Disclosures: January/February 2020

THE OFFICIAL MAGAZINE OF THE VIRGINIA SOCIETY OF CPAs

JANUARY/FEBRUARY 2020

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4 generations, 1 workforce

+

Early recruiting techniques Another opinion on America’s worth

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CONTENTS

Features 16

20 24

FIND US...

Columns

4 generations, 1 workforce

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Innovation How to implement innovation

Move past generational differences to create a cohesive office.

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Young Professionals Time’s up, phones down

Entice them early America’s Worth: An opinion

WEBSITE vscpa.com CONNECT connect.vscpa.com TWITTER @VSCPANews

Departments

LINKEDIN tinyurl.com/ LinkedInVSCPA

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From the CEO

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Line Items

FACEBOOK facebook.com/VSCPA

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Tech Talk

10

Advocacy

29

VSCPA News

33

Classifieds

34

Spotlight

INSTAGRAM instagram.com/VSCPA PODCAST vscpa.com/ LeadingForward

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FROM THE CEO

4309 Cox Road Glen Allen, VA 23060 (800) 733-8272 vscpa.com

disclosures vscpa.com/disclosures disclosures@vscpa.com

JANUARY/FEBRUARY 2020 Volume 33, No. 1 Managing Editor Jill Edmonds disclosures@vscpa.com Editorial Task Force Olaf Barthelmai, CPA Abby Brooks, CPA Cheri David, CPA Melisa Galasso, CPA Genevieve Hancock, CPA Karen Helderman, CPA Harold Martin Jr., CPA David Peters, CPA Mark Plostock, CPA Zach Shoaf, CPA Barbara Sukramani, CPA Disclosures is published six times a year by the Virginia Society of Certified Public Accountants (VSCPA). The magazine’s mission is to communicate information of value to VSCPA members, including professional issues and VSCPA initiatives.

The materials and information in Disclosures are offered as material only and not as practice, financial, accounting, legal or other professional advice.

Statements of fact and opinion are made by the authors alone and do not imply an opinion on the part of VSCPA officers, members or editorial staff. Publication of an advertisement in Disclosures does not constitute a VSCPA endorsement of the product or service. Copyright © 2020 Virginia Society of CPAs.

VSCPA Preferred Providers

Renovating for the future Picture this:

A state-of-the-art facility with on-site learning technology, a large, interactive meeting space, and multimedia studio for video and online learning production. If that sounds future-forward, you’re right, and you can see it yourself at the brand new VSCPA Learning & Innovation Center this year.

Beginning this month, we’re breaking down walls and moving on out — temporarily. Renovations will begin at our headquarters in Glen Allen, the VSCPA’s home since the late 1980s. We added to the building a decade later, and while we have upgraded technology and made tweaks throughout the years, this will be a major renovation.

And it’s time for a different kind of building. With the guidance of the VSCPA Board of Directors, our goal is to create a workspace that is in line with the VSCPA’s 2025 strategic goal to drive innovation and vision. The interior footprint will change, including more space for members to meet and learn. Office space will decrease to add more team and collaboration space and align with the growing trend of more staff working off-site.

We want to make our space collaborative and reflect the type of work we do and how we do it. You’ll find technologyenabled learning, offering members and customers the best experience possible, whether they are here in person or virtually. The building will be brighter and more open, with an emphasis on allowing natural light into the workspace, and our new brand colors and design will be prominent.

It’s just as important to note what’s not changing — our location. The Board looked at several options, from renovating to expanding to moving offices entirely. In the end, they decided that our location in

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Innsbrook office park west of Richmond, with ample parking and easy access to Interstates 64 and 95, was still the right one.

So now we’re looking to bring our physical space in line with our strategies. We look forward to sharing the new VSCPA Learning & Innovation Center with you this spring as we work to keep the CPA profession as vital as it always has been.

Watch our transformation at vscpa.com/ Center. n

Stephanie Peters, CAE, has served as VSCPA’s president and CEO since 2007. speters@vscpa.com @StephPeters

LINE ITEMS

CHIEF IRS CHALLENGE: DATA PROTECTION

A new plan to boost Virginia’s trade Despite being one of the best states for business, Virginia doesn’t fare well on state rankings for imports and exports. That’s why Gov. Ralph Northam has made trade a top priority — releasing the Commonwealth’s first international trade strategic plan to increase exports by 50 percent over the next 15 years. Virginia is currently ranked No. 41 for exports and 38 for imports.

The plan encompasses 26 different initiatives in three categories: exports; international supply chains; and business attraction, infrastructure, tourism and other enablers. By focusing on boosting trade, Northam plans to add nearly $18 billion in annual exports and more than 150,000 jobs. Visit www.governor.virginia.gov to find the full strategic plan.

Now in effect: New overtime rules Beginning Jan. 1, 2020, workers earning less than $684 per week, or $35,568 per year, regardless of their job or professional status, must be paid overtime under the U.S. Department of Labor (DOL) Overtime Final Rule. The DOL estimates the rule will make 1.3 million American workers newly eligible for overtime pay. Additionally, the threshold for total annual compensation requirement for “highly compensated employees” increases from $100,000 to $107,432 to reflect growth in wages and salaries. The new thresholds account for growth in employee earnings since the old thresholds were set in 2004. Fact sheets and more info are available at dol.gov.

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Securing taxpayers’ data and protecting U.S.

Internal Revenue Service (IRS) resources is the agency’s No. 1 challenge in 2020, says the Treasury Inspector General for Tax Administration (TIGTA). A letter to Treasury Secretary Steven Mnuchin details the top 10 challenges facing the IRS: 1. Security over taxpayer data and protection of IRS resources 2. Implementing tax law changes 3. Addressing emerging threats to tax administration 4. Supporting an enhanced taxpayer experience 5. Modernizing IRS operations 6. Improving tax reporting and payment compliance 7. Reducing fraudulent claims and improper payments 8. Impact of global economies 9. Protecting taxpayer rights 10. Achieving operational efficiencies TIGTA says, “Taxpayers have the right to expect that information they provide to the IRS will not be disclosed unless authorized by law. Because this information is considered extremely valuable, the IRS is a target of criminals and identity thieves. As such, the IRS must ensure that its applications are secure against threats on the Internet.”

Find more information on all of TIGTA’s recommendations at treasury.gov/tigta.

LINE ITEMS

TICKER 2.7 MILLION The approximate number of one-time refund checks mailed out to Virginia taxpayers last fall by the Virginia Department of Taxation.

$8.17 MILLION The average pay in 2018 of the top-earning CEOs in Virginia according to a pay survey

by Virginia Business magazine.

12.5 PERCENT The average increase in pay those CEOs saw in 2018 over 2017.

Diversity matters for your business Fostering an environment that respects and reflects diverse people, cultures and

perspectives is important for all organizations. Evidence shows that businesses with diverse talent are more innovative and achieve financial results 19 percent or greater.

Kimberly Ellison-Taylor, CPA, former chair of the American Institute of CPAs, even calls diversity and inclusion “the key to our strategic year-over-year advantage.” By 2044, minorities will become the majority of the U.S. population, and by increasing diversity in your firms and companies, the CPA profession will ensure it is best poised for growth and success.

So what can you do today? Take a cue from the VSCPA and consider these ideas:

P Include diversity in your organization’s core values. The VSCPA aims to create a collaborative and inclusive environment.

P Sign on to the CEO Action for Diversity & Inclusion. Join VSCPA CEO Stephanie Peters and other Virginia CPA firms by signing on to this pledge to advance diversity and inclusion within the workplace.

P Expand your learning to include inherent biases and consider 294 BILLION The number of emails we currently send every day, worldwide.

49 The number of years ago that email was invented, believe it or not.

27 The average American commute, one way, in minutes.

17 The number of additional hours per year the average American spends commuting now than in 2009.

43 The record percentage of voter turnout in November’s Virginia General Assembly elections.

implementing unconscious bias training at your organization, like the VSCPA has done for Board members and staff.

P Consider your recruitment techniques. “We’ve got biases in how we recruit people,” Ellison-Taylor says. “If we always do what we’ve always done, we’re going to get what we’ve always gotten. How many people are amazing and gifted and would never see your desk?”

If you need help on where to begin, look no further than the VSCPA’s Center for Innovation. A special resource center just for diversity and inclusion has learning, assessments, recruiting and retention guides, implementation resources and much more. Visit vscpa.com/Diversity to begin, and if you have questions, contact VSCPA Innovation & Leadership Director Laura Cobb, CAE, at lcobb@vscpa.com.

WHAT’S THAT MEAN?

