Disclosures: March/April 2016

BROUGHT TO YOU BY THE VIRGINIA SOCIETY OF CPAs

what is inbound marketing?

MARCH/APRIL 2016 I VOL. 29 NO. 2 I VSCPA.COM

Life insurance in retirement

VSCPA chapter spotlights

BaNkINg oN IT Financial education in childhood page 12

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INSIDE this issue

COVer stOrY >>

From Junior Achievement to Girl Scouts, Jump$tart to smartphone apps, there are many ways children can learn the money management skills they need.

ArtiCLes

FeAtures Banking on it

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There are many ways we can ensure our children have the financial literacy skills they need to prepare them for the future.

Cpe

AD inDeX 9

beth A. berk, CPA Digital benefit Advisors keiter Poe group Advisors

How to be present

marketing matters

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How to use inbound marketing

life insuranCe in retirement planning

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Many financial advisors recommend their clients use life insurance to plan for retirement. Is the risk worth it?

Continuing tHe CHapter 20 Learn what makes each VSCPA chapter unique in this continuation from last month’s chapter profiles.

mentoring

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MentorMatch in action

seCtiOns BaCktalk

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president’s perspeCtive

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data draft

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vsCpa news

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Classifieds

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i am tHe vsCpa

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disclosures is published bimonthly for members of the Virginia Society of CPAs.

Our mission is to enhance the success of CPAs.

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virginia soCiety of Cpas

4309 Cox Road Glen Allen, VA 23060 (800) 733-8272 Fax: (804) 273-1741 vscpa.com

From twitter

disclosures disclosures.vscpa.com editorial staff Jill Edmonds Managing Editor disclosures@vscpa.com Chip Knighton Contributing Editor cknighton@vscpa.com David Bass Public Relations & Communications Director dbass@vscpa.com

editorial task forCe Olaf Barthelmai, CPA Adam Chaikin, CPA Cheri David, CPA Jennifer Eversole, CPA Keith Gray, CPA Genevieve Hancock Alesia Lewis, CPA David Peters, CPA Mark Plostock, CPA George Strudgeon, CPA Barbara Sukramani, CPA deadlines Articles and advertising for future issues are due by 5 p.m. on the following dates: May/June 2016 July/Aug. 2016 Sept./Oct. 2016 Nov./Dec. 2015 Jan./Feb. 2017 March/April 2017

BackTaLk you said it

March 1, 2016 May 2, 2016 July 5, 2016 Sept. 1, 2016 Nov. 1, 2016 Jan. 2, 2017

Statements of fact and opinion are made by the authors alone and do not imply an opinion on the part of the officers, members or editorial staff.

#VSCPA #itsabusyseasonthing I take Saturday off instead of Sunday. Some things, like getting a haircut, you can’t do on Sunday.

Friday still holds its appeal as the end of the week and Sunday is quiet so I can get a lot done without interruption.

DAwN JESSEE, CPA Richmond

Post your own #itsabusyseasonthing entry on our Facebook page at facebook.com/VSCPA!

DISCLOSURES

twitterspHere >> VSCPA members spent the morning of Jan. 19 visiting their legislators for CPA Assembly Day, and social media was a big part of the event. Read some tweets from and about VSCPA members below, and see page 25 for more information on the event.

Thank you @DelCPeace for meeting with me and the @VSCPANews during #CPA Assembly Day — @henrYDAVisCPA Thank you @DelRRobinson for your time to discuss the Community Tax Law Project & tax conformity w/ @VSCPANews.

— @PrOFMitCheLL

ViA FACeBOOK >> Such a wonderful celebration of a wonderful man! — In reponse to the page on Sen. Walter Stosch’s Retirement Celebration ELSIE RoSE, CPA

Thank you @KirkCoxVA for meeting with #vscpa today. @jennduff_CPA @VSCPANews — GArYthOMsOnCPA

Met with @SenatorWexton for CPA Assembly Day. #vscpa #cpa — @DeiVesCPA

Richmond

Thanks to Del. Bulova for talking tax conformity #VSCPA — @AVArBiMBA

COrreCtiOn >>

Lots of folks I didn’t get to see today at the GA but I’ll be back — @VPAiGe

The “5 Steps to Fraud Awareness” article in the January/February 2016 issue of Disclosures incorrectly listed author Kevin Doyle’s email address. The correct address is kevinedoyle@ comcast.net. The VSCPA regrets the error.

Thanks to all the #VSCPA members who participated in CPA Assembly Day today! It was great to see such dedication. @VSCPANews #VAGA2016

vsCpa endorsed partners

— @VsCPAeMWALKer

COnneCt: connect.vscpa.com tWitter: @VSCPANews, @FinancialFit LinKeDin: tinyurl.com/VSCPALinkedInGroup FACeBOOK: facebook.com/VSCPA instAGrAM: instagram.com/VSCPA

Get in touch

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from the

at the virginia society of Cpas, we love to hear from you. whether it’s a quick email to a staff member, chat on the phone, Disclosures letter to the editor, tweet tweet,or blog something comment different or something altogether, different let usaltogether, know whatletyou’re us know talking what you’re about, how you talking feelabout, about how different you feel issues about affecting different Cpas issues and how affecting we can Cpas help. and how we can help.

PRESIDENT’S perspective

CPAs: A financial resource for Virginia taxpayers April means many things to

Virginia CPAs. It’s when the weather finally fully comes out of its winter doldrums, with the attendant blooming flowers and blue skies. It’s coming up on the end of the spring semester of college, for those CPAs who are professors (and for those who have children in college). And, of course, it means the federal individual income tax deadline has arrived.

But April has another meaning for Virginia financial professionals — Financial Literacy Month. A decade’s worth of Virginia governors — Tim Kaine, Bob McDonnell and now Terry McAuliffe — have issued a proclamation designating April as the time for Virginians to renew their focus on financial responsibility. The proclamation reads, in part: “WHEREAS, public, consumer, community-based, and private sector organizations throughout the Commonwealth are working to educate the public on personal finance issues and increase financial literacy for Virginians of all ages; and “WHEREAS, it is important to encourage all Virginians to recognize the many educational resources available to the public and it is fitting to encourage responsible financial planning and personal budgeting…”

The VSCPA is among a diverse group of organizations like the ones described in the first paragraph of the excerpt. The Society has long been at the forefront of the financial education movement in Virginia, providing the Commonwealth’s taxpayers with myriad resources to increase their financial literacy.

The VSCPA was instrumental in founding the Jump$tart Coalition for Personal Financial Literacy and supplemented that group’s work with its own award-winning Financial Fitness initiative.

The VSCPA, Jump$tart and other industry groups have been instrumental in implementing the one-credit economics and personal finance requirement for high school graduates in Virginia.

The Society has had to fend off challenges to the requirement as recently as last year, but so far, the requirement has held. The first class of students subject to the requirement graduated last spring.

partners on the workshops. “As long as they have the right information, they can prepare for their students to go to college without it being so burdensome.”

The hard work required to keep the requirement in place is already paying dividends in terms of student and teacher performance.

Getting the right information to Virginia residents is the VSCPA’s main goal in all its financial literacy offerings. And high school students are just one group the VSCPA helps.

We have a long history of helping nonprofit organizations with their financial needs, and our Ask a CPA Email program connects CPAs with taxpayers who need help.

Virginia was one of seven states to receive an “A” from Champlain College’s Center for Financial Literacy in their 2015 report card on efforts to produce financially literate high school graduates.

And that’s just on the organizational level.

VSCPA members, working on their own, are well known for their work to help Virginia’s citizens increase their financial acumen and make the proper decisions. So this April, remember the trust and credibility that comes with the CPA credential, and the financial expertise you can bring to bear to help Virginia’s taxpayers. We can build a better financial future for our Commonwealth, one conversation at a time. n

“Virginia is already starting to show the success from this one standard alone,” Judith Sams, program specialist for business and information technology and related clusters with the Virginia Department of Education, told the VSCPA last year. “We think that the real change is going to come with the change in behavior from our students, which is going to take a couple of years to measure. But with success like this already, we’re in good shape.”

The VSCPA is also working to improve financial literacy for students in the area of college planning. We partnered with several legislators last year for the You Can Afford College workshops, aimed at educating Virginia students and their families on the economics of college.

stephanie Peters, CAE, has served as president and CEO of the Virginia Society of CPAs since 2007. speters@vscpa.com connect.vscpa.com/StephaniePeters

“It is affordable,” said Sen. Louise Lucas (D-Portsmouth), one of the VSCPA’s legislator

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LINE items TAXPAYER ADVOCATE SAYS >>

dirty tricks during tax season

IRS must reveal plans for taxpayer service

Scammers and thieves continue to threaten U.S. taxpayers, according to the U.S. Internal Revenue Service (IRS). ID theft again made the list of the agency’s “Dirty Dozen” series of scams and tricks taxpayers should avoid: 1. Phone Scams — Aggressive and threatening phone calls by criminals impersonating IRS agents 2. Phishing — Fake emails or websites trying to steal personal informationIdentity 3. Identity Theft

Every January, National Taxpayer Advocate Nina E. Olson releases an annual report to Congress reviewing the previous year’s happenings at the U.S. Internal Revenue Service (IRS) and offering feedback and suggestions to help protect taxpayers. The 2015 report focuses on the IRS’s plans to scale back telephone and face-to-face service, among other issues.

