingly accept advertising that discriminates on the basis of race, religion, gender, age or origin. The Ohio Society of CPAs reserves the right to reject paid advertising in its sole discretion. We do not necessarily endorse the resources, services or products unrelated to The Ohio Society of CPAs that may appear or be referenced within CPA Voice, and make no representation or warranties about those products or services or the accuracy and claims regarding those products and services. Advertisers and their agencies assume liability for all advertisement content and responsibility for all claims resulting from such advertisements made against The Ohio Society of CPAs. The Ohio Society of CPAs does not guarantee delivery dates for CPA Voice and disclaims all warranties, express or implied, and assumes no responsibility whatsoever for damages incurred as a result of delivery delays.

CPA Voice (ISSN 0749-8284) is published six times per year by The Ohio Society of CPAs, 4249 Easton Way, Suite 150, Columbus OH 43219, 614.764.2727. Subscription price for non-members: $39.95.

Copyright © 2022 by The Ohio Society of CPAs; all rights reserved. No part of the contents of CPA Voice may be reproduced by any means or in any form, or incorporated into any information retrieval system without the written consent of CPA Voice. Permission requests may be sent to the editor at the address above. While care will be given to all materials submitted for publication, we do not accept responsibility for unsolicited manuscripts, and they will not be returned unless accompanied by a self-addressed postage prepaid envelope.

Periodicals postage paid at Columbus, OH and at additional mailing offices. POSTMASTER: Send address changes to: CPA Voice, The Ohio Society of CPAs, 4249 Easton Way, Suite 150, Columbus OH 43219.

JULY | AUGUST 2022

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A WORD from our CEO

Looking toward the future with fresh eyes The calendar year is officially halfway done, and while summer is a time for rest and relaxation it also comes with some reflection.

While the pandemic is not over, it’s no longer the guiding force in our day-to-day lives. Instead, we’ve learned and adapted from the past two years, developing hybrid work schedules, new ways to connect with colleagues and so much more.

As you reflect on everything that you’ve achieved so far this year, I encourage you to look at the second half of 2022 with fresh eyes. Whether you’re on track to accomplish all the goals you set out at the beginning of the year or readjusting your original plans, there is still plenty of time to create positive and meaningful change in your professional and personal life.

At The Ohio Society of CPAs, it is our privilege to grow and evolve with you. While you consider your goals for the remainder of 2022, please remember all the excellent learning opportunities available to you as a member. Coming up we have the October and November Accounting Shows, the MEGA Tax Conference and many other excellent seminars and conferences available. We know how busy your life is, which

2 | CPA Voice

is why our learning is centered around nine core competencies to achieve a comprehensive approach to your development. You can read more about that on page 22.

Like I said above, this is a great time for rest and reflection. You can’t achieve those lofty goals without taking the time to breathe and recharge. In this fast-paced business environment it can feel like there’s no time to relax, but you’ll realize how much better off you are mentally and emotionally if you prioritize a break.

Self-Assessment Exam

SCOTT D. WILEY President and CEO

swiley@ohiocpa.com | 614.321.2218 (office) | 614.546.9430 (cell) Twitter: @ScottDWiley | LinkedIn: www.linkedin.com/in/scottwileycae

JULY | AUGUST 2022 Product ID: #56341 Online Instructions 1. Log in to my.ohiocpa.com 2. Search "CPA Voice" and then find the appropriate exam.

3. If you're a member, click "Enroll." If you're a nonmember, click "Add to cart" and purchase the exam.

Log in to my.ohiocpa.com, look up the exam using the product ID number above and answer the 12 required questions based on content in CPA Voice.

Cost Members Nonmembers

Free $40

Exams remain available online – and may be completed for CPE – through the same month of the following calendar year.

4. On the Confirmation Page click “Go to your learning center.”

5. The exam will be available under the "Current" section. Turn off pop-up blockers, then click "Launch."

Self-Assessment Exam Results Respondents taking the exam online receive their results immediately. Respondents who pass with a grade of 70% or better receive one hour of CPE credit in specialized knowledge, as approved by the Accountancy Board of Ohio.

JULY | AUGUST 2022

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ADVOCACY in focus

Profession recognizes changing demands and OSCPA scores wins on BID, SALT bills

By Jessica Salerno-Shumaker, OSCPA senior content manager

Professional licensing and the CPA Evolution are pushing the profession forward while ensuring CPAs continue to be excellent strategic advisors to businesses and the public.

“I think that there's a very real recognition by an overwhelming number of people that professional licensing, especially as it relates to CPAs, provides a protection of public interest,” said Brendan Fitzgerald, Vice Chair at the Accountancy Board of Ohio and a former chair of the Ohio Society of CPAs Board of Directors.

Fitzgerald said the recent OSCPA-supported change in Ohio to allow students to sit for the CPA exam at 120 hours gives future CPAs the opportunity to begin their career journey sooner, as opposed to waiting to begin until they have 150 hours.

4 | CPA Voice

“That's an important change,” Fitzgerald said. “It does

provide a tool for Ohio business owners to obtain potentially

encourage students and have them look forward to entering

significant federal tax benefits with minimal loss to Ohio or

the profession upon the completion of that last 30 hours.”

municipal tax revenue.”

Fitzgerald said CPA Evolution, the licensing model that’s a

Gov. DeWine also in June signed House Bill 515 into law.

joint effort of NASBA and AICPA is another step in recognizing

This OSCPA priority bill clarifies that gains from the sale of

the profession’s demands. CPA Evolution aims to identify the

an ownership interest in a business is considered ‘business

changing skills and competencies accounting requires today

income’ for Ohio income tax purposes. H.B. 515 unanimously

and will require in the future. The AICPA Exam team expects

cleared both the House (90-0) and Senate (31-0) on June 1.

to release a blueprint of the new exam for public comment in July. The blueprint will be finalized in early 2023.

During his May testimony, Saul said the sale must satisfy either of the following: (1) the sale is treated for federal

On the legislative front, OSCPA continues to make progress

income tax purposes as the sale of assets – i.e. 338(h)(10);

at the Ohio Statehouse. In June Gov. DeWine signed Senate

or, (2) the seller was involved in the day-to-day management

Bill 246, known as the SALT cap parity bill, which levies a tax

(material participation) of the business during the taxable

on a pass-through entity's income apportioned to Ohio and

year in which the sale occurred or during any of the five

authorizes a refundable income tax credit for an owner for

preceding years.

such tax paid.

OSCPA’s advocacy team was a driving force in ensuring both

IRS Notice 2020-75 is what allowed states to enact legislation

S.B. 246 and H.B. 515 passed before the legislature went

to clarify that taxes paid by a PTE do not count towards an

on summer break, testifying repeatedly in support of each

owner’s capped $10,000 state and local tax deduction for

piece of legislation. The two new laws will take effect in

federal income tax purposes.

mid-September.