Ghosting When a job candidate suddenly disappears from communication during the recruitment process. This could be missing an interview without notice, failing to respond to phone calls or even failing to arrive on the first day of work — after being hired.

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TECH TALK

EXCELLENT EXCEL

A warning from the FBI

U.S. business and organizations are under attack from ransomware, according to a Public Service Announcement from the U.S. Federal Bureau of Investigation (FBI).

Ransomware is a form of malware that encrypts files on a victim’s computer or server, making them unusable. Cyber criminals demand a ransom in exchange for providing a key to decrypt the victim’s files.

The overall rate of ransomware attacks remains consistent, but those attacks are becoming more targeted, sophisticated and costly. These attacks are hitting companies through email phishing campaigns, remote desktop protocol vulnerabilities and software weaknesses.

If your company is hit, what should you do? The FBI does not advocate paying a ransom, which can embolden criminals, and instead report to law enforcement. How can you protect yourself?

A robust system of backups is imperative, the FBI says.

Check out the PSA and cyber defense best practices at ic3.gov.

This is similar to a warning issued in September 2019 by the U.S. Internal Revenue Service to tax preparers and accounting firms that cybercriminals are evolving and becoming more sophisticated. Firms should take simple steps, like using antiphishing software and backing up systems, to prevent data theft.

Self-proofing with Text to Speech Do you ever key information into Excel for which the accuracy is super critical? You could type it twice and create a formula that reports any differences and hopefully you didn’t make the same mistake twice. As another option, you could get another person to review your work, but they may not always be available. Instead of using these time-tested techniques, consider trying something that one of our newest employees showed me: Microsoft’s Text to Speech. Text to Speech does exactly what it sounds like: it reads any text, including numbers, aloud. Before you can use Text to Speech in Excel, you need to add its commands to your Quick Access Toolbar by right-clicking on the Quick Access Toolbar (the green bar at the very top of Excel) and selecting Customize Quick Access Toolbar… Then, from the selection menu under Choose commands from: change Popular Commands to All Commands. Finally, scroll down and select Speak Cells and Speak Cells on Enter. After you select each command, you will need to click the Add >> button. To complete the process, click OK. Now you can use either button to have Excel Speak Cells selected or Speak Cells on Enter as you have Excel read what you entered aloud as you visually check it to your source information. If you don’t like the default voice, there are ways to change its style and/or speed.

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

Finance embraces new tech Finance departments are bringing on new technologies at a fast pace, a survey from Grant Thornton and CFO Research discovered last year. Forty-two percent of execs surveyed said their teams were implementing advanced or automated tools for budgeting and forecasting, while only 25 percent said the same in a similar survey the previous year. Those new technologies include advanced analytics, artificial intelligence, blockchain, drones and robots, machine learning, optical character recognition and robotic process automation. Want your firm or company to get ahead, too? HURRY: The early bird rate for next December’s Technology & Innovation Showcase ends Jan. 31. Register at vscpa.com/Showcase.

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ADVOCACY

A new year, a new leadership for Virginia VSCPA stays on top of electoral changes and will advocate for CPAs’ interests this General Assembly session.

On Nov. 5, 2019, Virginians elected candidates

to fill all 140 seats in the Virginia General Assembly. Historically, Virginia has had a limited change in the General Assembly because of the state’s off-year election cycle. However, due to a courtordered redistricting, the retirement of many longserving incumbents and lack of federal or statewide races, 2019 was much more competitive than normal.

The competition was most evident by the record number of contested races in both chambers and the amount of money spent by candidates and political parties. As one of the only states with all legislative seats up for reelection in 2019, Virginia is certainly seen by many out-of-state individuals and groups as a bellwether for 2020 elections.

Democrats won control of the House of Delegates for the first time in more than two decades. Proof of the importance of Virginia’s elections is clear in the fundraising numbers. Money raised by candidates and their parties does not buy votes, but it does provide candidates with the ability to communicate their messages. The final amount of money spent by candidates seeking election to the Virginia General

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Assembly was not available at press time, but we know that 21 candidates spent more than $1 million on their campaigns and another 16 spent more than $750,000.

By comparison, in 2015 just 16 candidates spent $1 million.

Del. Eileen Filler-Corn will be the next speaker of the House — the first woman and the first person of the Jewish faith to hold that position. Del. Charniele Herring will be the next House Majority Leader — the first woman and the first African-American in that post. Del. Rip Sullivan will be the chair of the newly expanded House Democratic Caucus. In the Senate, Sen. Richard Saslaw will reclaim the title of Senate Majority Leader he previously held five years ago.

We will communicate with the following legislators appointed to chair positions. In the House: Del. Luke Torian, Appropriations Committee; Del. Vivian Watts, Finance Committee; Del. Jeion Ward, Commerce and Labor Committee; Del. David Bulova, General Laws Committee. In the Senate: Sen. Janet Howell, Finance Committee; Sen. George Barker, General Laws and Technology; Sen. Dick Saslaw, Commerce and Labor.

ADVOCACY

Tax conformity will again be an issue early in the session. We are working with Virginia Secretary of Finance Aubrey Layne, CPA, a VSCPA member, and his team as well as legislators from both parties to stay abreast of the rapidly developing issue. We will be calling on you in January to help us educate elected officials on conformity and how it affects every Virginian. The VSCPA has also endorsed a coalition of other learned professionals to advocate for smart professional licensing standards. Other state societies are battling to keep rigorous standards in place for CPA licensing, and in Virginia we are closely monitoring any regulatory reform proposals.

Other issues we are monitoring for their potential effect on the profession including license mobility, gambling, regulatory reform, procurement for professional services and broadband access.

The VSCPA Advocacy Team has spent decades building relationships with key committee chairs and expects to have great relationships moving forward. We are already hard at work reaching out to the new batch of legislators who will be sworn in for the first time in January; more than a third of the General Assembly will have two or fewer years of experience when the new session begins. Join us at CPA Assembly Day on Jan. 21 (see sidebar) and you can help advocate for important issues, too. n

CPA ASSEMBLY DAY IS ALMOST HERE! VSCPA Assembly Day is slated for Tuesday, Jan. 21, 2020, and your support is more important than ever in connecting with members and

Feeling IGNORED

sharing the priorities of CPAs across the Commonwealth. With the exciting and historic 2019 elections behind us, we are preparing to meet the new

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crop of legislators and re-introduce

The VSCPA Insurance Center and Employee Benefits of Virginia can help.

Our focus is providing creative, engaged, and high touch solutions to Virginia’s CPAs and their organizations. We do not ignore or avoid smaller firms. Instead we understand and appreciate the unique needs of these employers. There is no doubt the Affordable Care Act has made everything much more complicated. If you need help managing your employee benefit plans and do not believe you are getting what you need from your current employee benefit partner… please contact us. There is a difference!

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ourselves to the returning leaders. It’s a members and meet with your legislator about issues that are important to you and the CPA profession. You can also attend committee meetings and observe the House and Senate sessions.

When the General Assembly convenes in January, nearly a third of the members will have less than two years of experience. Don't worry if you are a political novice yourself, we will get you up to speed and help you plan your meetings with legislators and staff members. To register, visit vscpa.com/ CPAAssemblyDay or contact Public Affairs Director Tim Barry at tbarry@ vscpa.com. If you have an existing relationship with a legislator, please let Tim know!

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INNOVATION

HOW TO EFFECTIVELY IMPLEMENT innovation To safely navigate the path to success, follow this road map for adding new products and services.

Not too long ago, Business Insider published a

By Amy Vetter, CPA/CITP, CGMA

list of some of the worst product launches in history.

While it’s funny to recall that Coke once thought it was a good idea to abandon its classic formula, many of these stories are learning opportunities for today’s accounting firms planning their strategies for the future.

Innovation doesn’t just happen magically. A smooth launch of a product or service is the result of countless hours of research, across-the-board adoption by your team and a marketing plan that encourages customers to give your latest offering a try. All too often, people assume that if they hash out the marketing first, everything else will fall into place.

It’s important to put the right amount of time into your strategy and not fall into this trap. Without a plan, you can end up wasting time and money on marketing a

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service you aren’t able to deliver. To avoid that fate, follow these suggestions for better implementation of innovation.

RESEARCH AND STRATEGIZE One of the most important steps in starting a company is creating a comprehensive business plan. Similarly, when you seek to add a new service or product line, you should develop a plan for it from the earliest stages.

Development of the plan begins with research to determine what services or products your business should consider adding. You can look to all kinds of sources for inspiration. Maybe the great idea will come from customer or client requests. Perhaps it will arise from looking at the Big Four and seeing which new services they are launching.