4. Return Preparer Fraud 5. Offshore Tax Avoidance

Olson commends Congress for enacting provisions in the Taxpayer Bill of Rights, which she has strongly supported for many years. “The Taxpayer Bill of Rights is the roadmap to effective tax administration,” Olson states. “It is now up to the IRS to more fully incorporate taxpayer rights into everything it does. However, I have significant concerns that the IRS is embarking on a path that will unintentionally undermine taxpayer rights rather than enhance them, thereby eroding taxpayer trust further.”

6. Inflated Refund Claims 7. Fake Charities — Groups masquerade as charitable organizations to attract donations from unsuspecting contributors.

Federal law requires the National Taxpayer Advocate’s report to identify at least 20 of the “most serious problems” encountered by taxpayers and to make administrative and legislative recommendations to mitigate those problems. Top issues of the National Taxpayer Advocate include:

8. Hiding Income with Fake Documents 9. Abusive Tax Shelters

>> THE “FUTURE STATE” PLAN — The IRS has been working on a “Future State” plan since 2014, but has yet to make the plan public. The plan provides details on the IRS’s goals to create online taxpayer accounts as well as how budget cuts will affect taxpayer service. Olson urges the IRS to make these documents available.

10. Falsifying Income to Claim Credits 11. Excessive Claims for Fuel Tax Credits

>> REDUCED SERVICE — Olson says the IRS needs to come clean about its intentions to substantially reduce telephone and face-to-face interaction with taxpayers, and reveal specifics on how assistance will be provided in the future via online accounts. >> DATA SECURITY — The report raises red flags about the consequences of giving tax return preparers more access to taxpayer accounts. “Through a single-minded emphasis on online accounts, the IRS creates a situation where it will face enormous pressure to open up taxpayer account access to unregulated return preparers,” Olson writes.

The full report is at taxpayeradvocate.irs.gov/2015AnnualReport.

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12. Frivolous Tax Arguments — Unreasonable and outlandish claims to avoid paying taxes

Check out in-depth info on each item, including info to share with your clients, at irs.gov. n

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LINE items EXCELLENT EXCEL >>

federally speaking

Remove carriage returns in a snap In the last issue of Disclosures, I explained how you can use Alt+Enter to add a carriage return to an Excel cell to aid in formatting. For those of you who maybe took carriage returns a little too far, or have inherited them from something you copied and pasted into Excel, here is a quick approach to make all those carriage returns go bye-bye: 1.

Open the Find and Replace dialog box by hitting Ctrl+j.

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With your curser in the “Find what:” field, hit Ctrl+j. (It will enter a dot “.”.)

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Enter a space or nothing in the “Replace with:” field.

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Now you are ready to Replace or just Find all those hidden carriage returns.

If you feel the above is too simple, or just does not work for you, there are other ways to remove carriage returns that use formulas or macros, which you can find using your favorite search engine. n

George D. Strudgeon, CPA, CGFM, is an audit director at the Virginia Auditor of Public Accounts in Richmond. Email him if you have Excel topics you want him to cover. * george.strudgeon@gmail.com connect.vscpa.com/GeorgeStrudgeon

Beginning Jan. 5, 2016, the Virginia Board of Accountancy (VBOA) is implementing a $20 re-exam fee for candidates who previously sat for any part of the CPA Exam and are considered re-exam candidates.

If you are one of these candidates, you will see the fee when you log in and apply for one or multiple sections. The $20 fee applies every time you log in to reapply. The fee was initially approved and effective Jan. 1, 2013, but was delayed for system modifications. n

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FISCAL YEAR 2016 OMNIBUS BUDGET BILL The Joint Committee on Taxation estimates the total cost of the tax provisions in the 2016 Omnibus Budget Bill will be $622 billion over 10 years. The bill was signed by President Obama on Dec. 18, 2015.

Tax extenders made permanent Several tax extenders were made permanent in the budget bill; those not made permanent were extended for either two or five years. Permanent extenders include the child tax credit, American opportunity tax credit and earned income tax credit. Bonus first-year depreciation was not made permanent, but was extended through 2019.

Updated ACA deadlines The budget bill contains delays on deadlines imposed under the Patient Protection and Affordable Care Act. The Cadillac tax on high-cost health coverage is delayed two years and is now effective for tax years beginning after Dec. 31, 2019. A 2.3 percent medical device excise tax is also delayed.

IRS RAISES SMALL BUSINESS TANGIBLE PROPERTY DE MINIMIS The U.S. Internal Revenue Service has raised the de minimus safe harbor for deducting tangible property expenses from $500 to $2,500 for small businesses that do not have applicable financial statements. The increase will relieve a burden on small business that must apply complex capitalization rules to small repairs and purchases.

Re-exam fee now in effect

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Top news from the Capitol and other national happenings…

AUDIT FIRMS MUST DISCLOSE AUDIT PARTNERS ON NEW FORM To help make audit reports more transparent, the Public Company Accounting Oversight Board will require audit firms to disclose the names of each audit engagement partner on a new form. The new Form AP will be required for each audit, and the rule goes into effect in 2017. n

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data draft

CHECKING OUR PULSE >>

Virginia’s health is middle of the road In the “America’s Health Rankings Annual Report” from the United Health Foundation, Virginia comes in at No. 21 — not too bad, but with room for improvement. Highlights include: Low incidence of infectious disease, low violent crime rate and low percentage of children in poverty.

In the past 20 years, cancer deaths decreased 11 percent.

Hot national issues in 2016 Sales tax on professional services, conformity with the Uniform Accountancy Act (UAA) and providing services to marijuana-related businesses are hot national issues, according to the American Institute of CPAs’ (AICPA) State Regulation and Legislation Team. Here’s how the issues stack up around the United States: •

which could include CPA services. State policymakers are examining state tax structures to generate new revenue and offset lower personal income taxes.

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Large disparity in health by education level, high smoking levels and low public health spending per capita.

In the past two years, smoking has actually increased 3 percent, from 19 percent to 19.5 percent of adults.

See how Virginia stacks up against the rest at americashealthrankings. org. n

13 STATES will likely consider a sales tax on services,

NEARLY 12 STATES will look at adopting the comprehensive definition of attest found in the seventh edition of the UAA. Virginia is already in conformity with the current version of the UAA.

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6 STATES’ boards of accountancy have issued guidance for CPAs wishing to engage with marijuana-related businesses in need of accounting and attestation services. Currently, 25 jurisdictions allow marijuana for medicinal purposes and four states allow it for recreation, but federally it remains a Schedule I illegal substance.

For more information and stats on AICPA legislative efforts, visit aicpa.org/advocacy. n

Where’s the (marketing) money?

Professional services firms really don’t spend much on their marketing efforts, according to marketing consultancy Hollinden in its “Professional Services Marketing Survey” of more than 550 professionals including accounting, finance, engineering, law and others. More than 80 percent allocate less than 5 percent of gross revenues to marketing. Nearly 31 percent spend less than 1 percent.

Marketing isn’t a dirty word. Check out David Peters’s column on page 10 for a primer on this month’s topic, inbound marketing. n

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BY THE NUMBERS

$97.7 billion The amount of 2015 profits given by the U.S. Federal Reserve to the U.S. Treasury — a new record. The previous year’s profits totaled $96.9 billion. The Fed attributes the increase to mortgage-backed securities and Treasury bonds. n

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CPE

ETHICALLY SPEAKING >>

Being ‘present’ during CPE is about more than just attendance

By Laura E. Seal, CPA education unless we are asked by the Virginia Board of Accountancy to prove ourselves.

When we decide which class to attend, we are investing both our time and our money. There are other parties involved, from the sponsors of the class to the presenter and other attendees.

It is extremely disrespectful to all involved if we are merely “present” in the class and not actively engaged in the presentation.

It is extremely unethical if we sign in and leave immediately, but sign the attendance record in order to obtain all the credit for the class.

Learning in action: A group of attendees discusses the topic at hand at the 2015 VSCPA Business & Industry Conference.

Becoming a CPA is a significant

milestone in the life of every accountant who completes the requirements for the credential. To help ensure that we remain competitive and keep up with the constantly expanding body of knowledge in our field, it is important for us to continue our professional development. By growing and enhancing our skills through continuing professional education (CPE), we are making an important investment in ourselves and our careers — increasing our value to our customers and the public.

In Virginia, we are required to earn 120 hours over a three-year period, which rolls continually. Every CPA is required to take a 2-hour Virginia-specific Ethics course annually. Those of us in public practice providing attest and/or compilation services are required to have 8 hours of accounting-related education annually.

Beyond the restrictions listed above, we are free to choose topics that interest us to either expand our knowledge base or to learn about something new. We are professionals who self-report our continuing

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I am discouraged when I see participants who leave early and claim full credit for the class they signed up to take.

How can we continue to maintain the public’s trust if we cannot be responsible to commit to a 50-minute CPE presentation?

Please don’t get me wrong. There is nothing wrong with taking a comfort break, stepping out to field an urgent telephone call or grab a drink or snack to reinvigorate ourselves. But how can we look ourselves in the mirror if we take a class and spend the entire time on an electronic device engaging in outside activities? And what kind of message are we sending to our peers and others if they witness our unethical behavior?

Let’s all take a step back in 2016 and re-evaluate exactly why we are taking classes and try to get more out of them. Instead of taking courses that merely fulfill a requirement, let’s choose to take classes that interest us more and push us professionally. n Laura E. Seal, CPA, is the current chair of the VSCPA Ethics Committee. She is a partner of Fritz & Company, PC, in Fairfax. leseal@fritzandco.com connect.vscpa.com/LauraSeal

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marketing matters Make yourself useful>>

How CPAs can use inbound marketing

By David Peters, CPA

I have a quick trigger finger.