“S.B. 246 is a win-win for the State of Ohio and for Ohio business owners,” said Director of Tax Policy, Greg Saul, Esq., CAE. “This unique change to Ohio’s tax code will

JULY | AUGUST 2022

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AUDIT & assurance

Accounting and auditing in

SUPPLY CHAIN CRISIS

By Laura Hay, CPA, CAE, OSCPA executive vice president

6 | CPA Voice

Supply chain challenges bring new business risks and disruptions, highlighting the role of trusted financial advisers to lead through this crisis. Matt Rosen, CPA, director at Barnes Dennig & Co, Ltd., offered the most frequent technical advice CPAs should be aware of during supply chain constraints.

“More than ever, accountants and auditors need to interact

enough to put them in a negative position requiring NRV

with other areas of the business, such as purchasing and

reserves,” Rosen said.

operations, to understand how the enterprise’s risk profile is changing and its impact on audit planning, accounting and financial reporting,” Rosen said. “Understanding what business model changes will stick and how that positions the

Likewise, a business interruption with production stoppage or reduction due to supply or labor shortages could result in an overallocation of fixed costs to inventory.

organization for future value delivery is important in providing

Understanding the true cost of goods and services

a high-quality audit and relevant, decision-useful information.”

becomes more complex as future prices and inputs become

Some accounting and auditing considerations highlighted by

increasingly unpredictable.

Rosen include:

Inventory valuation and storage Understanding what purchasing is doing to address the operational impact affects assessments of inventory risks and obsolescence. For example, if more inventory is purchased in advance, or if more inventory is stored in additional locations, this could result in higher risk being assessed in audit planning and could also result in greater obsolescence reserves. New locations can mean new leases that need to be evaluated.

Purchase commitments To manage against future risks, an organization may enter contracts committing to a certain volume of purchases at a determined price, which exposes the business to market fluctuation risks. Evaluating market risks and disclosing the purchase commitments and unfavorable market pricing may be required.

Inflation and price changes Rising prices not only create valuation challenges, but also a need to better understand what portion of price increases the entity is able to pass on to customers. Prices that are less than costs could create a need for net realizable value reserves.

Understanding the increasing costs of selling and marketing the product is also important to this evaluation.

“If the selling company is covering shipping costs and paying more to ship products with razor-thin margins, that can be

JULY | AUGUST 2022

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Revenue recognition

More information on the accounting, auditing and

Methods of measuring progress toward satisfying a

reporting requirements and other accounting and auditing

performance obligation may become interrupted with business

considerations of supply chain challenges are in the AICPA

or supply disruptions. Using the example of the construction

Center for Plain English Accounting paper, Supply Chain

industry, if contractors are buying more inventory ahead and

Disruptions: Accounting and Auditing Considerations.

holding onto more uninstalled materials in anticipation of

A new Charter for Collaboration from the Institute of

supply challenges or price increases, this may require a change from existing accounting processes to identify these materials to avoid the premature recognition of revenue.

Management Accountants, the Association of Chartered Certified Accountants, and the Chartered Institute of Procurement & Supply discusses how accountants and

On the selling side, as contracts are renegotiated with more

procurement specialists can better work together during

variable pricing relationships in place as companies work to

supply chain constraints. The report asserts that many

manage inflation risks, revenue recognition practices may

organizations don’t fully understand their supply networks.

need to be reexamined.

During a period of increasing regulation and pressure to

“CPAs need to walk down the hall and understand what purchasing, sales and distribution are doing,” Rosen said. “In

disclose ESG supply chain risks, it is critical that these roles work together more closely.

what ways are contracts changing that dictate accounting,

Technology and transparency are essential tools in improving

reporting and disclosures, as well as how is the business

the understanding of the connectivity and information roll-up

model changing that may advise accounting policy changes

throughout the network. Predictive analytics on customer

for the future? Business decisions are having a more direct

trends, the potential for future supply breakdowns, and other

impact on financial practices and CPAs need to be the

business model shifts such as the move to online work and

consultants assisting with navigating these changes.”

consumption can help in developing future production and warehousing plans.

Risks and uncertainties Additional disclosures of risks and uncertainties are likely due to disruptions.

Small or specialized business challenges

The profession’s commitment to ethics makes it the ideal partner to provide this information for users and business decision-makers.

Smaller businesses with fewer resources assigned to managing supply networks or highly specialized or stressed businesses may face a more significant impact on the ability to deliver products or services, causing cash flow, debt, or ongoing concern disclosure needs. Accurate forecasting to predict future cash flow needs will be more complex.

Laura Hay, CPA, CAE, is executive vice president of The Ohio Society of CPAs and staff liaison to the Accounting Auditing and Professional Ethics Committee. She can be reached at Lhay@ohiocpa.com or 614.321.2241.

THREE THINGS need to interact with 1. Accountants other areas of the business, such

prices not only create 2. Rising valuation challenges, but also

analytics 3. Predictive on customer trends, the

as purchasing and operations,

a need to better understand

potential for future supply

to understand how the risk profile

what portion of price increases

breakdowns, and the move

is changing.

the entity is able to pass on

to online work can help in

to customers.

developing future production and warehousing plans.

8 | CPA Voice

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JULY | AUGUST 2022

| 9

DIVERSITY, equity & inclusion The diversity minute: Integrating DEI into the flow of work

By Jamie Ousterout, The Diversity Movement

10 | CPA Voice

One of the most common concerns I hear from individuals at our client organizations is, “I want to learn more about diversity, equity, and inclusion (DEI) and share with my teammates, but I just don’t have time, and I don’t know where to begin.”

I also hear, “I don’t have time to spend 30 minutes on DEI

Did they just spill the coffee all over themselves on the way to

every day, let alone a full day in DEI training,” and “It seems

the meeting? Are they concerned about their child’s grades or

like DEI is such a daunting task. What can I do easily and

behavior at school? Are they anxious about COVID affecting

quickly that will make an impact?”

them or a loved one? Taking a moment to check in and listen

At The Diversity Movement, we strongly believe that DEI is not

is an easy place to start.

something that should be on the side of your desk; it works

When I was in college, I took a Spanish class and began to

better – and is more sustainable – when incorporated into

form relationships with two of my classmates. After class, we

the fabric of your organization and your daily work. However,

would sometimes get a cup of coffee or breakfast together

I also recognize that DEI as an organization-wide initiative

and chat. I grew up in the Catholic faith in Colorado, another

can sound intimidating or discouraging to the manager or

friend grew up in the Jewish faith in North Carolina, and the

employee who doesn’t know where to start or what to say.

other friend in the Muslim faith in the Northeast, respectively.

The answer is to integrate DEI learning into the flow of daily

As we became more comfortable, we started asking

work, so it isn’t just one more thing piled on but a small part

questions about one another’s identities and backgrounds.

of the day’s routine – and hopefully, one that you can look

While I had dear family friends who were Jewish, I had

forward to. Here are practical suggestions and examples you

never met anyone from the Muslim faith. My friend patiently

can use to incorporate DEI into your workflow.

answered my questions about Ramadan, fasting, his

Practice curiosity One of the easiest ways to start incorporating DEI into your daily routine is with equal parts compassion and curiosity. Ask your fellow employees and teammates questions about their lives and do so from a place of genuine interest.

All too often, we (myself included) launch right into business without taking a moment to simply ask: “How are you doing?”