INNOVATION

A good way to unearth potential new services or products is to interview your clients or customers and find out about their businesses’ pain points and future aspirations. You can then brainstorm new ways to serve them. Another approach is to look to other professions for inspiration, adapting trends or customer service practices to your business. All these routes can be fruitful, so keep your eyes and ears open for ways to add value to your customer experience.

Once you’ve settled on an innovation, it’s time to strategize. Sit down with all your key players and determine, in as much detail as you can, what the service or product will be. Then designate which parts of the service are the highest priority to develop. This will help you avoid trying to bite off too much right away.

FREE ONLINE CPE • 2019 INSIDE Public Accounting National Benchmarking Report: Highlights, Trends and Best Practices: Jan. 9, 2020 (1-332/20) • VSCPA WOWbinar: Innovation Series — Featuring CAMICO: Jan. 15, 2020 (1-327/20) • VSCPA WOWbinar: Innovation Series — Featuring Jetpack Workflow: Feb. 19, 2020 (1-328/20) Register today at vscpa.com/FreeCPE.

HASH OUT TIMELINES AND WORKFLOWS After the initial stages are set, you need to project how long it will take to launch the new service. It’s best to be conservative in your estimates. A service that’s ready to go early is great, but one that requires delay after delay will frustrate your teams internally and keep your customers on edge. To help the process move more quickly, dedicate a special task force team for R&D solely to the new initiative — or, if you are with a small firm, designate a champion who has the passion to push the project. Alternatively, you can outsource to experts in the area that you are developing.

Trying to balance new service development with a regular client workload will only cause both to suffer.

One benefit you derive from dedicating time to researching the new service is the insight you gain on how to eventually market it. This is another reason to hold off on marketing until you have a better idea of what the launch will look like.

TEST, TEST, TEST At every iteration of development, you should be testing the service. A Fast Company guide called “How to Test Products Like a Googler” notes that using a tiered approach allows you to progressively gather more feedback as the launch approaches.

“We first conduct formative and evaluative user research,” the guide notes, “then we move to a ‘Trusted Tester’ program, which helps us gather feedback at scale, and finally we launch an ‘Early Adopter’ program to scale even further.”

Consider adopting a similar approach for your testing — albeit on a smaller scale than world-conquering companies like Google.

At first, tests should be internal but should include team members who are not working on the service and can analyze it with a fresh perspective. As you move further along, bring in some trusted advisers or a small group of select clients to try the offering for free. Ask them for feedback on how to improve, whether

the service is valuable, and if it’s something they’d be willing to pay for. There will always be kinks to iron out after launch, but thorough testing will limit them as much as possible.

PRIME THE RUNWAY You should really zero in on your marketing during the final stages of development. By this point, you understand why you are delivering this service line, how it will be executed and what the intended outcomes are. The more background you have, the better you will be at communicating the value to customers, which is what effective marketing is all about.

You should rachet up your marketing efforts six to eight weeks before launch. At that time, you can begin to create organizationwide knowledge and enthusiasm for the offering. Train your teams on how to discuss and leverage your innovation with current clients as well as using it to entice new ones.

Sure, innovation is great, but innovation without a plan would be better described as wishful thinking. By being transparent and setting the right expectations, defining what needs to be done at each stage, and communicating often, you will innovate in a way that delivers value. Plan early, test often and do the legwork required to make a new service stick. n

Amy Vetter, CPA/CITP, CGMA, is the CEO of The B3 Method Institute, a keynote speaker and adviser, Technology Innovations Taskforce leader for the AICPA’s Information Management Technology Assurance (IMTA) Executive Committee and the author of the book “Integrative Advisory Services: Expanding Your Accounting Services Beyond the Cloud,” published by Wiley. Learn more at amyvetter.com.

This article was originally published in the American Institute of CPAs’ (AICPA) CPA Insider e-newsletter.

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YOUNG PROS

PHONES down!

Use your CPA skills to manage your time on social media.

It’s 3:30 p.m.

on a Tuesday, the trial balance is out of balance by $57,000 and retained earnings don’t tie to the prior year. “Ok, I only have one more hour and 27 minutes left to finish this project,” I think to myself.

Feeling flustered, I reach for my phone subconsciously.

I start trolling social media. Now I’m caught up with Kylie Jenner’s latest beauty product, engaged in a fruitless Twitter battle over college football and discovered that I look best in the Clarendon filter. An hour drifts by somehow. Where is that elusive $57,00?

How did I waste so much time? Does this scenario sound familiar to you? Is social media a tool or a hindrance to your workday? Are you ready to take control of your life and learn to leverage your time on social media?

Amanda Phelps, CPA

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PLAN AND EXECUTE AN AUDIT If you want to make a change and start managing your time spent on social media, first you need to take an audit. Gather data and analyze it. How much time are you spending on social media? How often are you checking social media and at what time? Which apps are you checking? Use Excel to map out exactly when and where you are spending your time on social media. Write down the results of the audit.

If you are having trouble identifying the data, there are several apps that can help you track social media usage, such as MyAddictometer. Be honest with yourself. Does social media interfere with your workday? Does it help you achieve professional goals?

Would you be comfortable with your manager seeing the results to this audit? Many studies find that the use

YOUNG PROS

of social media can lead to por work productivity, not to mention depression and anxiety. Unhealthy relationships with social media are commonplace today. Plus being on your phone all the time is just RUDE. Ask yourself the most important question: Does using social media add value and help you meet your professional goals?

INTERNAL CONTROLS Based on your audit, you may find that it is time to implement some internal controls. Here are some controls you can put in place to manage your time on social media: • Build social media breaks into your day. Having built in social media breaks can help you from impulsively checking your apps.

• There’s an app for that. You can install apps on your phone that can limit your social media usage. The app will send you an alert when you reached your set limit on social media. Try an app like Offtime. This app tracks your usage and you can schedule time outs. Freedom is another great app that blocks distracting websites like ESPN and YouTube during scheduled work hours.

• Turn off push notifications. Are you getting a windfall of alerts? Do you really care that Karen made chicken and broccoli again for dinner? Go into your settings and turn off these distracting, useless notifications.

• Greyscale your phone. The shiny bright little apps excite and reward the brain. Smartphones now have options that will turn your colorful paradise into a not so exciting 50 shades of grey. Your brain won’t be as enticed.

• Stop using your phone as an alarm clock. Often people check their social media before their feet hit the floor in the morning. Switch to old school alarm clock to help break your social media addiction.

• Find something else to do. Most likely you work on a screen already, so a different type of break would be better. Go for a walk, grab coffee or read a book.

• Delete the apps. You can’t check what you don’t have. You don’t have to delete your accounts; you can just delete your apps off your phone.

• Leave your phone at home. I know this might sound like blasphemy, but it can be freeing. You don’t have to leave it behind every day, but every now and then can be therapeutic. Or leave it in the car. Don’t worry; those who want to get a hold of you will call your work number. Has anyone ever actually called you on your work phone?

LEVERAGE SOCIAL MEDIA Can you leverage your time on social media to your advantage?

Maybe your job promotes the use of social media? Even if your company doesn’t blatantly support social media use, you should still build a social media presence. A lot of accountants have found social media beneficial for marketing and branding themselves. Today business deals can happen over Facebook Messenger. Firms can use social media to advertise, find and communicate with clients. Ask yourself: Can advertising your business or yourself on social media generate revenue? Here are some tips to help you make the most of your time on social media: • Keep profiles up to date. If you are using your senior picture, it may be time for a new headshot.

• Grow your network. Find a platform and seek out likeminded individuals.

• Open yourself to new opportunities. Mark your LinkedIn profile to be open to new connections and prospects.

• Share relevant posts at strategic times. Use a scheduling app to share relevant content and plan.

• Engage in thoughtful discussions. Check out accounting discussion boards.

• List your social media handles and websites in your e-mail signature.

FINAL THOUGHTS Social media is a powerful tool. The key is to set boundaries and utilize social media to achieve your goals. Effective strategies of social media time management are unique to the individual. Take an audit and implement internal controls. Execute a plan that works for you. If you can’t break the addiction, leverage it to your advantage. Make sure your social media is adding value to your overall goals. Use social media to brand yourself, engage in fruitful discussions and stay up to date on relevant topics. Hold yourself accountable — you’re an accountant after all! #socialmedia #timemanagement #accountingforsocialmedia n

Amanda Phelps is a recruiting manager at Robert Half specializing in the placement of finance and accounting professionals in Hampton Roads.

She is a member of the VSCPA’s Young Professionals Advisory Council (YPAC). amandaphelps3@gmail.com

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PRACTICE DEVELOPMENT

4 generations, 1 WORKFORCE It’s time to debunk generational myths and discover how all generations can work together — including recruiting and retaining the youngest generations.