I have to confess that I take pride in how fast I can delete junk email out of my inbox each morning. Sales solutions? Delete. New financial products? Bang!

Gone with the click of a button. Consulting services that can grow my business? Not worth my time. I am not much better with television or radio commercials. I watch most of my television on demand, and I tend to steer away from shows that won’t let me fast-forward through commercials.

I can’t imagine that I’m much different from most people. With more on-demand entertainment and instantaneous information, we are used to getting what we want right away. No fluff — just what we want, exactly when we want it. If you are a consumer, it’s great. However, from a business standpoint, this trend makes things tough.

How do you get noticed when technology is making it ever easier for customers to avoid you?

One potential solution that has been become popular is inbound marketing. While outbound marketing efforts, like television advertising and email blasts, are aimed at finding customers, inbound marketing efforts are aimed at helping customers find you. Blogs, search engine optimization and webinars make it easier for a customer to identify you when they are looking for your product. If I am looking for a good tax accountant and I see a blog about small business tax credits, I am more likely to seek out the services of the CPA who wrote it. Inbound marketing efforts target customers who are already looking for your product.

While inbound marketing is conceptually simple, it is hard to do well.

Most financial services firms have shied away from it. Some worry that blogs could leave the firm open to liability due to the perception that they are giving financial advice. Others worry that they could be giving away their “secret sauce” if they put too much content online.

However, this reluctance results in many financial services websites that all look the same to the consumer. While face-to-face conversations and referrals may still be the best way to build a client base, more and more consumers are becoming comfortable with buying services online. While we could fight this, it seems more practical to give people what they want — more information about us and our services at their fingertips.

But how do we do this? In the book “Youtility” by Jay Baer, the author implores companies to be more useful to their consumers. By simply being helpful, a business becomes top of mind when customers

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consider their product. For a financial services firm, being useful could mean lots of things. Putting more forms online, such as fact finders or yearly tax organizers, can be useful to clients. That way, they don’t have to reach out to the firm to figure out what they need for an initial meeting.

While we certainly need to be mindful of laws, a company can still post content about general financial matters online, such as common tax deductions. Online portals allowing clients to submit documents more easily could also be a possibility. Online chat options are becoming more popular with banks. Even providing information on price ranges for services, or the type of client that the company specializes in, could be useful to potential consumers. By doing these things, we increase our usefulness. The easier we make it for the potential client to interact with us, the more they will gravitate toward us.

This is not to say that inbound marketing can exist solely on its own.

Traditional outbound marketing efforts like television advertising are still effective in creating consumer awareness. However, if used effectively, inbound marketing can have a pivotal role within the marketing mix of a financial services firm.

You don’t need to necessarily be innovative — just useful to your consumers. Make yourself easy to find, and customers will find you.

n

David Peters, CPA, is the strategic relationship manager and financial advisor for Carroll Financial Inc., in Charlotte, N.C. He is also an adjunct professor in accounting, insurance and ethics, a doctoral student in financial planning and sits on the Disclosures Editorial Task Force. dpeters@carrollfinancial.com connect.vscpa.com/DavidPeters www.carrollfinancial.com The information discussed herein is general in nature and provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Nothing in this article constitutes an offer to sell or a solicitation of any offer to buy any type of securities. Registered Representative of and securities offered through Cetera Advisors Network, LLC, Member SIPC/FINRA. Advisory services offered through Carroll Financial Associates, Inc., a Registered Investment Advisor. Carroll Financial and Cetera Advisors Network, LLC are not affiliated.

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MENTORING Find your right mentoring fit >>

MentorMatch in action People seek mentoring relationships for any number of reasons, whether it’s to tap into mentor expertise in a certain area, gain new skills that the mentor is known for or get insight into possible career paths. The latter was the case for VSCPA member Nidia Cruz, CPA, as she looked for help through the Society’s new MentorMatch program.

Cruz couldn’t have picked a better mentor for her specific need. She is currently working with longtime VSCPA member Beth Berk, CPA, CGMA, an independent recruiter who has been focusing on placing CPAs in the Washington/Baltimore area for 11 years.

“Since I passed the CPA Exam, I kind of felt lost,” Cruz said. “I didn’t take the typical CPA route from college to a public accounting firm. I was a veteran, then went to school and went into business. I didn’t know if I wanted to go the public accounting route. I wanted to get her input on questions I had.”

Cruz first became aware of Berk through some of her articles published by the American Institute of CPAs (AICPA), then reached out once she saw that Berk had registered as a mentor. What she didn’t know at the time was that her own career questions echoed similar issues from Berk’s past.

“Earlier in my career, I chose the wrong type of jobs and environments for myself,” Berk said. “Part of the reason I went into recruiting was to help give people tools or food for thought to help them make better career decisions.”

Berk’s job made her a natural fit for MentorMatch, as she deals with young CPAs looking for new jobs on a daily basis. As she puts it, “I’m constantly giving out guidance or food for thought when I interview people, whether I place them or not.”

And Cruz was ready to listen after taking a non-traditional path to her current position at Anthem. A Brooklyn native, she served in the U.S. Navy from 2002–2006 before enrolling at Saint Leo University, which has traditionally served a large amount of active-duty military members and has campuses on many military bases.

Cruz was thrilled when she passed the CPA Exam, but her background left her short on professors and advisors that many young CPAs have.

“I didn’t have anyone to ask questions to until my first job, and there are some things you can’t ask an employer,” she said.

Berk said: “People get an MBA, this certification, that certification, and they go into the marketplace and organizations don’t know what to do

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Beth Berk, CPA, and Nidia Cruz, CPA

with them. They took all this time to get educated, certified, whatever, and they may not have the role models to guide them.”

Berk and Cruz had had one phone call at the time this article was published. One takeaway that has come from the relationship is some discussion of Cruz’s interest in education. Cruz came away from that conversation with the contact information of several professors Berk knows, and she’ll be supplementing her mentorship experience by getting input from them and other professionals.

Ideally, Cruz can come away from the mentorship with a better idea of what her ideal career path looks like.

“I was having a conversation with her about feeling lost about whether to go the public accounting route,” Cruz said. “She was telling me, ‘You can’t compare yourself to other people. Success means different things to different people.’ Hearing it out loud made me reflect on what it means to other people, and her knowing so many people and connecting people, she’s seen that. I do feel like that’s true. I can’t compare myself to anyone else and find what makes me happy.”

Berk added: “I see so many people in their 40s and 50s and 60s who never feel satisfied in what they achieve in their career. You spend so many hours working to never be satisfied? Life is too short.”

If you’re interested in learning more about MentorMatch or participating in the program, visit connect. vscpa.com/MentorMatch or contact VSCPA Member Engagement Manager Laura Cobb. n

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financial literacy

BANKING ON IT Ways to build financial literacy skills throughout childhood.

By Genevieve Hancock

Before anyone in the field of finance or accounting ever learns a debit from a credit, and before a student learns a debit card from a credit card, children learn the basics of finance through acquiring knowledge of money.

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FINANCIAL literacy

There are many approaches to teaching financial literacy to children with different backgrounds, but one consistent best practice is to start financial education early in childhood.

A physical dollar bill may not change, but a child can learn to stretch that dollar, save for the future or make the dollar work for them through investment if they have role models and a solid financial literacy foundation.

There are different levels of consideration for teaching financial literacy to children, and different age groups and knowledge bases to consider for what each individual child is ready for. Most young children are ready to learn what money is and how it can be used.

Older children can build on that knowledge by learning the relatively advanced concepts of savings, how to define financial needs versus wants and bank accounts. As each block of knowledge builds on each other, complex knowledge of finance, such as interest and credit and how they can both positively and negatively affect the child’s future, can be grasped easily.

Whether children start to learn about financial literacy through a ticket system for earning small toys by helping with cleaning, or through earning an allowance by completing chores around the house, a solid foundation is the first step in the right direction toward a generation proficient in financial literacy

responsibilities. Early in childhood, children can build on this knowledge of financial literacy through the school system, by modeling their parents and teachers, through programs like Junior Achievement, from earning activities and badges in scouting or through online games and applications.

Any habit takes a period of time to form, so it is never too early to start building a solid foundation of financial literacy.

Jump$tart Coalition for Personal Financial Literacy

Virginia Standards of Learning Requirements After an effort that began in 2006 and strongly advocated by the VSCPA, the Virginia Department of Education developed and added a graduation requirement of one credit of personal finance and economics. In addition to building a basic understanding of economics in public education, the class is designed to help students strengthen their skills in personal finance. The course teaches commonly overlooked skills, such as how to protect against theft of identity and personal information, and the effects of compound versus simple interest on savings accounts.

The class proactively assists with financial planning by teaching how to weigh the costs and benefits of different types of bank accounts, financial institutions and credit card features. And it also helps with practical application on more advanced skills to fill out on wage forms such as U.S. Internal Revenue Service (IRS) Form W-4 and basic tax forms.

The requirements for the course are extensive and allow for practice of these more advanced financial literacy skills.

While these skills greatly help older teens and students add on to basic financial skills, they are not a stand-alone finance development course as they also build on preexisting basic foundations of financial literacy.

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The Jump$tart Coalition for Personal Financial Literacy organizes diverse stakeholders to work together toward the organization’s vision of educating a nation to cultivate youth with life-long financial literacy skills. Virginia Jump$tart is associated with the national organization of 49 state coalitions and more than 150 stakeholders.