We never know what someone else might be going through on any given day. Are they worried about a sick loved one?

traditional clothing, and more. Similarly, I shared stories about my upbringing and my religion. We all enjoyed hearing about each other's history, but it didn’t feel like learning. It only felt like making friends over coffee.

Enter “The Diversity Minute” How can we translate this idea of casual learning to make it applicable in the modern workplace? Integrate DEI into the flow of work. Give managers and employees straightforward ways to integrate DEI learning and actions into their meetings,

JULY | AUGUST 2022

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interactions, and individual work. Donald Thompson, CEO at

another example, or better yet, challenge yourself or your

The Diversity Movement, calls this a “Diversity Minute.”

teammates to do the same at future meetings.

Culture change doesn’t necessarily have to be an

Find a short video, a quote from a book or article, a social

organization-wide overhaul of processes. Instead of setting

media post, or a story from the news or pop culture around

aside a separate time to discuss DEI topics, start infusing DEI

diversity and inclusion to share with your team.

learning into your everyday habits and rituals. It can start with a daily Diversity Minute built into everyone’s daily routine.

The first time you do it, it may feel awkward or uncomfortable, but I promise that your team will enjoy the break from the regular business routine. They will soon seize the opportunity to think critically and expand their perspectives.

Another fun idea for a meeting is to have your team members share a story about a person that they admire during a particular observance.

For instance, during Black History Month, my team at The Diversity Movement each shared a person they believed is making Black history now. (I chose the ballet dancer, Misty

But, before you dive right in, it’s important to set some ground

Copeland). Similarly, for Women’s History Month, one of our

rules. You might consider saying something like:

clients had everyone share the woman they most looked up

“Today, we’re going to spend the first few minutes of our meeting expanding our perspectives. I want to share a short [video/quote/slide] with you and then have a couple of

to in their lives, either personally, professionally, or historically.

This is an easy, fun and casual way for people to learn more about not just a “diversity” topic but also about one another.

minutes of open discussion. First, I want to recognize that we

Hopefully, these examples and scripts will help you feel more

all have different viewpoints, and I want to welcome everyone

confident in incorporating DEI into your organization. While

to share their thoughts. Participation is not mandatory, but

these moments may seem small or feel uncomfortable at first,

I want to start pulling in different thought starters to help

they offer a joyful way to create a more inclusive workplace

inspire open conversation. Also, remember, I don’t have all

culture by helping you and your team learn more about one

the answers but just want to create a space for conversation

another and other perspectives.

and sharing.”

Jamie Ousterout is head of client services

Maintain momentum

for The Diversity Movement and a Certified

I challenge you to try this when you kick off (or close) your

Diversity Executive (CDE).

next department or team meeting. And then feel free to use

12 | CPA Voice

GOT ETHICS? Ethical issues can be multi-faceted and difficult to decipher. It takes courage and regular training to spot, evaluate, and address unethical behavior.

OSCPA offers several engaging and thought-provoking learning opportunities in a variety of formats to ensure you’re equipped to tackle whatever ethical dilemma comes your way.

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| 13

TAX When computers take over and make everything taxable: Tales from the Cincinnati Federal Decision

By Derek K. Heyman, PhD, JD, CPA, Zaino, Hall & Farrin

14 | CPA Voice

In Cincinnati Federal Savings & Loan Co. v. McClain, 2022-Ohio-725, issued March 15, 2022, which involved a sales tax refund claim filed by a financial institution, the Ohio Supreme Court held that the Board of Tax Appeals’ analysis of transactions involving a combination of software customization and automatic data processing or electronic information services was erroneous because it did not perform the true-object test required by Ohio Revised Code (“R.C.”) 5739.01(B)(3) (e) The court remanded the case to the board to apply the true-object test to the mixed transactions.

Cincinnati Federal Savings & Loan Co. (“Cincinnati Federal”)

provided for use in business when the true object of the

had engaged Fiserv Solutions, Inc. (“Fiserv”) to provide

transaction is the receipt by the consumer of [ADP], computer

services, including automated processing of banking

services, or [EIS] rather than the receipt of personal or

transactions to maintain Cincinnati Federal’s general ledger

professional services to which [ADP], computer services, or

and subsidiary account ledgers, which Cincinnati Federal

[EIS] are incidental or supplemental.

argued was a nontaxable accounting service. Cincinnati Federal paid Ohio sales tax to Fiserv when it was invoiced for services and submitted a refund claim to the Ohio Department of Taxation for services it claimed were not automatic data processing or electronic information services (“ADP/EIS”) but rather personal and professional services, customization of software, and accounting services, which are not subject to tax in Ohio.

Tax Commissioner and board’s view of customization As discussed by the court, when the General Assembly amended the taxing statute in 1993, it worded the law to tax ADP/EIS when:

The Ohio Tax Commissioner had denied the refund claim, finding, among other things, that there was no customization of software among the services for which tax was collected.

In affirming the Commissioner’s denial of the refund claim, however, the board accepted new evidence and noted that customization may have been included. The board noted that “software customization is a spectrum” ranging from prewritten software with zero modification (taxable as a product) to an entirely new software system created from scratch (nontaxable as a personal/professional service).

The board found that “the services Fiserv provides are in the middle” of the spectrum because Fiserv did not start the software from scratch but “made some modifications

JULY | AUGUST 2022

| 15

to account for Cincinnati Federal’s needs.” However, the

Use of software vs. Purchase of software

board declined to “draw the line on that spectrum” and

In addition to clarifying Ohio sales tax law regarding the

reasoned that customized software is an exemption created by the legislature and “in all doubtful cases the exemption is denied.” The board concluded, “Because the exemption is ‘doubtful’ we reject [Cincinnati Federal’s] argument.”

Personal and Professional in R.C. 5739.01(Y)(2)(e) not an exemption for determining burden.

In reviewing this rejection, the court scrutinized the board’s reasoning, and held that the board erred when it viewed R.C. 5739.01(Y)(2)(e) as a tax exemption and that the board’s erroneous “application of the stringent test for tax exemptions distracted it from applying the true-object test as required by statute.” The court reasoned that none of the R.C. 5739.01(Y) (2) services are “exemptions” carved from the taxable ADP and EIS. Rather, the legislature “defined and carved out those computer-related services as taxable while leaving personal and professional services outside the ambit of the tax.”

Personal and professional services, moreover, are qualitatively different from ADP and EIS in that they are performed by people rather than "primarily by computer systems.”

The statutorily required method of analyzing a mixed

relationship between personal and professional services and ADP/EIS, the court in Cincinnati Federal clarifies two other points that may be helpful to taxpayers: 1. The court found that the assistance provided by Fiserv might have “included some of those service types listed in R.C. 5739.01(Y)(2)(e) in adapting the preexisting software to Cincinnati Federal’s particular needs.” Thus, “software customization” may include the vendor’s choosing from among pre-existing software modules as long as that choice involves “determining how data should be summarized, sequenced, formatted, processed, controlled, and reported.”

2. The court stated that R.C. 5739.01(Y)(2)(e) “encompasses ‘designing ... custom software for collecting business information’ without regard to whether that software as a product is sold to the consumer or is used by the designer itself to provide service to the consumer.” In other words, the software need not be transferred to the consumer for the customization to be exempt.