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PRACTICE DEVELOPMENT

Traditionalist, Boomer, Gen X, Millennial, Gen

Boomers were large in numbers and feasted on TV dinners. They worked a lot and were faced with being drafted to the Vietnam War — bringing about the peace and love mantra, and transformed equality in the workforce, contributing to the women’s rights movement. This generation believed in working hard but playing even harder (the Woodstock generation).

We are in a unique time in history: four generations co-exist in the workforce at one time and a fifth is drawing benefits and pensions. CPAs who are willing to embrace and capitalize on these generational differences will position their firms to have maximum growth and potential into the future.

Gen Xers are the smallest in numbers; they love takeout food and watched the Challenger space shuttle blow up with the first teacher in space on board. They were saddled with recession during their working years and experienced the largest mortgage and financial meltdown in history. Gen X is very competitive and individualized but also family-focused — very devoted to their children, baby-on-board (the “soccer mom” generation).

Z — the greatest generations of all time! CPAs often don’t like change, especially before tax season, but one thing is certain: Change is inevitable. Not just in tax laws, new standards, updates from the PCAOB or new technologies, but in a rapidly changing workforce landscape.

Cheri G. David, CPA, CVA

THE GENERATIONAL BREAKDOWN Growing up, I remember hearing that the World War II generation was the greatest of all time. I am a classic Gen Xer, raised by Boomers and now a mother of four, raising a few Millennials and Gen Zs. Before I could write about CPAs capitalizing on workforce opportunities, I had to understand a few basics.

Generations are broadly divided in time by world events, socio-economic experiences and technology.

Pew Research Center has more narrowly identified the generations as follows: • Traditionalists (The Silent Generation): Born 1928–1945 (73–90 years old) • Baby Boomers: Born 1946–1964 (54–72 years old) • Thirteeners (Gen X): Born 1965–1980 (38–53 years old) • Millennials (Gen Y): Born 1981–1996 (22–37 years old) • Centennials (The I Generation, Gen Z): Born 1997–Present (0–21 years old) World War II and the Great Depression formed the Traditionalists. In an era of scarcity, this generation learned to produce, store and make anything happen with very little. They regularly prepared home-cooked Sunday meals. Success was defined by the ability to provide for the family.

Millennials are tech-dependent, considered the healthiest generation of our time and are speculated to live longer in part because of eating fresh organic meals. They are the most educated of generations, saddled with government student loan debt, and strongly impacted by 9/11. They are unpredictable, passionate for a cause and have lots of creativity with success. Many have delayed marriage and starting a family.

To Centennials, technology is historical — they don’t know life without that experience. To them, Amazon is the major retailer and diversity equals equality; it’s not just about women, but about equality for all genders and races. They will never remember a time before gay marriage or having an African-American president.

EMPLOYER GENERATIONAL JUDGMENTS So how do these generations play out at work? It starts first with judgment. After identifying which generation a worker falls within, employers often make judgment calls about whether to hire or not hire based upon certain myths. According to a 2019 article published by the American Management Association, some of these myths include: •

Traditionalists: Value hard work

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Baby Boomers: Value loyalty

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Gen X: Value work-life balance u

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Millennials: Value innovation and change

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Centennials: Just entering the workforce

In “Retiring the Generation Gap: How Employee Young & Old Can Find Common Ground,” author Jennifer Deal defines the negative stereotypes: “the Silents are fossilized, the Boomers are narcissistic, the Gen X ers are slackers and the Gen Yers/ Millennials are even more narcissistic than the Boomers.”

These varying degrees of judgment affect how a job interviewer analyzes a potential employee. With each generation completing the interview process from a different lens, generational differences can cloud the ability to see beyond the stereotype and miss potentially top and talented candidates.

GENERATIONAL CONFLICT IN ACTION Here’s how a conflict among generations, as well as stereotypes, may play out in the workplace. A Monday meeting is scheduled.

The Traditionalist, a senior partner who is always at the office at 5 a.m., meets with his loyal and on-time Boomer managing partner, who has worked all weekend. The Boomer then calls from his Blackberry to the Gen Xer who is working from the home office.

The Gen Xer then calls from her home PC to the Millennial — who called in from his iPhone after a long weekend in Miami and asks if he could video in for the meeting from his MacBook Air. Each of the generations show up for the meeting. So where is there a problem? A conflict occurs because there is a general threat of change among the generations. If the Boomer and Traditionalist value being on time and in the office for the meeting, but the Gen Xer and Millennial value their freedom of choice and ability to soak up the sun during the meeting, then value differences intersect in the workplace.

Of the current four working generations, the Millennial is likely to be viewed as uncaring and uncommitted to the organization.

The reputation that follows Millennials is largely created by the perspectives and attitudes the Millennial generation brings.

Further adding to the conflict is that Traditionalists and Boomers may feel that by accepting the Millennial workstyle, they are enabling Millennials to continue that behavior. But the Millennial may feel disrespected by the Traditionalist and Boomer for not appreciating their ability to show up for the meeting by way of technology. All show up, but there are distinct generational values in conflict.

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numbers like that, businesses cannot ignore the Millennial workforce. Currently they represent the largest population of workers, and in 2016 surpassed Baby Boomers in population.

What they think, how they feel and their ideals and outlook are very much going to be the most major influencer of our time since the Boomer generation.

Capturing Millennial attention is not only necessary, it is economically smart for companies and firms to embrace the distinct differences and recognize how valuable these tech savvy creative thinkers can be. Training costs don’t have to be lost on this generation — training just needs to be modified to attract and keep this generation interested.

THE ‘GIG’ ECONOMY There are often generational differences in how workers approach careers. Many Traditionalists stay in an organization through retirement, Boomers may change careers a few times in a lifetime, Gen Xers exhibit entrepreneurial spirit and Millennials bring a new phrase — the “gig” economy. To “gig” is to do something for the short-term gig and move on. In an age of Instagram, Snapchat and texting, Millennials lose patience very quickly.

I mean, who can blame them? They have had access to social media for most, if not all, their adult lives. Quick feedback and constant distractions don’t make it easy to keep their attention for long. Multi-generational offices need to recognize that it’s not Millennials’ fault — they are just products resulting from a new era of technology.

YES! YOU SHOULD HIRE MILLENNIALS AND CENTENNIALS According to Deal’s book, generational stereotypes are nonsense.

Her research of 3,000 corporate leaders indicates that these myths don’t hold much weight. Deal writes, “Everyone wants to be able to trust their supervisors, no one really likes change, we all like feedback, and the number of hours you put in at work depends more on your level in the organization than on your age.” Generational conflict can be resolved by solving miscommunication and misunderstanding. At their cores, employees are driven to another job or away from a job because of their desire to advance or an insecurity of not being successful.

THE ECONOMIC COSTS OF GENERATIONAL CONFLICT

Therefore, the cost to employers for training and keeping the new Millennial employee can be greatly reduced by recognizing and embracing generational differences. By embracing the Millennial’s spirit, we aren’t really enabling or isolating one generation for the other or making another generation irrelevant. We are merely modifying and accepting.

A recent Gallup study reported that Millennial job turnover is costing the economy $30.5 billion a year. With staggering

New generations are less interested in status or fancy iconic labels. Among many factors, I believe there are really seven main

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factors that will help your organization retain this new genre of employees: Clear and concise communications: Unlike Boomers, who may have offered vague directions in the workplace, Millennials digest vast amounts of data very quickly. They are amazing multi-taskers and are notorious for moving around quickly from subject to subject. By recognizing this, employers should plan tasks with an end date. Set clear, concise deadlines and allow flexibility on the “how” they get to their part. Micro-managing will not work with this generation.

Focused training: Unlike the earlier Traditionalists and Boomers, who did “on-the-job training” that took time and patience, Millennials want a quicker, well-defined pathway to grow in the company. Engaging in aggressive, time-efficient and focused training help builds loyalty.

Have empathy: Eighty-two percent of employees would consider leaving their job for a more empathetic organization, according to a 2018 Businessolver State of Workplace Empathy study. This new generation thrives on diversity and acceptance.

Bringing equality and inclusivity to the forefront of your companies goals draw talent and loyalty to your organization.

Be a collaborative team: Millennials like team-based work, and feelings of motivation are spawned by group feedback.

Instant feedback: Millennials crave constant feedback. Gone should be the day of the annual review! Don’t be vague, provide distinct timelines, provide feedback every day. The use of Instagram and private messaging in this generation means that feedback in two-minute increments keep them engaged.

They want you to be interested in them and what is going on in their lives.