The Jump$tart Coalition has nationally assisted with state and local policymakers to implement financial literacy guidelines. The Coalition has maintained a best practices guideline for implementation and program design for financial literacy. In 2009, Jump$tart began the first national conference devoted to financial education teachers.

The VSCPA was a founding member of the Virginia Jump$tart Coalition in April 2005.

Tina Lambert Bates, CAE, now the VSCPA’s vice president of member and public relations, served as chair for the first four years.

Virginia Jump$tart offers a Virginia Financial Literacy Summit each fall in Richmond to give educators best practice techniques and resources on integrating financial literacy into curriculum in the classroom. The Summit presents hands-on workshops and two-way communication with guest speakers specializing in the integration of financial literacy ideas for classroom application.

By supporting the educators who teach students financial literacy, the organization is shaping the way that children learn financial literacy. Virginia Jump$tart also offers membership for partners to facilitate on-going communication on projects of financial literacy. These members can receive feedback and recognition on their topics, as well as stay current on updates on financial literacy policy changes and best practices. u

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financial literacy

Junior Achievement of Central Virginia

Virginia has a requirement that high school students must take a course in economics and personal finance, but it is in the minority. According to the National Council for Economic Education, only 17 states have this requirement, and the number of states mandating economics education has dropped from 22 to 20 since 2014.

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During 2016, Junior Achievement (JA) of Central Virginia is celebrating its 50th anniversary of cultivating financial knowledge in the children of Virginia. The nonprofit, run by VSCPA member Daphne Swanson, CPA, offers multiple platforms to become involved with promoting education-based financial literacy. Junior Achievement’s goal is to empower youth to build and own their financial success. One of the more popular fundraising events is Bowl For the Green every spring, where organizations sign-up to raise money for Junior Achievement through pledges and bowling. The event has become a very popular event for companies to give back to the community. Junior Achievement also offers more direct ways to give back through online donations and volunteer work.

Two of the largest Junior Achievement programs directly involve educating students in financial literacy. The JA Finance Park targets middle and high school students by involving them directly in a miniature version of a community, and gives them a life scenario in which the students facilitate mock-processes such as purchasing a car and applying for loans on an income.

The JA in a Day program takes trained volunteers to elementary schools to reinforce basic financial literacy building blocks. JA coordinates with the elementary school and provides materials for the volunteers to study and teach each of the lessons. The lessons take less than the full school day, and the pair of volunteers for each classroom has the support of the classroom teacher.

Each grade level is specifically designed for the appropriate building block of financial literacy to be reinforced in that classroom.

These blocks can range from coin recognition, to the definitions and practice on check writing, to basic entrepreneurship learnings.

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Each of the programs is aligned with the Virginia Standards of Learning and enhanced classroom learning standards.

JA also provides the opportunity for high school students to understand the skills they need to develop for career positions through the JA Job Shadow program. The program is composed of three classroom experiences on career research and preparation for a professional environment. The program then takes the students to a local company in order to see how the learnings can be applied in the workplace.

Financial Literacy Awards Through Scouting Both Boy Scout and Girl Scout troops have the opportunity for scouts to earn a badge from performing tasks with aspects of personal finance management. Girl Scout troops also help to build awareness of the value of money by selling cookies to raise money and earn prizes for the scouts. For younger scouts, depending on the year level and age of the scout, the responsibilities and opportunities for additional badges of cookie selling include developing business skills of marketing, an introduction to business ownership and philanthropy through giving back. Through developing financial literacy skills, business skills and innovation, which are paired with empathy and relationship-building, the Girl Scouts hone their leadership skills. Boy Scouts have similar development through handson sales of popcorn and snacks, which can directly contribute in a commission-type arrangement to the scout’s account for costs.

There are two Girl Scout badges related to financial literacy: the “Ambassador Good Credit” badge and the “On My Own” badge.

The Good Credit badge teaches children the importance of credit and how credit works and requires them to seek out real-life stories on building credit — both good and

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fINaNcIaL literacy

bad. By earning this badge, the girls have an awareness of how to avoid building debt, while still increasing credit scores to enable future investments such as home buying and auto financing.

The “On My Own” badge emphasizes the importance of budgeting. The scouts actively discuss what the most important financial needs are for different scouts and how their needs change as they mature. As a troop, the Girl Scouts create a budget based on the historical costs of events and then determine how many boxes of cookies they must sell to cover those costs.

The Boy Scout Law, which every scout must memorize and understand, says that a scout is thrifty. While earlier Cub Scout badges involve a basic understanding of finance through reuse of materials and the value of unpaid philanthropy and volunteer work, the Boy Scouts’ “Personal Management” badge teaches more advanced financial literacy skills. The badge includes tracking income, expenses and savings for 13 weeks to help the scout understand how their finances increase and decrease and compare to their expectations.

Each scout must show why there were differences in their initial expectations, as well as what their goal is for any positive variances by stressing the importance of long-term savings goals. The badge also requires each scout to research and expand their knowledge base for a basic understanding of the positives and negatives of different types of investments, such as investing in stocks and how stock prices change over a period of time, CDs and mutual funds. Time management goals are also integrated into the activities the scouts perform by writing expectations and tracking their daily activities, and then integrating long-term goals and plans for savings.

APPLiCAtiOns AnD GAMes There are additional ways to start education

on personal finance at home. With the massive increase in technology, many new games for kids center around financial education online or on smartphones and tablet devices. Some of these applications for smartphones can be very boring for children, but some are very engaging. Below are some applications and games centering on money management for kids. green$treets: Unleash the Loot! — An application that gives a child a budget and assists with cultivating knowledge of basic financial literacy and pairs it with learning about endangered animals. The child helps an endangered animal and budgets their available amount in order to help the animal and ultimately release it back into the wild. The application is free and available in both iOS and Android formats. motion math: Cupcake! — A game aimed at a little older age group than Green$treets that lets a child open their own cupcake bakery business and helps them pair the customers’ needs with the costs they spend, as well as set prices on their products. There are multiple versions of this game, including owning a pizzeria and fish food. It is available for iOS devices for $4.99.

The great Piggy bank Adventure — An online game from Disney that guides children through an interactive financial literacy skill-building expedition. As it progresses, the game encourages saving for a goal and earning money through investments. The game also teaches the basics of complex ideas such as asset diversification. Free at http://adisneyland. disney.go.com/media/ap/piggybank/index. html.

literacy, pages on the history of the U.S. economy and financial base and a considerable section on coins. Free at usmint.gov.

There are certain double-edged aspects of learning about financial literacy through technology. A child is putting in effort to “earn” a monetary value for the application, so it does teach the aspect of work and effort and patience for financial literacy skills. On the other side of the coin, these games and applications also may lack the development of practical understanding of how finances affect and are affected by the world outside of the screen. These skills should be supplemented with hands-on learning of financial literacy. n

GeneVieVe hAnCOCK is a technical accountant specializing in complex modeling and changes in accounting guidance as a senior financial reporting analyst for Disney Parks & Resorts Controllership based in Lake Buena Vista, Fla. She is a member of the Disclosures Editorial Task Force.

T.Genevieve.Hancock@gmail.com connect.vscpa.com/GenevieveHancock linkedin.com/in/GenevieveHancock

The U.S. mint website — Has a kids section with a variety of games for building the knowledge base on financial

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FINANCIAL planning

Life Insurance in Retirement Planning

Is the risk worth it?

By David R. Peters, CPA

It seems like every few years, a product comes along that evokes very strong opinions from the financial community. Reverse mortgages, variable universal life insurance and long-term care insurance come to mind.

People seem to either love them or hate them, with little room in between.

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FINANCIAL planning

In more recent years, life insurance

in retirement planning is getting increasingly more attention from financial advisors. While some financial advisors have praised the ingenuity of using life insurance in this unique way, others have called those who use this strategy irresponsible, overly aggressive or sometimes much worse.

Now I know what you are thinking. Life insurance plans have been around forever, and the idea of using them for retirement funding is not exactly new. I had a conversation with a prospective client recently who has been using life insurance as part of his retirement planning since the early 1990s. However, given the recent shift to more defined contribution plans and the attention given in the media and major publications to shortfalls in retirement savings, more people are turning to financial advisors for creative solutions on how to plan for retirement. Hence the rise of life insurance.

The strategy usually goes something like this. The client buys a permanent life insurance policy — normally universal life or variable universal life. The policy is funded (that is, overfunded) by amounts over and above the premium amount. The policy builds up cash value very quickly and becomes self-sustaining after only a small number of payments. Once the cash value is high enough, distributions may be taken from the policy. Loans may be taken as tax-free distributions that never have to be paid back.

Withdrawals from life insurance policies may also generally be taken tax-free to the extent of basis. Even partial surrenders may be taken as a tax-free distribution, as long as basis is not exceeded.1 Regardless of the method used, the client takes cash out of the policy. This cash flow is in addition to any cash that may be available through traditional means, like 401(k) or individual retirement account (IRA) distributions. The accumulated value of the policy does decrease with each distribution, but utilizing this strategy, the client has achieved the goal of supplementing his or her retirement income using a life insurance policy. The client has also incurred little or no tax liability in the process. All in all, not a bad result!

So why would someone look to use life insurance in retirement planning? Flexibility. While traditional retirement vehicles such as the

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401(k), Simplified Employee Pension (SEP) and IRA all have annual contribution limits imposed by the U.S. Internal Revenue Service (IRS), life insurance plans typically have no limits. The only real limitations a person faces are the underwriting criteria of the insurance company.