Both holdings may be helpful to taxpayers.

transaction is to use the true-object test of R.C. 5739.01(B)

Non-taxable accounting services?

(3)(e) to determine what the customer was primarily paying

On the other hand, the court, in rejecting Cincinnati Federal’s

for, the taxable or non-taxable element. Therefore, the court

argument that Fiserv performed nontaxable accounting

remanded the case to the board to perform this analysis on

services, held that for a service to qualify as a nontaxable

those transactions that might include a nontaxable service.

personal or professional service, an individual must perform

16 | CPA Voice

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Delivering Results One Practice At a time JULY | AUGUST 2022

| 17

the service. Specifically addressing the argument that Fiserv

automated in whole or in part. Based on the decision, a

was performing accounting services as listed under R.C.

fully automated process is likely taxable. Yet these remain

5739.01(Y)(2)(a), the court noted that a professional service

complex issues in Ohio sales tax. For instance, the court did

is one performed by an individual licensed to perform

not specify exactly how much human involvement is needed

the service. Because Fiserv lacked the legal authority to

for a partially automated process to qualify as a personal or

provide accounting services requiring licensure, the court

professional service.

held that the services, even had they been performed by an individual, could not qualify as nontaxable professional services, and because Fiserv’s services were not performed by an individual, they did not qualify as nontaxable personal services, even though the services related directly to accounting.

Further, even if an individual is involved, it may be necessary to determine whether the individual has a license. The court is clear that there is no presumption of taxability where personal and professional services are concerned. The true object test is neutral regarding taxability but, with its reference to “the purchaser’s overriding purpose” or “the

Conclusion

essential reason the buyer enters the transaction,” it contains

The taxpayer in this decision, Cincinnati Federal, did not

an element of subjectivity that must be inferred from the

achieve a clear victory; in fact, they may lose on remand,

objective facts. It is often difficult to apply when the purchase

depending on whether the board finds that the invoices

consists of both tangible personal property and a service,

in the refund claim include billing for the customization

the application is no easier when the purchase consists of

that the court said may have been provided. Moreover,

a service provided in part by automation and in part

Cincinnati Federal lost on its assertion that the software,

by individuals.

when functioning, provides the taxpayer with non-taxable

Derek K. Heyman, PhD, JD, CPA is an

“accounting services.” Once set up, the Fiserv system is fully

attorney at Zaino, Hall & Farrin with 10

automated and, without the involvement of a live person, the

years of experience in state and local

services are taxable ADP/EIS.

tax. He assists clients in a variety of state

The Cincinnati Federal decision should provide clarity to

and local tax areas, including economic

the Commissioner, the board, and taxpayers regarding the

development and tax incentives, refund

proper way to analyze mixed transactions involving ADP/

claims, audit defense, and appeals.

EIS and personal or professional services. The decision may be instructive where an outsourced function has become

THREE THINGS

Federal had engaged 1. Cincinnati Fiserv to provide services,

taxpayer in this decision, 2. The Cincinnati Federal, did not

Cincinnati Federal decision 3. The should provide clarity to the

including automated processing of

achieve a clear victory; in fact,

commissioner, the board,

banking transactions to maintain

they may lose on remand,

and taxpayers regarding the

Cincinnati Federal’s general ledger

depending on whether the board

proper way to analyze mixed

and subsidiary account ledgers,

finds that the invoices in the

transactions involving ADP/EIS

which Cincinnati Federal argued

refund claim include billing for the

and personal or professional

was a nontaxable accounting

customization that the court said

services.

service.

may have been provided.

18 | CPA Voice

Land the perfect professional connection Whether you’re still basking in the glow of passing your CPA exam, a mid-level manager who needs a change, or a seasoned CFO who wants top talent, the OSCPA Career Center is your one-stop-shop to uncover rewarding careers and discover untapped talent.

Employers: • Post jobs • Review resumes • Screen candidates • Expand your reach with enhanced posting options • Explore our recruitment and retention resources Job Seekers: • Search for jobs • Customize your job alerts • Post resumes anonymously • Save resumes and cover letters on your dashboard • Access videos and articles on interviewing, resume writing and more • Get free interview coaching via email or more personalized coaching for a fee

For more info, visit

ohiocpa.com/career-center

CCall CraigMiller Miller CCallOSCPA OSCPA Member Member Craig

CCall OSCPA Member Craig Miller COST SEGREGATION THEMOST MOST POWERFUL POWERFUL TAX TOOL FOR REAL ESTATE COST SEGREGATION ISIS THE TAX TOOL FOR REAL ESTATE JULY | AUGUST 2022

COST SEGREGATION IS THE MOST POWERFUL TAX TOOL FOR REAL ESTATE

| 19

CAREER center Tips for being a department of one

By Jenna Blackwood, Boomer Consulting, Inc

20 | CPA Voice

Whether you’re in HR, marketing, IT, or internal accounting,

like I’m being pulled in many different directions, and it’s

being a department of one comes with a lot of responsibility

tough to focus on my day-to-day responsibilities.

and sometimes conflicting priorities. At the same time, you can start to feel siloed. Because no one else in the organization does the same job as you, it can be tough to find someone to collaborate with and share ideas.

To help with that focus, I block out dedicated time on my calendar. We understand in our company that nobody can schedule meetings over that focus time. We are also allowed to decline meetings that don’t have a clear purpose, which

As Boomer Consulting’s financial and accounting coordinator,

helps us avoid wasting time in meetings we have no valid

I’m a department of one. Here are my tips for improving your

reason for participating in.

day-to-day while continuing to move the company forward.

Try blocking out focus time on your calendar and making it

Develop internal relationships

non-negotiable. Whether you block out an hour a day or a

Recently, we went through implementing new software for

2-hour block a couple of times a week, you’ll probably be

financial forecasting. Last spring, we narrowed our selections

amazed at how much you can get done when you aren’t

down to a couple of options, but I felt stuck in a rut and

switching between tasks and fielding calls, emails and instant

unsure of how to choose the right solution.

messages. This time is invaluable for thinking at a higher level

Fortunately, our CEO, Jim Boomer, helps me in this area during our weekly one-on-ones to make these decisions and give it the final approval after reviewing my findings.

As a department of one, you may be involved in several team meetings and committees, but it also takes intentional effort to develop those relationships that are crucial to your success.

Make that effort to have one-on-ones with other stakeholders in the organization. When you have that relationship, it’s much easier to ask questions and get help rather than trying to muddle through problems on your own.

rather than getting caught up in the everyday tasks that take up so much of our time.