Provide purposeful employment: This new generation of employees wants to know their purpose and their role in helping grow the company or give back to the community. Employers who consciously give back to society and help the environment grab interest.

Make use of efficient technology: Technology is only new for Gen Xers and prior; Millennials appreciate the efficiencies and broad uses of technology. Centennials don’t know life without it.

Embracing technology should be a given, not an option, within any firm or organization.

Offer loads of flexibility: Employees report that work-life balance is an important part of mental health. Employers should consider having flexible work weeks and half-day Fridays and honoring family leave absences. Provide a work-from-anywhere approach. As long as the work gets done, does it matter if your staffer reports in on Monday from Miami?

MARKETING TO MILLENNIALS In case you have been living under a rock, the color gray is in — it’s the new beige. There are several studies that have indicated that a home’s value increases by 6 percent or more just by the color of the walls within in it. Also, the size of the home matters too. While Boomers are trading in and downsizing, Millennials, saddled with student debt, are choosing to buy closer in urban villages where they don’t have to buy a car to shop or work. To put this into perspective: A study commissioned by Zipcar, a carsharing company, stated that that nearly 40 percent of Millennials believe that losing their phone would be a bigger hardship than losing their automobile, access to a desktop or laptop computer, or a TV set.

This environmentally conscious workforce is driving the direction of businesses and how they market. CPA firms with antiquated time and billing procedures and advancement policies stifle creativity of this generation. Millennials love creativity, and as a whole, don’t really care about the status. They are not the same as the Boomers or Traditionalists and are not as competitive as their predecessors, the Gen Xers.

Their focus is on making a difference in people’s lives. Whether they bill (or not) or make a lot of money (or not) isn’t going to drive them to become partner. What drives them is how their efforts affect the people around them, their local businesses or their world. Consider doing away with the timesheet or using it only for metrics within the firm. Value-added billing could help reduce your employee turnover rate and training costs, and you may even have better retention of the Millennial and upcoming Gen Z staff market.

THE FUTURE OUTLOOK A good succession plan and future of your firm will be dependent upon this next generation. What they think, how they feel and their approach to the world will make or break the continued success of the CPA firm in the future. Now is the time to embrace, accept and be inclusive of the next largest and potentially even greater generations of our time. n

Cheri G. David, CPA, CVA, has 20 years of experience in tax, financial and small business consulting. She is an owner and managing partner at Clarkson David, CPA. She is a member of the Disclosures Editorial Task Force. cheri@clarksondavid.com @clarksondavidcpa linkedin.com/in/cheridavidcpa

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ENTICE THEM early Needing entry-level recruits, CPA firms are using multiple ways to woo new accountants.

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The accounting profession is changing. Because

of the automation of routine accounting tasks, CPA firms will not need to hire as many accounting graduates for entry-level positions. Future entry-level CPAs will need to shift from preparing historical financial documents based on past transactions to providing advice for financial decisions based on realtime data.

Gabriele Lingenfelter, CPA

Simultaneously, firms are complaining about the perennial talent shortage. There have been concerns about the adequacy of the CPA pipeline — the population of candidates who are in the process of taking the CPA Exam. With a large number of CPAs expected to retire in the next 10 to 20 years, the question remains if enough CPAs will be available to take over. While majoring in accounting remains popular, there has been a slight decline in new CPAs over the last few years. Some attribute the decline to anticipated changes in the CPA Exam, while others cite the trend of accounting students entering careers in consulting, which do not require the CPA designation.

Regardless of the changes occurring, one fact remains: CPA firms are trying to attract and hire the best candidates and are doing so at earlier and earlier stages of accounting students’ education. When I started teaching in the late 1990s, it was common for accounting firms to hire the best accounting students for an internship during the summer following their junior year. If the intern performed well and fit into the firm’s culture, the intern received their offer for fulltime employment. However, this has changed.

An article in the Aug. 1, 2016, Journal of Accountancy compares the recruiting of accounting students to college athlete recruiting. Both are happening at an earlier and earlier stage of the athlete’s or accountant’s live. College coaches may recruit potential athletes as early as in middle school, while the increased competition for top quality accounting students has driven CPA firm recruiters to engage college juniors, sophomores and freshmen to their firm.

Numerous early recruiting events are being utilized.

These interactions between CPA firm and student take many forms, from accounting club and classroom visits and receptions to competitions and externships.

EXTERNSHIPS Externships, similar to internships but shorter in duration, involve experiential learning during which employers provide students the opportunity to learn about the organization, culture and a typical day at work. They present a middle ground for recruiters; waiting to recruit at the junior level may be too late, while recruiting students as sophomores may be premature because little is known about students’ performance in accounting classes and career goals.

As it is often too expensive to offer an internship to a sophomore who in the end may not work out, an externship presents a lower cost alternative and is an effective way of reaching students early in their accounting careers.

Externships are typically one- or two-day visits to a firm, during which the externs will learn about the firm’s culture and participate in various activities, and the firm will learn about the participants. These externs are often the pool from which the firms will select the future interns.

Numerous CPA firms in Virginia offer externships; here are a few examples. Each July, Mitchell Wiggins offers its Engage Leadership program, which promises to let externs take a look at the life of a CPA. The program prides itself in truly emerging students in the day of a CPA and emphasizes the importance of fitting into the firm’s culture. Externs visit a client and prepare a presentation upon returning to the office. Wall, Einhorn and Chernitzer offers a two-day externship in May that includes an office tour, team building, client shadowing and mock interviews.

Johnson Lambert actually has two opportunities for accounting students to dabble in accounting: Job Learning is a half-day program in January to introduce sophomores and juniors to accounting, and E.L.I.T.E (Empowered Leaders Inspiring Tomorrow’s Excellence) is a selective two-and-a-half day event held in May where participants learn about the firm’s business lines and culture. The Discover KPMG program invites externs to an evening reception followed by a full day of interviews, introductions of KPMG’s different service lines and panel discussions.

While externships are a valuable recruiting tool u

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for CPA firms, students simultaneously are appreciative of the benefits externships offer. “I attended Engage Leadership with Mitchell Wiggins,” said Tamera Williams, a junior accounting major at Christopher Newport University (CNU). “It was an amazing opportunity to get a behind-thescenes look at what does life look like as a CPA. Not only did I get to see the company culture, but I also got to visit one of their clients, Virginia Homes for Boys and Girls, and learned how Mitchell Wiggins played a role in helping the organization thrive.

However, the most significant part of the program for me was just getting to talk to CPAs and ask questions about internships, the CPA Exam, their day-to-day and the things they wish they had known before starting their career.”

“When I began my recruiting process, I decided to explore externship options with firms of all different sizes,” said Sabrina Lingenfelter, a fourth-year student at the University of Virginia. “I found this important because the size of a firm not only affected the clients, but it also changed the culture and resources the firm had. By externing with a Big 4 firm, a mid-sized firm and a regional firm I was better able to decide what type of firm fit my personality the best and what I wanted a firm to do for my career.”

“As a first-generation college student who switched majors from physics to accounting, I started off oblivious to the different opportunities the accounting profession had,” said Mulatawork Hilton, a 2018 CNU grad. “I took advantage of various externships to ensure I found a firm that was right for me. I had an opportunity to extern with various medium and Big 4 firms my sophomore and junior year, and I realized the job is the same wherever you go, but the culture and environment differs from firm to firm. Though my externships, I was able to find the firm that best fit my needs!”

LEADERSHIP CONFERENCES Leadership conferences or summits are

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another avenue to expose a select group of accounting students to a CPA firm while simultaneously building the students’ leadership skills.

BDO offers a summer leadership conference called Pathway to Success during which students attend presentations and networking events that allow them to learn more about public accounting and BDO. To be selected for the program, applicants must have completed the interview process for an internship the following year.

As one manager at a large national CPA firm stated, the group of students attending their program provides them with "a head start on interviewing for our summer internships, so it really does give the students an advantage when looking for an internship for the following summer.”

DHG Leadership Conference is a two-day event where students learn leadership skills and network with DHG professionals. To be selected for the Leadership Conference, students must submit an application, résumé and unofficial transcript.

CASE COMPETITIONS Case competitions are not frequently used as an early recruiting vehicle, likely because of the time and effort involved in running these competitions, but they also provide opportunities for firms to connect with recruit. When I started teaching at CNU, Goodman & Company (now DHG) sponsored the Goodman Accounting Challenge, a one-day event that required a team of accounting students to research and present solutions to problems commonly encountered in public accounting. The competition attracted teams from universities in Virginia, North Carolina and Maryland and was an excellent way for the CPA firm to establish a relationship with the top students at the participating universities.