Used correctly, life insurance provides a way to supplement retirement income beyond what may be provided by typical retirement accounts.

For high-net worth individuals who may truly need a much higher level of retirement cash flow, life insurance can provide a way to meet retirement goals in a tax efficient way at low funding levels.

However, those who oppose the use of life insurance in retirement plans will be quick to point out that this result is the ideal state and largely ignores the many risks inherent in the strategy. First, the appealing tax benefits are contingent on the policy being considered a true life insurance contract by the IRS. If the policy is classified as a modified endowment contract (MEC), the tax benefits disappear. The withdrawals are generally taxable in full, as the tax law assumes that the distribution is “income first” — a far different result. It should also be noted that if a policy is classified as a MEC, it never can go back to being a life insurance policy.

A second issue to consider is the inherent risk of lapse. A policy can lapse if the loan amounts are high enough. In the case of variable universal life policies, in which policy value is linked with the market, this risk increases in the case of a sudden crash in the market.

Finally, fees may come into play. Depending on the policy design, fees on universal life and variable universal life insurance policies can be substantially higher than if a client were to simply invest in the open market. This result is certainly avoidable, but it requires the client to evaluate all possible options — not just life insurance products.

While these risks are substantial and should not be ignored, the flexibility provided by these policies should not be immediately written off either. Just like any other risky financial product, life insurance can have a place in retirement planning under the right circumstances for the right client. If a client has maxed out all other retirement vehicles, still needs retirement income and can tolerate the inherent riskiness of the strategy (both mentally and financially), then life insurance may have a place in his/her retirement plan. u

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FINANCIAL planning

O

However, as financial advisors, we should always remember that life insurance is not primarily a retirement vehicle, and that the situation described above is rare. As a recent U.S. News & World Report article suggests, we should always evaluate the use of life insurance against all other retirement planning alternatives.2 For example, a client making $70,000 per year who has not yet maxed out on their 401(k) may do better contributing more to the 401(k) before considering life insurance as a retirement planning vehicle.

1. Copeland, C., & Littell, D.A. “The Top 4 Benefits of Using Life Insurance in Retirement Planning.” Annuity Outlook Magazine. Nov. 1, 2013. tinyurl.com/hfs8k6n.

2. Wohlner, R. “Is Life Insurance a Retirement Investment?” U.S. News & World Report. June 12, 2013. tinyurl.com/k6cpr7y.

The key for financial advisors remains evaluating each client situation individually within its own unique context, so that the client does not take on more risk than necessary.

In this way, knowing when to apply a life insurance strategy to retirement planning is just as important as knowing when not to apply it. n

David Peters, CPA, is the strategic relationship manager and financial advisor for Carroll Financial Inc., in Charlotte, N.C. He is also an adjunct professor in accounting, insurance and ethics, a doctoral student in financial planning and sits on the Disclosures Editorial Task Force. dpeters@carrollfinancial.com connect.vscpa.com/DavidPeters www.carrollfinancial.com

The information discussed herein is general in nature and provided for informational purposes only. There is no guarantee as to its accuracy or completeness.

Nothing in this article constitutes an offer to sell or a solicitation of any offer to buy any type of securities.

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VSCPA chapters

Continuing the Chapter

By Barbara Sukramani, CPA

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In the January/February 2016 issue of Disclosures, we provided basic information on each VSCPA chapter. Here is a more in-depth look at several chapters.

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VSCPA chapters

VSCPA members have a number of common characteristics and needs, whether they live and work in Abingdon or Arlington.

However, there are regional differences in industry, economic climate and demographics.

Around the state, VSCPA members have several opportunities to become involved in their profession at a local level through VSCPA chapters.

Every chapter, even the largest and most active, has openings for involvement beyond attendance. Those opportunities are open to members of every level of experience, skill and career stage, from administrative tasks

such as taking reservations or posting notices to the website to professional development opportunities such as speaking at chapter events.

Chapters want input from local CPAs about the types of events and topics of greatest interest to potential members; even feedback about the event location and format. This input helps shape each chapter’s planning, so that the chapter can better serve its members, and generates enthusiasm and participation in events.

Networking with local CPAs and prospective CPAs though chapter participation strengthens the individual VSCPA member and the accounting profession. Chapter involvement is one of the easiest ways to start professional and community involvement early in one’s career.

Below are details about several different VSCPA chapters, showcasing how each chapter has different schedules, styles and characteristics.

Thomas Jefferson As its name might suggest, the Thomas Jefferson Chapter serves CPAs in the cities and counties surrounding Charlottesville. It holds regular monthly breakfast meetings featuring a speaker, providing a forum for members and guests to exchange information and advice and hear updates about current topics. The 2015 meeting calendar and CPE topics included a small firm summit, trust and estate issues, soft skills development and cybersecurity.

All VSCPA members are welcome. Event fees are pay-as-you-go, with a discount for chapter members, so members’ discounts will soon recoup the annual membership dues, and nonmembers or guests who are interested in a particular topic can attend if they are not ready for full membership. Attendance at monthly events generally ranges from 25 to 30 people, and the most frequent u

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VSCPA chapters

Richmond Chapter awards annual scholarships The VSCPA’s Richmond Chapter held its annual Past Presidents and Scholarship Dinner on Nov. 17, 2015, recognizing the chapter’s past presidents and the recipients of its scholarships.

The chapter’s scholarship winners were: >> MEREDITH DeLUCA, University of Richmond >> TRACY MORICONI, Randolph-Macon College >> ANTHONY RANDOLPH, Virginia Union University >> CAMERYN SMITH, Virginia State University >> ELLIOTT TAYLOR, Virginia Commonwealth University In addition, TIMOTHY RADER of James River High School in Midlothian was honored with the chapter’s High School Accounting Excellence Award. Congratulations to all the winners! n

participation has been from members in industry, nonprofits and small CPA firms.

Thomas Jefferson Chapter President Charron Montgomery, CPA, said the chapter had additional accomplishments in 2015, such as a professional happy hour in September to provide an opportunity for CPAs, attorneys, bankers, insurance and other financial services professionals to network. The chapter also updated its website with interactive features and implemented e-commerce tools.

The chapter can also now maintain and track finances and enable members and guests to use swipe cards for event fees with a webbased e-commerce application.

Richmond Richmond Chapter President Donna Yenney, CPA, an active chapter member for the past eight to nine years, described the chapter’s efforts to plan the year’s calendar and provide a selection of activities, speakers, and topics of interest to participants, who are generally evenly distributed between CPAs working in industry and public accounting. Attendees can take advantage of CPE offered during several meetings and conferences scheduled throughout the year. The chapter looks for member feedback and recommendations for timely, relevant speakers and topics, and has offered earlier notification of the events calendar and increased networking events in response to member suggestions.

Recent events include a networking event in September with the Risk Management Association and a Richmond CPAs Night Out in October, where CPAs could connect with other professionals such as financial planners and bankers for networking and referrals.

In fact, the chapter holds several Night Out events during the year to provide these opportunities.

The Richmond Chapter reaches out to collegiate accounting programs and supports students, including area high school students who have taken a high school accounting course and who plan to enroll in college to study accounting. The last scheduled event of the calendar year is a dinner held in

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November, honoring past chapter leaders and recognizing scholarship recipients drawn from a Richmond area high school, Virginia Commonwealth University, Virginia Union University, Virginia State University, Randolph-Macon College and the University of Richmond. See sidebar for the 2015 scholarship recipients.

Roanoke Roanoke Chapter President Keith Gray, CPA, recapped the chapter’s events and provided a profile of member demographics. With a focus on local continuing education opportunities, the Roanoke Chapter sees a lot of active participation from CPAs in small to mid-size businesses, whether in industry or public practice. Those participating enjoy the benefit of face-to-face interaction with colleagues at a moderate price. Gray also outlined some of the ideas under consideration for future chapter events, such as organizing a community outreach and service event.

Regular general meetings are conducted over lunch in downtown Roanoke, where members can network, socialize, eat, earn CPE and get back to work. Lunch meetings are held approximately monthly from April through December. Special events held each year include a Student Outreach Night and annual conference.

The chapter invited students from area colleges including Virginia Tech, Radford University, Ferrum College and Roanoke College to Student Night in mid-September, which was well-attended despite difficulties with area flooding at the time. The chapter recognized student achievement by awarding scholarships, and students interested in the accounting field were able to learn more about potential career paths from a panel of speakers including an industry CFO, a government auditor and a CPA in public accounting.

The annual two day CPE conference was held in October at Roanoke Country Club, and the 2015 attendance was more than 30 percent higher than in the prior year. Some of the unique advantages of staging the conference in this setting were holding the morning

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VSCPA chapters session fireside in the ballroom and having a golf putting contest during the lunch break.

Participants could enjoy the ambience and scenery, and get a little fresh air and exercise during a day of education.

Blue Ridge VSCPA members in the Harrisonburg area will find that the Blue Ridge chapter has teamed with the Virginia Skyline Chapter of the Institute of Management Accountants to co-sponsor meetings and continuing education, said Tom Rosengarth, CPA, and Debbie Galway, CPA, two of the leaders and organizers. Therefore, it isn’t surprising that a significant portion of the participants are CPAs in industry.

Officers and committee members meet over the summer to develop agenda for events held between September and the following June.

The organizations collaborate to hold a halfday CPE event in December and a full-day CPE event in May on germane topics such as tax updates and professional ethics.