Leverage technology Chances are the client service teams in your firm use some sort of project management or workflow tools to collaborate and track the status of client engagements. Project management tools are also essential for back-office teams, including marketing, HR, internal accounting and IT. If you’re still tracking projects and tasks on paper, leveraging a project management tool like Asana, Monday, ClickUp or Trello can free up time and create efficiencies. Project management tools aren’t just for big firms or client service

Invest in external resources

departments! Many of these solutions are designed for small

Once we selected the new software, I had some training

teams and most offer “freemium” versions if you want to try

but still didn’t feel completely confident with it. As a result,

them out before committing to a subscription.

nothing happened for about six months. I was too busy with

Start using a project management solution for your own tasks

other day-to-day tasks and projects to give it the time and attention needed to implement it fully.

and collaborating with other team members. You can say goodbye to digging through email threads, sticky notes and

Jim recommended reaching out to the solution provider for

notebooks for missing information while trying to juggle your

help. For an additional fee, their client success team helped

responsibilities.

me fully implement the solution and provided additional

These are just some tips for making your work easier in your

training, reference materials, and once a month check-ins.

role. Even if you’re the only person in your department, you’re

It was an additional investment, but the alternative was never

not alone. Seek out the internal and external resources you

to reach the full ROI we expected from our original investment

need to survive and thrive.

into the solution!

Jenna Blackwood is a financial and

Don’t be afraid to seek out external help. Your own team’s

accounting coordinator for Boomer

input is invaluable, but it can only get you so far. Sometimes,

Consulting, Inc. She is passionate about

outside consultants can help you finally move the needle on a

the administrative side of business –both

project and start reaching milestones.

internally and externally. Her primary

Find your focus

focus is on the company’s payroll, human resources, and accounting.

I’m part of several committees in our company, which require participating in scheduled meetings. Sometimes, it can feel

JULY | AUGUST 2022

| 21

LEARNING

Developing talent through learning: Determining what and how while balancing competing demands

By Tiffany Crosby, CPA, CGMA, MBA, OSCPA chief learning officer As business models continue to adapt to disruptions

Sharing leading practices and providing responsive options

and technological advancements, leaders are challenged

that equip leaders to develop their talent are two ways

to successfully develop talent equipped to navigate the

OSCPA functions as your learning solutions provider.

emerging environment. Professionals are expected to wield an ever-increasing set of skills and capabilities that spans the landscape of people, technical and business domains.

Technical expertise is still required but no longer sufficient. In this environment, leaders need to address three challenges as they establish talent development strategies: 1. Determining what knowledge, skills, and abilities are needed and to what level of proficiency.

Determining learning & development needs No magic bullet exists for determining each employee's learning and development needs. From a leading practice perspective, high-performing organizations have developed competency maps, learning academies, or capability models to provide the guidance that employees and their mentors, coaches, or supervisors can use to establish individual learning development plans. In OSCPA’s role as a

2. Creating space for employees to learn the knowledge and skills needed in their current roles and for career progression.

learning partner and trusted adviser, we have developed a

3. Managing learning budgets while still providing relevant, high-quality learning opportunities.

Advance, Town Halls, Accounting Shows, webcasts, sections

22 | CPA Voice

competency model to guide our development and curation of learning content. This competency model is used for and the on-demand portfolio.

Financial Accounting, Reporting & Analysis

Ethics & Professional Standards

Essential Skills & Professional Development Business Management & Strategy

Risk Management & fraud

COMPETENCY BASED LEARNING

Audit & Assurance

We have also packaged learning around key development challenges (e.g., Transformational CPA Corporate Finance Bundle), business issues (e.g., environmental, social, and governance; advisory services), and specialized knowledge domains (e.g., employee benefit plans, health care).

Creating space for learning & development Generally, individuals want to succeed at their jobs and value learning opportunities that grow their professional competence. Therefore, organizations' level of investment in professional development continues to be a consideration of candidates evaluating employment options. However, time pressures and workloads often conflict with employees’ planned learning and development activities, creating stress for those who choose to still participate in the learning program. Leaders looking to combat the stress of learning while continuing to recognize its value and necessity need to take intentional actions to make space for learning on the department calendar. For example, leaders could establish periodic learning days during which employees are expected to engage in a pre-determined learning activity such as a group learning event or a self-selected learning activity such as an on-demand, webinar, or virtual conference. Leaders could also schedule watch parties around scheduled virtual events (e.g., Advance, Town Hall) and engage in a post-event discussion. OSCPA's learning team has supported numerous organizations in planning their learning days as leaders grapple with their own time demands.

Managing learning budgets Learning's value proposition is clear: properly resourced employees with access to the right knowledge and skill resources drive higher performance for their organization.

Average learning hours per employee have continued to increase from 2017 to 2021, ranging from 32-54 hours in 2017

Talent Management & Human Resources

Tax

Technology

to 64 to 80 hours in 2021. These learning hours come with a cost that varies significantly depending on the provider. The costs of internally developed and hosted training are not as easily captured as externally sourced training. Benchmark data suggests that the average learning spend across all size organizations and all employee levels is $1,300 per year. Certain roles and levels require more learning spend, with accounting learning spend starting to trend above the average as role complexity increases and the depth and breadth of knowledge required in the accounting field expands. As organizations continue to challenge spend, learning and development groups have turned to subscription models for a turn-key solution. The quality of these turn-key solutions varies, with many models providing non-interactive compliance-oriented CPE. Removing the tradeoff between cost and value is one of the factors driving OSCPA’s learning partnerships and state collaborations. Through these partnerships and collaborations, OSCPA can bring national, regional, and local thought leaders to our members and related professionals.

The challenges associated with developing (and retaining) talent will not likely lessen in the foreseeable future. Leaders must continue to be innovative, creative, and intentional in determining individual learning and development needs, making space for learning, and managing learning budgets.

OSCPA is excited to be a partner in this journey.

Tiffany Crosby, CPA, CGMA, MBA, is the chief learning officer of The Ohio Society of CPAs and leads the Society’s diversity equity and inclusion strategy. She can be reached at tcrosby@ohiocpa.com or 614.321.2255.

Learn more at www.ohiocpa.com/cpe/competencybased-learning.

JULY | AUGUST 2022

| 23

RISK management & fraud

The fight against fraud—Knowledge is power

By Janice T. Jasinski, CPA, CFE, CGMA, SSB CPAs

Occupational fraud can happen anywhere and at any time.

Unfortunately, small businesses and organizations are particularly vulnerable to occupational fraud because they lack the resources to properly implement internal controls and segregate accounting duties among their limited number of employees. Many small businesses and organizations often adopt an “it can’t happen here” mindset, which could prove to be costly.

Fraud 2022: A Report to the Nations" (Copyright 2022 by

The Association of Certified Fraud Examiners (ACFE)

with the fewest employees had the highest median loss

publishes a biannual study detailing the costs, schemes,

($150,000).

perpetrators and victims of occupational fraud. "Occupational

24 | CPA Voice

the ACFE) was recently released covering 2,110 real cases of white-collar crime occurring in 133 countries and 23 industries. The report estimates that organizations lose 5% of revenue to fraud each year with a $117,000 median loss per case and a staggering $1,783,000 average loss per case.

However, the study recognizes that the 5% benchmark is a conservative estimate because many frauds go undetected or unmeasured. As a result, the true losses from occupational fraud are probably much higher than the study suggests.