PWC has a case competition open to freshmen and sophomores in a four-year

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program and freshmen, sophomores and juniors in a five-year program. The team consists of four to five members, and at least two must be in or plan to apply to the business school. The team is also encouraged to include a member who will major or minor in a relevant STEM discipline such as data analytics. The team showcases its critical thinking and communication skills and the members gain a broader network of relationships.

At KPMG, teams of four tackle global issues in the Innovation and Collaboration Challenge (KICC).

The experience of participating in case competitions can be crucial for students’ careers. “KICC is truly a once-in-a-lifetime opportunity,” said Fernanda Santanna, who participated in KICC in 2015 in Dubai.

“It provided me a chance to collaborate with and learn from peers and KPMG professionals from around the world, think differently about global challenges and solutions, and ultimately kickstarted my career at KPMG.” Santanna now works in risk consulting at KPMG in Brazil.1 As mentioned above, only a few CPA firms use case competitions to narrow the pool of potential new employees and those that do usually focus their effort on the larger schools, which have more accounting majors. Even if case competitions are work-intensive for the CPA firm and likely the professor advising the team, competitions can identify high-quality candidates with excellent leadership potential and critical thinking skills. In my opinion, these competitions attract the most enthusiastic and driven students and should be utilized more to select candidates for subsequent internships and fulltime offers.

DEVELOPING RELATIONSHIPS Establishing relationships with professors and student organizations can give recruiters early access to top candidates.

Recruiters use universities’ career centers and Handshake, an online community for students and recent graduates, or

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similar platforms to post externships, internships and full-time positions, but should not forget the importance of establishing professional relationships with college professors. Professors will be able to identify high-performing and enthusiastic accounting students as early as the Principles of Accounting class and may encourage these students to apply to positions. Professors may also invite recruiters, alumni or other firm employees to their classes as guest speakers, providing a great opportunity for networking and introducing the firm to the accounting students as early as their sophomore year.

Having a regular presence on campus by talking to the members of the Accounting Club or Beta Alpha Psi will introduce students, including sophomores, to

accounting professionals and may sway a student to apply for an externship or internship even if he or she knew previously little about the specific firm.

The officers of the Accounting Club or Beta Alpha Psi typically have excellent leadership and communication skills and are excellent candidates for externship and internship offers.

TAKE AWAY The competition will only increase for recruiting top accounting students who have excellent data analysis and critical thinking skills while also displaying an aptitude to acquire technical knowledge.

Finding the right candidate who also possesses the soft skills needed in today’s professional environment at an early stage

during the student’s education through externships, leadership summits, case competitions or on-campus interactions are crucial methods of recruiting. n

Gabriele Lingenfelter, CPA, MBA, is an accounting instructor in the Luter School of Business at Christopher Newport University.

She is a member of the VSCPA Board of Directors. gabriele@cnu.edu.

1. “Where Are They Now?” KPMG website. tinyurl.com/KICCalum.

Learn From Your Peers LocallyWith Two roundtable series Up to 2 CPE Credits Per Event

Join us at our newly revamped and enhanced members-only roundtables, Management of an Accounting Practice (MAP) and Corporate Finance Roundtables, to hear from industry leaders on hot topics affecting you and your organizations and benefit from the local knowledge of VSCPA members.

These events will be held four times a year in four locations across Virginia — Northern Virginia, Richmond, Roanoke and the Tidewater area. You can attend the full series or drop in for one or more events.

vscpa.com/VSCPARoundtables

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AMERICA’S worth: Another opinion

CPAs should start the conversation on protecting our nation’s fiscal sustainability.

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In “What's America Really Worth,” an

which also directly and indirectly benefit our nation because people who are healthier and live longer not only may decide to work more but also spend more time contributing to society such as volunteering; and sustaining a significant portion of our medical and health care industries. As of 2018, more than 16 million people work in the health care sector, accounting for 11 percent of all jobs in the overall economy.2

The author correctly concludes by stating that there are no easy answers to our problem and that the American people, working in partnership with our elected representatives, must begin addressing the implications of the government’s tenuous position.

To that end, I would like to offer a different opinion by shedding light on our nation’s real worth and offer some suggested next steps for our profession to take.

Conflating financial position with financial condition

article published in the September/October 2019 issue of Disclosures magazine, the author does an outstanding job of analyzing the financial position of the United States government and echoes what senior government officials have concluded for quite some time now; that is, due to primarily our nation’s social insurance programs, our government is on an unsustainable fiscal path.

Domenic N. Savini, CPA, CMA, MSA

THE FEDERAL FINANCIAL STATEMENTS DO NOT REFLECT OUR NATION’S WORTH. Conflating the government’s finances with national worth1 Although the title of the article was designed to be provocative and somewhat rhetorical, to help elevate what needs to be a national conversation, I would like to make a critical clarification. The (uncontested) cited facts in no way provide a sufficient basis to value our great nation. Nothing could be further from the truth — these financial statements portray the financial operations and position of our government and not the nation as a whole.

The author himself quotes the Government Accountability Office (GAO) statement that, “… it is apparent that these programs are on a fiscally unsustainable path.” (emphasis added) Albeit that these programs comprise roughly two-thirds of all federal budget outlays, they are also expenditures that circulate and stimulate the economy. Therefore, on balance and from an economic point of view, such expenditures can be viewed as an “asset” to the nation. Just ask any retiree how they feel about Social Security and Medicare and think carefully about how these amounts benefit the nation not just now, but also well into the future. Some of these benefits include better health and longevity for seniors,

Financial position and financial condition are two separate and distinct concepts, each requiring their own distinct analyses — especially in the case of a nation’s financial condition, which cannot be limited to financial or accrual accounting. Indicators of financial position, measured on an accrual basis, are just the starting point for reporting on financial condition and must be supplemented in a variety of ways. This is because financial condition is a broader and more forward-looking concept than that of financial position. Reporting on financial condition requires financial and nonfinancial information about the national economy and society, as well as the government itself, and could also include comparisons and relationships (such as trade balances and balance of payments information) with other developed economies.3

Financial statements have inherent limitations General purpose financial reporting has limitations, and in many cases users need to consult other information sources to satisfy their needs. Moreover, the Federal Accounting Standards Advisory Board (FASAB) noted that it may be necessary at times to combine nonfinancial information with reported financial information to satisfy users. In part, federal financial reporting is designed to assist the public in assessing the impact that government operations have on the nation’s financial condition and not serve as a proxy for a nation’s wealth or worth. Lastly, to the extent financial statements or the reporting model they are predicated on are bounded, it stands to reason that any resultant analyses, especially those which are forward-looking, must be meticulously corroborated before reaching any conclusion.3 u

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SO, WHAT REALLY MEASURES A NATION’S WORTH? The article’s subtitle states that, “The United States is generally considered the richest country in the world. But our financial statements reveal a more sobering fiscal reality,” which begs the question: How could these persons consider us to be the “richest country in the world” in light of our federal financial statements?

The simple answer is that they know the financial statements of our government alone are not truly reflective of our national wealth.

As a sovereign nation, the United States controls its money supply through monetary policy and controls its ability to tax through fiscal policy. Simply put, our government can print and tax money at will. However unpopular to some, these powers give the government a call on the underlying wealth of the United States and its citizens and could arguably be reflected as assets equal to our liabilities and/or obligations on our federal balance sheet.

Therefore, although the financial position of the United States as depicted by the current reporting model does in fact reveal structural problems, we must (1) understand that not all sovereign powers (or other resources, for that matter, such as the nation’s mineral estate) are reflected as assets on the government’s balance sheet, (2) realize that not all liabilities and obligations come due at a single point in time, and (3) consider other nonfinancial information (for example, economic, demographic and regional metrics and statistics) before our profession can enter into an intellectually honest discourse about how best to solve our fiscal problems.

For example, two very key nonfinancial (performance) indicators that should be considered in analyzing our nation’s worth are Gross Domestic Product and 10-Year Treasury Yields.

Gross Domestic Product (GDP) For example, reporting Gross Domestic Product (GDP) would help users gauge an economy’s overall size and health because GDP measures the total market value of all U.S. domestic goods and services produced in a given year. Moreover, GDP trend information also tells us whether the economy is expanding (producing more goods and services) or contracting (producing less output). Lastly, it also tells us how a nation performs relative to other economies around the world.4

10-Year Treasury Yields One only needs to acknowledge that the United States’ treasuries are considered the world’s safe haven to understand that

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compared to other nations, investors see value in buying U.S. securities that are backed by the full faith and credit of our great nation. As a result, these treasuries enjoy an extremely low but positive yield, mostly due to the fact that virtually no credit risk exists for investors. Underscoring its importance, the 10-year yield is used as a proxy for mortgage rates and other measures and is a sign of investor sentiment about the economy. Keep in mind that a lower (rising) yield generally indicates increased (falling) demand for treasuries, which means investors would rather put their money in U.S. securities as opposed to other non-U.S. government investments.5 Now, if we want to truly know the “worth” of our country, we have to look well beyond the current financial reporting model and the two key indicators noted above. This requires coordination with other disciplines and professions, such as economists and monetary or central banking system experts. Obviously, this would include analyzing key nonfinancial information, but our accounting profession is well-poised to do this and should take the lead.