Funds raised from these seminars are used to award scholarships to accounting students from area colleges and universities Bridgewater College, Eastern Mennonite University and James Madison University.

Scholarship applications were due in November, and the newest group of scholarship recipients are recognized at the February Student Night event.

In other months, the chapter holds lunch meetings in Harrisonburg. Attendees can mingle with colleagues, hear a briefing on current business subjects, and earn an hour of CPE at these lunches. The meeting planned for April 2016 will be a change of pace, because it will be held in late afternoon at a vineyard, giving participants an up-close look at the area wine industry.

Northern Around the Washington, D.C., area, there are a number professional associations competing for a CPA’s participation, and a significant amount of travel time can be involved. The

Northern Chapter leadership strives to meet the needs of members in its geographic area by defining the prospective audience and offering programs that are relevant and welltimed. Hundreds of members are active on the chapter’s website, and many are seeking continuing education, business development opportunities and some fun in a cost-effective and time-conscious manner.

Many meetings are two-hour sessions with a meal and a speaker. Members have an opportunity to make new professional acquaintances and check in with established ones and gain insight, as well as CPE credit, from the scheduled presentations. The chapter also helps area CPAs connect with local opportunities for CPA Day of Service.

President-elect Carolanne Petrusiak, CPA, described its Special Interest Groups, which are a unique feature of the Northern Chapter.

The groups help members interact with other CPAs who have similar interests and concerns.

The established groups are Accounting Trends & Technology, Taxation, International Tax & Business, Forensic and Valuation Services, CFO and Controllers, Government Contracting, Emerging Young Professionals, Personal Financial Planning & Estate Planning, Not-for-Profit and Management of an Accounting Practice. These groups may gather for social events or design meetings around topics of specific interest to members.

For example, the CFO and Controllers group, chaired by Bill Gombar, CPA, invited speakers to monthly breakfast meetings held during August and September on the subjects of area labor and compensation trends, and fiduciary responsibilities for employee benefit plans.

According to Tidewater Chapter President Brian Deibler, CPA, the chapter had more than 700 members in 2015, of which about two-thirds describe themselves as CPAs in public accounting, one-quarter in private industry and the balance in education and nonprofit organizations. The chapter offered as many as 31 hours of continuing education credit during the May to April fiscal year.

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CPAs in the Tidewater area also like to have fun, network and serve their community, and the chapter plans some of these occasions, too, such organizing a Young CPA outing in March and a trip to a Norfolk Tides minor-league baseball game in July. Service opportunities include working on financial literacy events with area Girl Scouts in April and joining with fellow CPAs at the two regional food banks during the CPA Day of Service in September.

Students from university accounting programs in the area may join the chapter at no charge and participate in any of the scheduled events.

The annual Student Night event is held in February, featuring roundtable discussions of career paths and recognizing scholarship recipients. Also scheduled for February is an economic forecast briefing presented by Old Dominion University. n

barbara sukramani, cpa, is an assurance manager at PBMares, LLP, in Williamsburg, where she is co-leader of the firm’s professional & technical services niche.

She is a member of the Disclosures Editorial Task Force.

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These conferences included annual Non-Profit Day, Accounting & Auditing Day, Specialized Knowledge Day and Tax Day held in Norfolk or Chesapeake, as well as several Ethics course sessions offered both on the Peninsula and Southside for participant’s convenience. All CPE events are included in member dues and are very popular, so registration is a must and often fills up early. Nonmembers may also attend any of these events on a pay-as-yougo basis, but the cost of membership can be recovered in as little as two events.

BSukramani@pbmares.com connect.vscpa.com/BarbaraSukramani

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Do You Value Your CPA License?

The Virginia Society for CPAs (VSCPA) advocates on behalf of all Virginia CPAs because we value you and the esteem the CPA license holds.

We want to ensure your interests stay protected by making sure legislators listen to your needs. We can only do this with your support of the VSCPA Political Action Committee (PAC).

Contributions made to the VSCPA PAC financially assist candidates and legislators who actively support CPA business issues. Strong advocacy efforts, in concert with PAC contributions, help keep your interests represented and your voice heard.

Help make the CPA profession thrive! Contribute today at vscpa.com/PAC or (800) 733-8272.

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VSCPA news

CPA Assembly Day 2016: Building relationships 1

VSCPA member Henry Davis III, CPA, met with one of his legislators, Del. Chris Peace (R-Mechanicsville) at CPA Assembly Day on Jan. 19. To watch, visit this page in digital Disclosures at disclosures.vscpa.com.

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On Jan. 19, a record 56 VSCPA

members and staffers braved the cold and wind of downtown Richmond to visit the Virginia General Assembly for CPA Assembly Day. Those members took on the task of lobbying members of the Virginia General Assembly, which is now CPA-free for the first time in 33 years with the retirement of former Sen. Walter Stosch, CPA. “Now that Walter’s not here, it gives us even more reason to be visible, be engaged and speak with our representatives,” said VSCPA Political Action Committee (VSCPA PAC) Board of Trustees Chair Elsie Rose, CPA, of Union Bank & Trust in Richmond. The VSCPA focused on two main issues at Assembly Day:

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>> The annual issue of tax conformity with the U.S. Internal Revenue Code (IRC), advancing the date of conformity to Dec. 31, 2015, and making conformity with the federal earned income tax credit permanent. >> The funding of the Community Tax Law Project (CTLP), a nonprofit organization that provides free legal representation to low-income Virginia taxpayers in tax disputes. CTLP funding is a line item in the biannual budget bill.

In addition to the members who participated in person, others sent emails through the VSCPA’s Take Action tool.

“No one knows the business sector better than CPAs, and they have an opportunity to share that knowledge with us,” said House of Delegates Speaker William Howell (R-Fredericksburg).

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The VSCPA delegation to the Virginia General Assembly poses in downtown Richmond.

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Roy Peters, CPA, (left) meets with Del. Michael Webert (R-Marshall).

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Left to right, Christine Abbott, CPA, Del. Brenda Pogge (R-Williamsburg), Ira Warren and Cary Kelly after their meeting.

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VSCPA news

VSCPA honors Stosch with celebration The VSCPA hosted the event with Dixon Hughes Goodman — whose partner, Gary Thomson, CPA, served as master of ceremonies — and the VSCPA past presidents and chairs. Fellow VSCPA members Greg Lawson, CPA, and Larry Samuel, CPA, recognized Stosch’s service, while Elsie Rose, CPA, and Ellis Dunkum, CPA, gave special presentations. Following those speeches, VSCPA President & CEO Stephanie Peters, CAE, and Board of Directors Chair Lisa Germano, CPA, spoke and presented Stosch with a copy of the VSCPA resolution in his honor.

“Thank you for your excellent example of being a CPA, being a servant and doing things the right way,” Thomson said in his introduction.

VSCPA President & CEO Stephanie Peters, CAE (left) and VSCPA Chair Lisa Germano, CPA, with Stosch at the reception.

The VSCPA recognized one of its most

decorated members, former Virginia Sen. Walter Stosch, CPA, with a dinner reception at the historic Jefferson Hotel in Richmond on Jan. 18, with 147 VSCPA members, staff and guests in attendance.

Stosch spoke after that introduction and reflected on his career. He retired at the end of 2015 after spending 33 years in the Virginia House of Delegates and Senate. He was the first Republican Senate majority leader in Virginia history and served as chair of the Senate Finance Committee. Before that, he was a partner at Glen Allen firm Gary, Stosch & Walls and served as partner at Deloitte after the firms merged.

He joined the U.S. Army after graduating from Warsaw High School on the Northern Neck, then graduated from the University of Richmond after being discharged.

“It’s been a good ride for me, and most of you in this room were instrumental in that ride,” Stosch said.

See page 32 for more pictures from the event.

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Celebrate Virginia Financial Literacy Month April is Virginia Financial Literacy Month as proclaimed by Virginia Gov. Terry McAuliffe. The award-winning Financial Fitness initiative is just one of the ways the VSCPA helps Virginia taxpayers get themselves on solid financial footing. Here are Financial Literacy Month highlights: >> ASK A CPA EMAIL PROGRAM: Virginia CPAs will answer questions from the public via emails submitted at FinancialFitness. org. Free advice is available from experts on financial planning, tax planning, military taxes and disaster recovery. >> FINANCIAL FITNESS WORKSHOP: The VSCPA will lead a Financial Literacy Workshop at The Collegiate School in Richmond for high school seniors on managing cash flow, budgeting and keeping good credit while in college. >> Junior Achievement Partnership: The VSCPA is partnering with Junior Achievement across the state to allow

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members of the VSCPA to volunteer as individuals, firms or local chapters to provide financial literacy education with students in their local communities. Volunteers will be able to give their time at JA’s Finance Park in Richmond and Fairfax as well as present lessons on savings, budgeting and debt and credit to student groups in Hampton Roads and Southwest Virginia. >> Nonprofit Finance Summit: The free all-day Nonprofit Finance Summit for Hampton Roads nonprofits will take place at Tidewater Community College on April 25. It includes a comprehensive seminar on the basics of nonprofit finance as well as in-depth breakout sessions focused on specific topics such as financial reporting, cash management, IRS concerns and more.

To volunteer for the Ask a CPA Email Program or Junior Achievement partnership, contact VSCPA Public Relations & Communications Director David Bass at dbass@vscpa.com or (804) 612-9440. n

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Where should you take CPE? The VSCPA has received

large numbers of questions about CPE mobility, particularly from CPE takers in the Northern Virginia area. As part of our effort to get you the best, most cost-effective CPE possible, we want to make sure all members are aware of the following information as it relates to CPE requirements.