Following is a recap of various statistics and other information from "Occupational Fraud 2022: A Report to the Nations" (Copyright 2022 by the ACFE):

Median losses The top five median losses by industry were in real estate ($435,000), wholesale trade ($400,000), transportation and warehousing ($250,000), construction ($203,000) and utilities ($200,000). The study further indicated that organizations

Perpetrators

Ironically, in 12% of the cases studied, there was no attempt

Fraud losses tend to be larger in schemes committed by

made to conceal the fraud.

high level executives/owners and typically take longer to

Fraud detection

detect (median duration of 18 months compared to only 8 months where fraud was committed by employees). Frauds committed by high level executives/owners are challenging because these individuals often have the ability to evade or override controls that would otherwise detect fraud.

Furthermore, these individuals are often in a position of authority that intimidates employees from reporting suspected wrongdoings.

The study also pointed out that only 6% of perpetrators had a

Fraud detection methods play a big part in the length and dollar amount of the fraud. A company that utilizes proactive detection methods tends to detect frauds more quickly and have lower losses than companies that become aware of the fraud through no effort on their own, including notification by the police or by accident.

The top three methods of detection identified by the study were:

previous fraud-related conviction while 85% of the fraudsters

1. Tips (42% of the cases)

exhibited classic red flags prior to being caught, such as

2. Internal audit (16% of the cases)

living beyond their means, having unusually close ties with vendors or customers, unwillingness to share work duties and

3. Documentation examination (6% of the cases)

experiencing personal financial difficulties.

Of the fraud tips received that led to fraud detection, 55%

Tenure

came from employees and 18% from customers, while 16%

There is a strong correlation between a person’s tenure with a company/organization and the size of the fraud. Typically, this is due to the amount of trust that employers place with employees with long tenure. These employees are often thought of as family members or longtime friends. The study also suggests that the longer a person works for a company, the better they become at fraud. In the study, employees with at least ten years of tenure caused median losses of $250,000, which is five times the median loss caused by employees with less than one year of tenure.

Categories of occupational fraud

were from anonymous sources. Per the study, given that the percentage of fraud detected by tips are almost three times the percentage of frauds detected by the second top method (internal audits), companies should target both their employees and outside parties with fraud education and communication of any designated reporting mechanisms.

Fraud training coupled with reporting mechanisms sends a powerful message about a company’s intent to fight fraud and, often, the perception of detection is enough to dissuade any potential fraudsters.

In past ACFE studies, telephone hotlines were the most common mechanism used by whistleblowers. However, in

The study identified three primary categories of occupational

recent years, email and web-based/online reporting have

fraud: asset misappropriation is the most common with 86%

become more common than telephone hotlines. Also,

of the cases, followed by corruption with 50% of the cases

not all tips about suspected fraud are reported through a

and, finally, financial statement fraud with 9% of the cases.

formal reporting mechanism. The study makes clear that

Of the cases in the study, 40% involved more than one of the

whistleblowers may reach out to a wide variety of parties,

three primary categories of occupational fraud.

such as executives, internal audit, direct supervisors and

Fraud concealment

coworkers. Therefore, companies should maintain multiple

Knowing the methods fraudsters use to conceal their crime is beneficial to companies in effectively detecting and preventing similar frauds going forward. The top five concealment methods identified by the study were: 1. Creating fraudulent physical documents 2. Altering physical documents 3. Creating fraudulent electronic documents or files 4. Altering electronic documents or files

ways for reporting fraud and provide guidance to employees on how fraud allegations are handled within the company and what to do if they receive a report about suspected fraud.

Fraud Prevention Strong internal controls practices are the best defense against fraud. However, even in organizations with strong internal controls, fraud can and does happen. Conversely, having weak internal controls often provides dishonest people with opportunities to commit fraud.

5. Destroying or withholding physical documents

JULY | AUGUST 2022

| 25

As previously stated, small businesses/organizations face unique challenges, such as limited financial resources and a smaller number of employees that require many individuals to perform numerous functions. Unfortunately, this means that many of the internal controls that large businesses implement are simply not enacted within smaller businesses; thus, smaller businesses need to evaluate the areas of risk that they are most susceptible to and implement other safeguards accordingly.

In terms of lowering fraud losses, the most effective internal controls in the 2022 study were: CONTROL

PERCENT REDUCTION IN FRAUD LOSS

Job rotation/mandatory vacation policies

54%

Hotline

50%

Surprise audits

50%

Proactive data monitoring analysis

47%

Anti-fraud policy

45%

Fraud training for employees

45%

Formal fraud risk assessments

45%

of reporting mechanisms to encourage tips from employees and other outside parties.

5. The percentage of men perpetrating fraud increased to 73% in 2022 compared to 65% in 2012. While the percentage of females perpetrating fraud decreased to 27% in 2022 compared to 35% in 2012.

6. The gender gap in losses has narrowed. The median loss from male and female perpetrators in 2012 was $200,000 and $91,000, respectively. In 2022, the median loss from male and female perpetrators was $125,000 and $100,000, respectively.

7. Frauds perpetrated by high level employees increased to 62% in 2022 from 56% in 2012.

8. The percentage of cases involving corruption increased to 50% in 2022 compared to 33% in 2012.

9. Frauds involving collaboration of two or more perpetrators have increased to 58% in 2022 compared to 42% in 2012.

Occupational Fraud Trends from 2012 through 2022 The "Occupational Fraud 2022: A Report to the Nations" (Copyright 2022 by the ACFE) revealed the following key trends from 2012 through 2022: 1. Frauds are being caught faster. The median duration for fraud schemes fell from 18 months in 2012 to 12 months in 2022.

2. Frauds are causing smaller losses. As the result of faster detection, the median fraud loss fell 16% from $140,000 in 2012 to $117,000 in 2022.

10. Fewer organizations are pursuing criminal prosecution but more are taking civil action against the perpetrator. In 2012 companies in 23% of the cases pursued civil action, rising to 29% of the cases in 2022.

11. Implementation rates for 17 of the 18 analyzed anti-fraud controls have increased over the last decade.

Fraud experts and advisers in public accounting can help companies reinforce their internal controls and investigate if fraud is suspected. Doing so can potentially save an organization thousands, if not millions, of dollars in losses and put everyone on alert that fraud will not be tolerated.

Janice T. Jasinski, CPA, CFE, CGMA is a principal with SSB CPAs.

3. Over the last decade, fraud training for employees and managers/executives has increased 14% and 12%, respectively.

4. Implementation of hotlines increased 16% from 2012 to 2022 as more companies are recognizing the importance

Occupational Fraud 2022: A Report to the Nations. (Copyright 2022 by the Association of Certified Fraud Examiners, Inc.) For additional learning on this topic, attend OSCPA's Fraud & Forensic Conference on December 20, 2022.

THREE THINGS businesses and 1. Small organizations are particularly

the methods fraudsters 2. Knowing use to conceal their crime

experts and advisors 3. Fraud in public accounting can help

vulnerable to occupational fraud

is beneficial to companies

companies reinforce their

because they lack the resources

in effectively detecting and

internal controls and investigate

to properly implement internal

preventing similar frauds

if fraud is suspected.

controls and segregate

going forward.

accounting duties.

26 | CPA Voice

The Future is in Their Hands. And Yours.