NOW WHAT? CALLS TO ACTION CPAs can help identify solutions instead of problems It is unlikely that the political parties will come together in a bipartisan manner given today’s highly polarized political environment. Nonetheless, the CPA profession, which is highly trusted by both sides of the aisle, can help educate and influence individual elected officials by encouraging them to seek bipartisan solutions.

However, before we can attempt this, we must become educated ourselves in highly complex topics like economic theories (e.g., aggregate supply versus aggregate demand) and monetary policies (e.g., primary and secondary market operations). To this end, I recommend the VSCPA take the lead and spearhead a much needed and long overdue discussion.

Visit tinyurl.com/VSCPAFramework to see a draft framework wherein we accountants begin communicating with economists and monetary policy experts to get their viewpoints concerning our nation’s financial condition. The most important objective would be to develop alternative structural program changes and funding options for our social insurance programs. The overall goal would be to share these alternative solutions with the public and our elected officials so that our government’s fiscal policies can be changed in a manner supportive of our economic well-being while also being inter-generationally sustainable.

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FURTHER READING “U.S. Fiscal Health Is Failing,” by Gary Dittmer, CPA, CMA, CGMA: vscpa.com/us-failing-fiscal-health Expand financial reporting to include nonfinancial information Additional nonfinancial information (indicators) that could be included in federal financial statements relate mostly to the conditions and factors that drive GDP as well as the demand for U.S. treasuries. They can also be viewed as areas for both the public and private sectors to focus on sustaining and further developing. For example, according to economic theory, a nation’s productive capacity is central to its potential economic output and depends upon the following: 1. Size or quantity of the labor workforce: Number of working age people reflecting those in society who are economically active.

2. Productivity of the labor workforce: Output per worker reflecting the successful leverage of education, skills, motivation and technology.

3. Capital infrastructure: Amount of capital that can be used in the productive process. Capital includes investments in property, plant and equipment and is important for determining long-run economic growth.

4. Raw materials: Amount of natural resources such as oil, coal, natural gas, etc., reflecting a nation’s ability to sustain itself and potential sources of revenue.

5. Entrepreneur potential: Willingness and ability of individuals to take risks by setting up new businesses and developing new products and ideas. Entrepreneurs help drive an economy, create jobs and foster innovation and efficiencies.

6. State of technology: Technological innovations determine the productivity of labor and capital and demonstrate the ability of firms to automate productive capacity.

7. Law and order: Crime rates can have an influence on productive capacity. High crime rates will discourage firms from investing and may hold back productive capacity.

8. Corruption: Corruption often burdens businesses with uncertainty and extra costs dissuading investments and risk taking.

“What’s America Really Worth?” by Tom Visotsky, CPA: vscpa.com/news/whats-america-really-worth

9. Political and judicial stability: Uncertainty from civil conflict or lack of political and/or judicial stability can lead to economic stagnation or decline.

10. Tax collection and public sector investment: Efficient and fair tax collection reflecting a broad base of government revenue enables the government to invest in public services such as health care, education, transportation and defense.

Each of these indicators contribute to long-run economic growth and, at a minimum, several should be reported so they can be continually monitored and assessed alongside reported financial statements. Check out FASB’s conceptual framework, which provides examples of the types of information needed for assessing accountability and for decision making, at vscpa.com/media/1579.

The United States is the envy of the world when it comes to our capital markets and system of jurisprudence. People come here from all over the globe to work and invest their hard-earned money because they know there’s no other place on this planet where they have such an opportunity to live and prosper.

In spite of what some in the media report, we have a solid brand — The United States of America. Were it not so, we would not have foreign countries trying to influence our policies more than ever, as well as so many people clamoring to come through our borders — risking their very lives and leaving behind everything they treasure. Our values of liberty, freedom and justice for all are reflective of our goodwill [which is, by the way, another (intangible) asset not currently recognized in the federal financial statements].

Only by engaging in a discussion with other professions can we as an accounting community refine our understanding of the complex federal financial and economic environment that we find ourselves in today. It is time for our profession to build upon the fine work of VSCPA members like Tom Visotsky, CPA, and Edward Mazur, CPA, in order to elevate the conversation. We should waste no time and begin working with other professions and u

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GOVERNMENT

disciplines in an apolitical way to begin identifying and recommending practical solutions to the government’s fiscal problems.

As a last word, a common sentiment among many people around the world is that whether or not they agree with our U.S. policies, they know one thing for sure, the way the U.S. goes so goes the world. Let’s lead by example and show the world how much we are “really worth.” n Domenic N. Savini, CPA, CMA, MSA, is an assistant director at the Federal Accounting Standards Advisory Board (FASAB) where he primarily serves in the area of infrastructure, addressing such issues as deferred maintenance and repairs, asset impairment and public-private partnerships.

He is founder and chief executive of EthicQuest, LLC. dsavini@ethicquest.com

1. In “The Wealth of Nations,” Adam Smith argues that the accumulation of “gold and silver” (a financial measure) is not evidence of true wealth. Instead, he posits that a nation’s wealth is really the stream of goods and services that it creates; today we would call this “gross national product (an economic measure).” Smith believes that to maximize gross national product, a nation’s productive capacity should not be restricted but set free. See adamsmith.org/the-wealth-of-nations.

2. healthleadersmedia.com/strategy/healthcare-job-growth-outpacednearly-every-other-sector-2018 3. Statement of Federal Financial Accounting Concepts 1: Objectives of Federal Financial Reporting.

4. stlouisfed.org/open-vault/2019/march/what-is-gdp-why-important 5. investopedia.com/articles/investing/100814/why-10-year-us-treasuryrates-matter.asp The opinions and information contained in this article contain unofficial and personal views expressed by Mr. Savini. Official positions of FASAB are determined only after extensive due process and deliberations.

linkedin.com/in/dominic-savini-27a4a09.

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JANUARY/FEBRUARY 2020

VSCPA

Congrats to the following members NEW HIRES Collin Condron, CPA, and Lisa Schapira, CPA, and have joined the tax staff at Kimble CPA in Richmond.

Thomas Gibbs Jr., CPA, has joined Updegrove, McDaniel, McMullen & Chiccehitto, PLC, in Warrenton, as staff accountant.

Anne Hagen, CPA, has been named CEO of the Masonic Home of Virginia. She replaces Jim Cole, CPA, who is now the sovereign grand commander of the Ancient and Accepted Scottish Rite of the United States, Southern Jurisdiction.

New hires at Homes, Lowry, Horn & Johnson, Ltd., in Fairfax, are Senior Accountants Christopher Light and Andrew Yoo and Staff Accountants Chad Saucier and Julie (Juyoung) Park.

PROMOTIONS Justin Bryan, CPA, and Luke Gore, CPA, have been promoted to partner at Yount, Hyde & Barbour, PC, in Winchester.

Amy Menefee, CPA, CFE, and John Murray, CPA, were named partners at Keiter in Glen Allen.

Allison Parsons, CPA, and Ravann Sowa, CPA, were named principals at Homes, Lowry, Horn & Johnson, Ltd., in Fairfax. Rita (Yun-pei) Liu, CPA, and Janice Ludwick, CPA, were promoted to senior manager and Chris Bond, CPA, to senior.

The following members were promoted to senior tax manager at PBMares, LLP: Ryan Paul, CPA, Rockville, Md., office; Kasey Pittman, CPA, Williamsburg office; and Ashley Summers, CPA, Harrisonburg office.

Shanthi Sundaresan, CPA, has been promoted to tax manager at Steve Walls & Associates, PLLC, in Glen Allen.

FIRM NEWS Halt, Buzas & Powell in Alexandria is celebrating its 50th anniversary.

First row: Jim Cole, CPA, Collin Condron, CPA, Anne Hagen, CPA. Second row: Amy Menefee, CPA, CFE, John Murray, CPA, Allison Parsons, CPA. Third row: Ryan Paul, CPA, Kasey Pittman, CPA, Lisa Schapira, CPA. Bottom row: Ravann Sowa, CPA, Ashley Summers, CPA, Shanthi Sundaresan, CPA.