The Virginia Board of Accountancy (VBOA) has an established practice of CPE reciprocity for dual and multi-state licensees, based on the following guidelines: >> If the licensee’s principal place of business is in Virginia, he or she must comply with Virginia’s CPE requirements. >> If the licensee’s principal place of business is in a substantially equivalent jurisdiction and the licensee holds a license from a substantially equivalent jurisdiction, he or she may claim a “Home State Exemption” through the CPE Tracking System for Virginia CPE compliance. The licensee must have an active CPA license in good standing in his or her place of business to qualify for this exemption.

The Virginia-specific ethics requirement is governed by a similar rule (emphasis ours): If the person also holds the license of another state and Virginia is not the principal place of business in which he provides services to the public using the CPA title, the ethics course taken to comply with this subsection either shall conform with the requirements prescribed by the board or shall be an ethics course acceptable to the board of accountancy of another state in which the person holds a license.

For more information on Virginia’s CPE requirements as they relate to members with multiple licenses, please visit tinyurl.com/VBOACPE or vscpa.com/CPEFAQ. n

The results are in on VSCPA communications The results of the VSCPA’s 2015 Communications Survey are out. Each year, we survey members to get a read on how we’re doing in communicating the information you need to help your practice. The goal is Goldilocks communications — not too much, not too little, just right. Visit vscpa.com/ 2015CommsSurvey for a summary of the results. n

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THe VSCPA’S NEWest CPAs Nick Allen Raymond An Mayra Brant Josh Byrum Tori Carner Kaitlin Clifford Jordan Cohl Tim Colna Tim Davenport Samantha Doe Cassie Dominicis Christina Duong Kern Gardiner Sarah Godfrey Kim Grantham Rachel Hershey Liz Hicks Amber Huang Isaac Johnson Charmine Khilji Han Ah Kim Dan Leifer Yi Li Bret Luhman Mackenzie Marr Kyle Matusek Lisa Norfrey Jason Orvin Brian Pendleton Nick Preusch Josh Reifel John Scaglione Alisha Sterdivant Adrianne Taylor Tyler Treuting Mica Vo Megan Wears Sarah Zillioux List from December and January.

Compiled Jan. 29, 2016. n

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VSCPA news

Congratulations to the following members!

MEGAN FURLONG, CPA, a manager at Yount, Hyde & Barbour in Culpeper, was named Young Professional of the Year by the Culpeper Chamber of Commerce.

promotions >> JORDAN COHL, CPA, has been promoted to senior accountant at Kositzka, Wick & Co. in Alexandria.

Ralph Damone, CPA, and Will Harland, CPA.

NEW HIRES >> RODNEY BOLYARD, CPA, has joined Moss & Riggs as tax and accounting manager in the firm’s Williamsburg office.

JEFFREY CLAYMAN, CPA, has joined Kositzka, Wicks & Co. in Alexandria as a tax manager.

YUTING HAN has joined Christopher Enright, CPA, in Henrico as a staff accountant.

SUSAN HILL, CPA, and KELLY WEST, CPA, have joined Rumble & Associates in Chester.

ZALENA KHAN, CPA, has joined NeoSystems Corp. in Tysons Corner as director of NetSuite consulting.

CATHY LILES, CPA, has joined American National Bank and Trust as senior vice president and chief accounting officer.

LORI ROOD, CPA, has joined Updegrove, Combs & McDaniel as a senior tax accountant in the firm’s Leesburg office.

appointments & awards >> PAT DROLET, CPA, executive vice president at CBM’s Washington office, was named a 2015 Woman to Watch in the Experienced Leader category by the Greater Washington Society of CPAs.

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RALPH DAMONE, CPA, has been promoted to principal at Matthews, Carter & Boyce in Fairfax.

PBMares has named three new partners: DAN CHENOWETH, CPA, in the Newport News office; JENNIFER FRENCH, CPA, in the Williamsburg office; and TODD SWISHER, CPA, in the Richmond office.

WILL HARLAND, CPA, has been promoted to shareholder at William B. May, Jr., CPA, in Henrico.

KATE OLIVER, CPA, was named general manager of the Rappahannock Record in Kilmarnock.

JENNIFER STEELE, CPA, was named assistant vice president at TowneBank in Suffolk.

firm news >> Gaithersburg, Md., firm DeLEON & STANG came in at No. 52 in the small firms category on Accounting Today’s “Best Accounting Firms to Work for” list.

The following firms were named Best Places to Work for 2016 in the small employers category (up to 99 U.S. employees) by the Best Companies Group and Virginia Business magazine: VERIS CONSULTING, Reston BURDETTE SMITH & BISH, Fairfax WELLSCOLEMAN, Richmond

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KOSITZKA, WICKS & CO., Alexandria CST GROUP, CPAs, Reston WALL, EINHORN & CHERNITZER, Norfolk RENNER & CO., Alexandria

mergers & acquisitions >> BROWN EDWARDS & CO. has added DENT K. BURK ASSOCIATES in Kingsport, Tenn., and HODGES, JONES & MABRY in Wytheville.

DIXON HUGHES GOODMAN has added Baltimore firm STEGMAN & CO., the oldest Maryland-based CPA firm. n

WE WANT to HEAR from you!

Email disclosures@vscpa.com if you have exciting news to share.

The VSCPA prints news of members’ awards, appointments and promotions as well as new hire and job change announcements.

Firm news, such as mergers and acquisitions and community service activities, is also welcome.

Feel free to send headshots, but please make sure they are highquality, 300 dpi JPG files.

Due to space constraints, we cannot print degrees or designations awarded to members. n

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VSCPA news

Remembering Steve Holton the Financial Accounting Standards Board (FASB). While on the VBOA, he spearheaded comprehensive revisions of Virginia’s accountancy statutes and the VBOA statutes, a six-year project that changed both from rules-based to principles-based. Last year, the AICPA honored him with its Sustained Contribution Award, given to members who have significantly contributed to the AICPA and the profession through volunteer service.

Steve Holton, CPA, a

VSCPA life member from Richmond, died on Jan. 22, 2016. A partner at Martin, Dolan & Holton in Glen Allen, he made a major impact on the profession, serving as chair of the Virginia Board of Accountancy (VBOA) and on numerous task forces for the VSCPA, the American Institute of CPAs (AICPA) and

At the VSCPA, he served on the Accounting & Auditing Advisory Committee, the Legislative Affairs Committee and numerous CPE and conference planning committees.

He graduated from the College of William & Mary and authored numerous books on accounting for small and midsized entities. In the past 10 years, Holton also wrote several articles on licensing issues for Disclosures magazine. n

We mourn the loss of...

GEORGE GRUBER, CPA, a VSCPA life member from Midlothian. A graduate of the University of Richmond, he rose to partner at Andrews, Burkett & Co. and Ernst & Young. He served on the board of trustees for Centenary United Methodist Church in Richmond and as president of the McGuire University School Alumni Association.

He served on the VSCPA Membership Committee in the 1960s. n

$50,000 in VSCPA scholarships

staff news

College is an expensive investment in a student’s future, and the VSCPA Educational Foundation has several scholarships available that range from $1,000 to $5,000.

If you know a student who demonstrates academic excellence or financial need, encourage them to apply! All applicants must be members of the VSCPA and scholarship applications must be submitted by April 1, 2016 at vscpa.com/scholarshipinfo. n

Emily Walker, CAE, Talley King, Catherine Meehan, Richard Gordon

Vice President of Advocacy EMILY WALKER, CAE, celebrates her 13th anniversary with the VSCPA on April 1.

find the cpe test online

Two employees celebrate five years with the VSCPA in March: Education Marketing Manager TALLEY KING on March 9 and Accounting Coordinator CATHERINE MEEHAN on March 14.

Visit vscpa.com/CPE. Choose “On Demand” from the side filters to find the exam and others from previous Disclosures issues. n

Education Manager RICHARD GORDON marks four years with the VSCPA on March 12. n

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VSCPA news

2016 Leaders’ Institute application deadline

VSCPA Annual Meeting and Board of Directors The VSCPA’s Annual Meeting will be held Wednesday, May 25, 2016, at 11:50 a.m. at the Williamsburg Lodge.

During the meeting, the Nominations Committee will present the following nominated members for election as 2016–2017 officers and directors: Chair Jim Phillips, CPA Chair-Elect Staci Henshaw, CPA Vice Chairs Richard Groover, CPA Victoria Jones, CPA Gary Thomson, CPA Mike Wagner, CPA

At-Large Directors Tara Adams, CPA Henry Davis III, CPA Jaime Lynn Dernar, CPA Jennifer Eversole, CPA Ali Gunbeyi, CPA Anne Hagen, CPA Bill Hardy, CPA Krystal McCants, CPA Jill Mitchell Niki White, CPA

College educators: The VSCPA is seeking applicants for its 2016 Leaders’ Institute, set for June 17–18 at the University of Richmond.

Encourage your students to apply at vscpa.com/LeadersInstitute!

Now celebrating its 10th year, the Leaders’ Institute is a two-day, allexpenses-paid program developed by the VSCPA and founding sponsor Baker Tilly that seeks to develop future leaders in the CPA profession.

Students will gain access to potential employers, possible mentors and networking opportunities.

Applications are due April 22, 2016, and attendees must be members of the VSCPA to apply. Visit vscpa.com/LeadersInstitute.