Support the future of the accounting profession by making a gift to The Ohio CPA Foundation or by contributing online at www.ohiocpafoundation.org.

Your generous support: Welcomes the next generation to our profession Introduces students to the benefits and values of becoming a CPA Contributes to leadership development programs that enable students to enter the workforce prepared for success.

Encourages people of all backgrounds to pursue accounting careers so the profession better reflects the communities it serves.

Thank you, your gift makes all the difference! www.ohiocpafoundation.org

JULY | AUGUST 2022

| 27

FINANCIAL accounting, reporting & analysis

Navigating the new guidance on qualified plan rollovers

By Mark J. Gilbert, CPA/PFS, MBA, Reason Financial Advisors

A new rule from the U.S. Department of Labor could create a regulatory landmine for investment advisers—here’s what to know.

Registered investment advisers and their firms have long

the fiduciary adviser must ensure more documentation is

viewed 401(k) and 403(b) plans as great sources of potential

in place to justify any recommendation where the adviser

business. A soon-to-be-retired client, current or prospective,

manages the IRA. Let’s review DOL PTE 2020-02 and some of

might have a six- or seven-figure account balance begging

its implementation issues.

for an investment adviser to manage it. What growthoriented financial adviser is going to miss such a

Determining ERISA fiduciary status

business opportunity?

First, determine if you’re a fiduciary and therefore subject

The U.S. Department of Labor (DOL) wants you to live

is deemed a fiduciary by the DOL if he or she (1) provides

up to your role as a fiduciary adviser when working with

advice or recommendations on securities investing (2) on a

these clients and prospects. Under ERISA, an adviser’s

regular basis (3) pursuant to an agreement or understanding

recommendation that a client roll over assets from a qualified

with the IRA owner (4) such that the advice serves as a

plan into an account to be managed by the adviser or their

primary basis for the owner to make investment decisions and

firm creates a conflict of interest and may be a prohibited

(5) that the advice is individualized based on the needs of the

transaction, subject to sometimes draconian civil penalties

IRA owner. If this sounds like your relationship with your IRA

if doing so increases the compensation the firm earns from

clients, then the DOL says you’re a fiduciary.

the client. On Dec. 18, 2020, the DOL issued PTE 2020-02, which creates an exemption from the prohibited transaction rules if advisers follow certain steps. The rule becomes fully effective between Feb. 1 and July 1, 2022. The bottom line is that the qualified plan to IRA rollover is still permitted, but

28 | CPA Voice

to DOL oversight. When it comes to IRAs, a person (or firm)

Note the fiduciary nature of the client-adviser relationship is characterized by its ongoing nature. If you as a CPA provide, for example, a single recommendation to a client in a specific IRA rollover situation, you’re likely not an ERISA fiduciary and, therefore, not subject to DOL oversight.

Implementing the impartial conduct standards To enjoy the benefits of PTE 2020-02, the fiduciary adviser must comply with the impartial conduct standards defined in the DOL’s Field Assistance Bulletin 2018-02. These include providing investment advice that’s in the best interests of a retirement investor; assessing only reasonable compensation,

accounts. The adviser must make a good faith effort to obtain this information about the qualified plan or document that he or she was unable to obtain it. Develop a format that can easily be reviewed by a third party (like a regulator) to show that you and the client understood the pros and cons of funding an IRA through direct rollover of the qualified plan account balance before the client determines whether to do so.

based on the current competitive marketplace; making no

The firm must also prepare an annual retrospective review

materially misleading statements about the investment;

designed to document and aid compliance with the impartial

and seeking to obtain the best execution of the investment

conduct standards and the policies and procedures referred

transaction reasonably available under the circumstances.

to above. The report is addressed to an executive officer of

The firm must update its written policies and procedures

the firm, who must then certify that he or she has reviewed

such that they comply with the impartial conduct standards

the report. The report covers the trailing 12-month period and

and that a reasonable person would conclude from reviewing

must be completed no less than six months following the end

the policies and procedures that there are no incentives for

of the review period. The initial retrospective review will cover

the firm or adviser to place their own interests ahead of the

the 12-month period ending Jan. 31, 2023—so get ready!

interest of the client.

As we all know, the trend in financial services is for providers

Putting new paperwork in place

to become more transparent to consumers. It’s not just

A firm and/or its advisers must disclose if they’re ERISA

competition and technology driving this wave, but regulatory

fiduciaries to the client in writing. This disclosure should

authorities. The DOL has left no doubt that its reach extends

include a written description of the services provided by the

beyond ERISA plans to include most adviser-managed

firm and advisers and a brief discussion of material conflicts

IRAs. PTE 2020-02 provides tangible, measurable criteria

of interest. This client communication might be crafted in

for advisers to demonstrate this transparency. While I’m

such a way as to provide the client with a summary of the

confident that more guidance will be forthcoming—some of

considerations for deciding whether to roll qualified plan

which may be adviser-friendly—advisers need to take care

assets into an IRA. Finally, the client and adviser should sign

to document the process that a client should follow when

this communication, regardless of whether the assets were

deciding what to do with his or her retirement plan account.

rolled over into an IRA.

It’s a new world when advising clients on IRA rollovers—

While PTE 2020-02 doesn’t specify the form of this analysis,

proceed accordingly.

at a minimum, it’s a good practice to document items such

Mark J. Gilbert, CPA/PFS, MBA, is

as services provided by the adviser and the retirement plan

president of Reason Financial Advisors in

sponsor, investment choices for the IRA and qualified plan

Illinois. Mark has more than 25 years of

account, fees and expenses for both accounts, and various

professional experience in finance

other considerations, such as withdrawal privileges, access

and accounting.

prior to age 59.5, legal protections, etc. In other words,

Reprinted courtesy of Insight, the

summarize in writing the relevant characteristics of both

magazine of the Illinois CPA Society.

THREE THINGS ERISA, an adviser’s 1. Under recommendation that a client

if you’re a fiduciary 2. Determine and therefore subject to DOL

DOL has left no doubt that 3. The its reach extends beyond ERISA

roll over assets from a qualified

oversight. Note the fiduciary

plans to include most adviser-

plan into an account to be

nature of the client-adviser

managed IRAs. PTE 2020-02

managed by the adviser creates a

relationship is characterized by

provides tangible, measurable

conflict of interest and may be a

its ongoing nature.

criteria for advisers to

prohibited transaction.

demonstrate this transparency.

JULY | AUGUST 2022

| 29

MEMBERS in motion

Amal El Chatri

James J. Ellcessor

Alaina C. Fullerman

Amy E. Klenec

Zachary J. Hall

Robert Hinkle, CPA

Shelly L. Phipps

CANFIELD

COLUMBUS

Amal El Chatri, James J. Ellcessor, Alaina C. Fullerman,

Robert Hinkle, CPA, Chief Deputy Auditor for the State

Zachary J. Hall, have joined Ohio CPA Proud firm SSB

of Ohio has received the 2022 National Intergovernmental

CPAs as team accountants. While Amy E. Klenec

Audit Forum (NIAF) David M. Walker Excellence in

has joined as an Administrative and Accounting

Government Performance and Accountability Award.

Specialist and Shelly L. Phipps has joined as an Administrative Specialist.