SPONSORSHIPS ARE AVAILABLE! Get your name out to the profession's best and brightest upcoming talent. For more info, contact VSCPA Career & Leadership Development Director Molly Wash at mwash@vscpa.com or (804) 612-9417. n

“I am honored to be the recipient of this scholarship. The award will allow me to continue working towards my career goals. After graduation, I plan to obtain my CPA license and complete my MBA. Thank you for your generosity.”

- Katelyn Gough, VSCPA Minority Scholarship Recipient

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VSCPA news

VSCPA 100% Member Firms VSCPA 100% Member Firms

show their commitment to their employees, the profession and the association. A 100% Member Firm is simply a Virginia CPA firm or company that has all of its CPAs enrolled as members in the VSCPA.

Interested in being listed as a 100% Member Firm? Contact VSCPA Member Relations Director Brenda Fogg at bfogg@vscpa.com or (804) 612-9409.

A.F. Thomas & Associates, PC Anderson & Anderson CPAs, PC Anderson & Reed, LLP Anderson, White & Company, PC, CPAs Andrews, Barwick & Lee, PC Barnes, Brock, Cornwell & Painter PLC Beale & Curran, PC Beck & Company, CPAs, PC Bennett, Atkinson & Associates, PC Biegler & Associates, PC Black Marlin CPA (Ann Black CPA PLC) Bowling, Franklin, & Co., LLP Boyce, Spady & Moore PLC Britt & Peak, PC, CPAs Bruce, Renner & Company, PLC Bullock & Associates, PC Burdette Smith & Bish LLC Burgess & Co., PC, CPAs Cameron, Moberly & Hamrick, PC Charles H. McCoy Jr., Inc. Charles W. Snader, PC Chesapeake Accounting Group PC Christopher A. Enright, CPA, PLC Cole & Associates CPAs, LLC Coley, Eubank & Company, PC Corbin & Company, PC Craver, Green and Company, PLC Creedle, Jones and Alga, PC CST Group, CPAs, PC Dalal & Company David L. Zimmer CPA PC Diane Y. Smith CPA PC Didawick & Company, PC Donald R. Pinkleton, CPA Donald W. Coleman, CPA, Inc., PC

Douglas L. Thompson, CPA PLLC Duvall Wheeler, LLP Eggleston & Eggleston, PC Elmore, Hupp & Company, PLC Everett O. Winn, CPA, PLC First Capital Bank Fritz & Company, PC G4 CPA Firm, Inc. Garland & Garland, CPAs, PC Garris and Company, PC G.L. Roberson CPA, PLLC Graham and Poirot, CPAs, LLC Gregg & Bailey, PC Gregory & Associates, PLLC Gurman & Company, PLLC Hantzmon Wiebel Harris, Hardy, & Johnstone, PC Harris, Harvey, Neal & Co., LLP Henley & Henley, PC Hogan & Reed, PC, CPAs Holland & Brown LLP Homes, Lowry, Horn & Johnson, Ltd. Honeycutt & McGuire CPAs Hortenstine and McCown, CPAs, PC Hottel & Willis, PC Hughes & Basye, PC Hunt & Calderone, PC, CPAs J. Goddin & Associates, PC Jay E. Reiner CPA PLLC John M. Watkins, CPA Johnson, Equi & Co., PLC Jones, Adams & Delp, PC Jones & Company CPA, LLC Jones CPA Group, PC Jones, Madden & Council, PLC Jones & McIntyre, PLLC JS Morlu, LLC Katherine L. Foley CPA, PC Keiter

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Kositzka, Wicks & Company Kris McMackin CPA L.P. Martin & Company, PC Lane & Associates, PC Larry D. Greene CPA PC Lauren V. Wolcott, CPA, PC Lent & Hawthorne, PC M. Lee Winder & Associates, PC Maida Development Company Mallard & Mallard CPAs, LLC Malvin, Riggins & Company, PC Martin, Beachy & Arehart, PLLC McPhillips Roberts & Deans PLC Meadows Urquhart Acree & Cook, LLP Michael B. Cooke, CPA, PC Michael R. Anliker, CPA, PC Mitchell, Wiggins & Company, LLP Moss & Riggs, PLLC MJW LTD, PC Mulkey & Co., PC Nicholas, Jones & Co., PLC PBMares, LLP Pearson&Co., PC R.P. Willis, PC R.T. McCalpin & Associates Renner & Company, CPAs, PC Ritchie, Withers & Masincup PC Robb Scott Bradshaw & Rawls, PC Robinson Consulting Group Roger L. Handy, PC Rubin, Koehmstedt & Nadler, PLC Rumble & Associates, Inc. Russell, Evans & Thompson, PLLC Rutherford & Johnson, PC Salter & Associates, PC Saunders, Matthews & Pfitzner, PLLC

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Saunders & Saunders, PC Scheulen, Patchett & Edwards, PC Sells Hogg & Associates CPAs, PC Sherman, Spero & Safarino, Ltd. Spencer, Hager & Mosdell, PC Spitler, Stephens & Associates PLLC Stephen Merritt CPA, PC Stephen F. Perry, PC Stephen T. Shickel, CPA, PLC Steve Guy & Associates, PC Steve Walls & Associates, PLLC Stokes Office Solutions LLC Sullivan, Andrews & Taylor PC Terry L. Jones, CPA, LLC The Cahill Group, LLC The Davidson Group, PC The Foley Group, Ltd. Thomas E. Fraley, CPA Thompson Greenspon T.L. Pyne, PC Tongelidis Consulting, LLC Updegrove, Combs & McDaniel, PLC Valderas Financial Solutions LLC Verus Financial Partners Wall, Einhorn & Chernitzer W.D. Sanders & Company, PC Wells Coleman Wilkinson Consulting & CPA PLC William B. May Jr., CPA, PC Wineholt & Associates, PC Yancey, Miller & Bowman, CPAs PLLC Yount, Hyde & Barbour, PC Compiled Feb. 1, 2015.

Check vscpa.com/100Percent for a complete list. n

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5 >> Who’s Who

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1. George Riegel, CPA, Sen. Walter Stosch, CPA, Scott Huzek, CPA, Mike Gracik, CPA, and Barclay Bradshaw, CPA, at the VSCPA’s retirement celebration for Stosch on Jan. 18.

2.

Jill Mitchell, Dawn Jessee, CPA, Niki White, CPA, and David Ives, CPA, stand during the VSCPA recognition from the House of Delegates floor during CPA Assembly Day on Jan. 19.

3. Marshall Northington, CPA, and Roy Peters, CPA, at the Stosch retirement celebration.

4.

Chuck Pearson, CPA, at the VSCPA’s Management of an Accounting Practice event on Jan. 14.

5. Melanie Randall, CPA, and Trinette Riddick, CPA, at the VSCPA’s CFO & Controller Breakfast on Feb. 3. n

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VSCPA news CLASSIFIEDS

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Classified ads are a great way to reach VSCPA members — 94 percent rate the information in Disclosures as excellent or good. What are you waiting for?

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Contact us at classifieds@vscpa.com or visitvscpa.com/Classifieds for rate information. Members receive a discount.

Help Launch an Accounting Student’s Career!

By donating to the Educational Foundation you help accounting students pay for college and reach their academic and career goals.

Donate today at VSCPA.com/DonateFoundation

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I AM the vscpa comedian at heart >>

Two minutes with Jay Reiner, CPA Jay Reiner, CPA, is a sole proprietor in Arlington. He is a graduate of the City University of New York, Queens College, and has been in public accounting for more than 30 years. When not helping clients or networking, he likes to travel and speak Spanish every chance he gets.

I AM PASSIONATE ABOUT... Food, fitness and my wife. We are food enthusiasts who love cooking delicious meals for friends and ourselves, and we could talk about food for hours. Given that passion, the only way to keep as trim as I am is to hit the gym, particularly during tax season. And my wife is my food buddy, travel buddy and best buddy on our life journey. Besides loving her, I really like her!

PEOPLE DON’T KNOW THIS BUT… I was a lifeguard at a swimming pool for a few summers, and I actually saved somebody’s life.

IF I WEREN’T AN ACCOUNTANT, I WOULD BE… A standup comedian. The people who know me know how much of a goofball I am, so if I could make a few bucks doing it (or get my own TV show about nothing), why not? If I couldn’t make a go of that, I would be a scuba instructor. I’ve got my Open Water Scuba Instructor certification and have taught people to dive. I love the underwater environment, and if I could dive every day, I’d be one happy guy!

MY ADVICE TO FELLOW CPAs IS… To quote that old deodorant commercial, “Never let ‘em see you sweat.” I can’t tell you how many times over the years I’ve had clients in my office at the height of tax season, and they’ve remarked about how calm I am. I want my clients to feel confident that I’ve got their best interests in mind, and that everything is under control. That’s our job as CPAs. Never appear weak.

I NEVER LEAVE HOME WITHOUT… Two things. One, my smartphone. For better or worse, my life is contained in that darn thing!

Two, reading glasses, so I can actually read all the emails and calendar entries on that phone.

I WISH CPAs KNEW… How to make one plus one equal three.

Imagine how much more valuable we’d be to our clients!

I’M A CPA BECAUSE… It’s way cooler than being an attorney, actuary or enrolled agent. n

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PoeGroupAdvisors.com • 1-888-246-0974 • info@poegroupadvisors.com DISCLOSURES • MARCH/APRIL 2016 • HTTP://DISCLOSURES.VSCPA.COM

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