SPECIAL INTEREST SECTIONS Unique communities. Targeted, relevant content.

Get timely, topical news, plus make valuable connections with industry professionals who share your challenges.

Select your interest:

Social Security Consulting and Education More than 90% of all Social Security recipients do not maximize their benefits. There is a demand for help and guidance when faced with making decisions about Social Security. We can help you be a resource to the millions of baby boomers becoming eligible for Social Security.

Marc Kiner • 513-247-0526 mkiner@mypremierplan.com premiernssa.com

30 | CPA Voice

Financial Acct. & Auditing

Technology

Risk Management & Fraud

Financial Institutions

Talent Management

Not-For-Profit

Health Care

Tax & Financial Planning

Join today

ohiocpa.com/Sections or call Member Services at 614.764.2727, option 2.

LEARNING events at a glance 08/04

12:00 p.m. – 1:00 p.m.

Town Halls 2022

1 credit

08/25

8:30 a.m. – 4:30 p.m.

Financial Institution Conference

8 credits

MULTIPLE

09/21

10:30 a.m. – 3:30 p.m.

Advisory Services Conference

5 credits

MULTIPLE

09/23

8:30 a.m. – 4:30 p.m.

Fall CPE Conference

8 credits

MULTIPLE

10/19

8:30 a.m. – 4:30 p.m.

Health Care Conference

8 credits

MULTIPLE

10/20

12:00 p.m. – 1:00 p.m.

Town Halls 2022

1 credit

10/26-27

8:30 a.m. – 4:30 p.m.

October Accounting Show

16 credits

MULTIPLE

11/16-17

8:30 a.m. – 4:30 p.m.

November Accounting Show

16 credits

MULTIPLE

12/08

8:30 a.m. – 4:30 p.m.

Winter CPE Conference

8 credits

MULTIPLE

12/20

8:30 a.m. – 4:30 p.m.

Fraud and Forensics Conference

8 credits

MULTIPLE

MEGA Tax Conference

MS

MS

Ohio Professional Standards and Responsibilities

Dec. 13-14

Sept. 28 & Dec. 10

8:30 a.m. – 4:30 p.m. | 16 credits

TX

8:00 a.m. – 11:15 a.m. | 3 credits

RE

Fall Advance

Business Entity Tax Tune Up

Individual Entity Tax Tune Up

Complimentary for Members

Oct. 24-25 & Nov. 8-9 8:30 a.m. – 4:30 p.m.

16 credits

Oct. 31-Nov. 1 & Nov. 28-29 8:30 a.m. – 4:30 p.m.

16 credits

Nov. 8, 10, 15, & 18 3 credits

SK

TX

TX

COMPETENCIES Financial Accounting

Audit & Assurance

Business Management

Technology

Ethics & Professional Standards

Tax

Risk Management & Fraud

Essential Skills & Prof. Development

Talent MGMT & Human Resources

Multiple

CREDIT TYPE AC

Accounting

RE

Regulatory Ethics

BL

Business Law

AG

Accounting (Government)

BE

Behavioral Ethics

TX

Taxes

AV

Auditing (Government)

CA

Computer Software & Applications

EC

Economics

PR

Production

BM

Business Management & Organization

CM

Communications & Marketing

ST

Statistics

HR

Personnel/ Human Resources

SK

Specialized Knowledge

Information Technology

AU

Auditing

MS

Management Services

FI

Finance

PD

Personal Development

MULTIPLE

IT

Register today + find more events at

ohiocpa.com/Events22 Explore OSCPA competency framework at ohiocpa.com/CBL

JULY | AUGUST 2022

| 31

Advertisers Index Dell Technologies................................................. 9

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Accounting Practice Sales................................ 17

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32 | CPA Voice

Duffy & Duffy Cost Segregation Experts........... 19 Kathy Brents, CPA, CBI: 501-514-4928 Christy Hudson, CBI: 501-499-4357 Office: 866-260-2793 kathy@accountingbizbrokers.com christy@accountingbizbrokers.com

Premier Social Security Consulting, LLC.......... 30

Accounting Biz Brokers..................................... 32

THE OHIO SOCIETY OF CPAs 2022– 2023 BOARD OF DIRECTORS CHAIR OF THE BOARD Craig Marshall, CPA Ernst & Young Plain City

CHAIR-ELECT

Libby Cullins, CPA, MBA JPMorgan Chase Columbus

PAST CHAIR

Lori Kaiser, CPA, MBA, CGMA Kaiser Consulting Columbus

PRESIDENT AND CEO

Scott D. Wiley, CAE The Ohio Society of CPAs Columbus

VICE CHAIR, FINANCE

Jessie C. Wright, CPA, CGMA, CVA Schroedel, Scullin & Bestic, CPAs and Strategic Advisors, Canfield

DIRECTORS Keenan Cooper, CPA, CISA Grant Thornton LLP Cincinnati

Angela Lewis, CPA Crowe Columbus

Amy Vetter, CPA, CGMA, CITP The B3 Method Institute & Drishtiq Yoga Mason

Rick Fedorovich, CPA Bober Markey Fedorovich Akron

A’Shira Nelson, CPA Wellspring Financial Advisors Cleveland

Mark Welp, CPA, CFE Holbrook & Manter Columbus

Chris Igodan Jr., CPA Nationwide Financial Columbus

Carolyn Smith, CPA, MBA, CRMA Columbus City Schools Columbus

Ellen Wisbar, CPA Mayer Hoffman McCann, P.C. Cleveland

Gregory J. Jonovich, CPA, MBA The Lubrizol Corporation Wickliffe

Aaron Swiggum, CPA/PFS William Vaughan Company Maumee

lately

and wherever you get your podcasts!

on the pocast The Ohio Society of CPAs podcast “The State of Business” releases new episodes on Wednesdays, covering the latest news impacting accounting professionals.

Episode title: Why improved efficiency doesn’t always equal cash savings From the episode: “If I'm working for a business and I'm delivering value, I want to articulate the value proposition more effectively. As a result of learning this information, a CPA can say how they can improve the organization and articulate value more effectively.”

Reginald Lee, co-founder of Business Dynamics & Research, business analytics professor at Xavier University and presenter at the Fall Accounting Shows

ohiocpa.com/Podcast JULY | AUGUST 2022

| 33

Transforming Through Education, Advocacy, News & Connections

No matter where you are in your career or role in your organization, OSCPA has what you, your team (and maybe even your boss) need to excel.

MEMBERSHIP and growing; together we transform careers, business, legislation, and lives.

LEARNING attended and connected through Town Halls and Advance to stay current on hot topics in the profession.

NEWS were delivered twice a week through Takeaways and LegUp to keep you in the loop on the ever-changing business and tax environment.

Renew today by calling 614.764.2727 or going to

ADVOCACY to taxpayers through OSCPA-backed income tax bracket reductions and rate cuts.

PIPELINE to The Ohio CPA Foundation, which allowed us to create one of the largest student pipelines in the nation!

MEMBERSHIP of complimentary learning/CPE included with your membership to keep you current on the topics that matter most.

ohiocpa.com/Renew22