RyanSharkey in Vienna has merged with Dixon Hughes Goodman LLP.

Brag, please! Send your member news to disclosures@vscpa.com.

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VSCPA

Appointments and awards

Left to right: Joseph Budzynski, CPA, Tyrone Dickerson, CPA, Krystal McCants, CPA, Jill Mitchell, Stephanie Saunders, CPA..

Joseph Budzynski, CPA, executive vice president and CFO of Volunteers of America in Alexandria, was named 2019 Nonprofit CFO of the Year by the CFO Awards.

Three employees of CST Group in Reston were named as Northern Virginia Magazine’s 2019 Top Financial Professionals: Kendall Coleman, CPA, Krystal McCants, CPA, and Joseph Romagnoli, CPA. In November elections, John Copeland, CPA, a sole proprietor in Ruther Glen, was

re-elected to the Caroline County School Board. Jim Holland, CPA, a professor at Virginia Commonwealth University, was also re-elected to the Chesterfield County Board of Supervisors. Mary Leigh McDaniel, CPA, managing partner of Updegrove, McDaniel, McMullen & Chiccehitto, PLC, in Warrenton, won her second term on the Fauquier County Board of Supervisors.

Award from the Accounting & Financial Women’s Alliance.

Stephanie Saunders, CPA, partner at Saunders and Saunders, PC, in Virginia Beach, was elected secretary of the Board of Directors of the National Association of State Boards of Accountancy (NASBA).

Tyrone Dickerson, CPA, a sole proprietor from Richmond, was elected to the NASBA Board as a director at large.

Jill Mitchell, accounting professor at Northern Virginia Community College, received the 2019 Women Who Count

IN MEMORIAM Labib Khaddage, CPA. He owned Khaddage CPA PC in Glen Allen.

Larry Renner, CPA, a VSCPA Life member from Winchester. He was a principal member of Bruce, Renner & Company, PLC, specializing in business valuation and litigation, and was an expert witness.

He was named a Super CPA several times by Virginia Business magazine and previously served on the VSCPA Litigation Services Committee.

OPEN VOLUNTEER OPPORTUNITIES Thanks to all the VSCPA members who have already signed up to volunteer! Visit the Volunteer Manager on Connect to see the full list of current opportunities at connect.vscpa.com/VolunteerOpportunities. We are currently looking to fill: CPAs in the Classroom Chapter leadership Speaking & community engagement Media ambassador

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JANUARY/FEBRUARY 2020

VSCPA

Staff news ANNIVERSARIES

THE VSCPA’S NEWEST VIRGINIA CPA LICENSEES

Jan. 10: Technology Director Jen Syer, 20 years

Courtney Arrington, CPA, Richmond

Pictured clockwise:

Feb. 7: Vice President, Innovation Tina Bates, CAE, 20 years Feb. 17: Vice President, Learning Amy Mawyer, 26 years Feb. 20: Partnership & Event Specialist Veronica Boyett, 2 years

Joseph Barden III, CPA, Powhatan Aleksandra Boitiere, CPA, Richmond Rhiana Brown, CPA, North Chesterfield Patricia Bevans, CPA, Exmore Caitlin Boyles, CPA, Arlington Adam Brachfeld, CPA, Chatham, N.J. Benjamin Buzzard, CPA, Tysons Juvy Flor Chaney, CPA, Burke Kevin Chin, CPA, Tysons

DEPARTURES Peer Review Operations Manager Alan Nicholas has left the VSCPA. Good luck, Alan!

Raizel Cook, CPA, Norfolk Maxwell Danielson, CPA, Norfolk Blaise Fairfax, CPA, Dover, N.J. Elizabeth Farley, CPA, PHR, Marshall Andrew Frantz, CPA, Tysons Maria Fortuno, CPA, McLean Porsche Funches, CPA, Norfolk Gale Gibson, CPA, Foster Lauren Hathaway, CPA, Arlington Jacob Headley, CPA, Sandy Hook Taylor Hutton, CPA, Roanoke

EDUCATIONAL FOUNDATION

Andrew Jones, CPA, Richmond

Helping Create Future CPAs

Rebecca Peele, CPA, Tysons

Dwight Jones, CPA, Glen Allen Adrian Kessel, CPA, Ranson, W.Va. Christopher Moore, CPA, Glen Allen Kelley Nichols, CPA, Tysons Michael Pettinato, CPA, Tysons Christy Pugh, CPA, Check

The generosity of this scholarship has alleviated some of the financial pressures of attending school and has encouraged me to continue working hard toward becoming a CPA.

Richard Sahadeo Jr., CPA, Bowie, Md. Isabell Schmitz, CPA, McLean Russell Swanson, CPA, Richmond John Wimmer, CPA, Richmond Patrick Wunderlich, CPA, Tysons Erin Yeatts, CPA, Richmond

— Valentina Forero, University of Virginia, VSCPA Minority Scholarship

List from October and November.

Compiled Dec. 11, 2019.

Donate Today: VSCPA.com/ef-donation

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VSCPA

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 Membership & Marketing Director Julia Henderson at jhenderson@vscpa.com.

A.F. Thomas & Associates, PC A. Rohm, Smith & Company Actuarial Benefits & Design Company Adams & Co., PC Adams & Delp, PC Anderson & Anderson CPAs, PC Anderson & Reed, LLP Andrews CPA Associates, PC Atlas Financial Barnes, Brock, Cornwell and Painter Beale & Curran, PC Beck & Company, CPAs, PC Bennett, Atkinson & Associates, PC Bishop, Farmer & Co., LLP Black Marlin CPA Boyce, Spady & Moore PLC Britt & Peak, PC, CPAs Bullock & Associates, PC Burdette Smith & Bish, LLC Burgess & Co., PLC CPAs Burnett & Sneed, CPAs, LLC Calderon Abbott PC 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 Cooke, Lavender, Massey & Company, PC Corbin & Company, PC Craver, Green and Company, PLC Creedle, Jones & Associates, PC CST Group, CPAs, PC Dalal & Company David L. Zimmer CPA PC Deloitte Didawick & Company, PC Dixon Hughes Goodman, LLP

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Donald R. Pinkleton, CPA Donald W. Coleman, CPA, Inc., PC Donovan & Wagner, PC DT & Company, PLC DuvallWheeler, LLP Eggleston & Eggleston, PC Elmore, Hupp & Company, PLC Emmons, Hensley & Associates, PLC Ernst & Young Everett O. Winn, CPA, PLC Fritz & Company, PC, CPAs G.L. Roberson CPA, PLLC G4 CPA Firm, Inc. Garland & Garland, CPAs, PC Graham and Poirot, CPA, PC Gregg & Bailey, PC Gregory & Associates, PLLC Hampton & Everett, PC Hantzmon Wiebel LLP Harris, Hardy & Johnstone, PC Harris, Harvey, Neal & Co., LLP Henley & Henley, PC Hogan & Reed, PC, CPAs Holland & Brown LLP Homes, Lowry, Horn & Johnson Honeycutt & McGuire, PC Hortenstine and McCown, CPAs, PC Hottel & Willis, PC Hughes & Basye, PC Jay E. Reiner CPA PLLC John M. Watkins, CPA Jones & Company CPA, LLC Jones & McIntyre, PLLC Jones CPA Group, PC Jones, Madden & Council, PLC J.S. Morlu, LLC Katherine L. Foley CPA, PC Keiter Kelemen & Stephens, PLLC Kimble

JANUARY/FEBRUARY 2020

KPMG Kris McMackin CPA KWC CPAs 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 CPA, LLC Malvin, Riggins & Company, PC Martin, Beachy & Arehart, PLLC McCallum & Kudravetz, PC Meadows Urquhart Acree & Cook, LLP Michael R. Anliker CPA PC Miller Consulting Group, LLC Mitchell, Wiggins & Company, LLP Monfalco Moss & Riggs, PLLC Mulkey & Co., PC Nicholas, Jones & Co., PLC PBMares, LLP Pearson & Co., PC PricewaterhouseCoopers R.P. Willis, PC R.T. McCalpin & Associates, LLC Renner & Company, CPAs, PC Robinson Consulting Group Roger L. Handy PC Rubin, Koehmstedt & Nadler Rumble & Associates, Inc. Russell, Evans & Thompson, PLLC Rutherford & Johnson, PC S.A. Thompson & Associates Salter & Associates, PC Saunders & Saunders, PC Saunders, Matthews & Pfitzner, PLLC Scheulen, Patchett & Edwards, PC Scott Bradshaw & Rawls, PC

Sells Hogg & Associates CPAs, PC Sherman, Spero, Safarino & Co. Spencer, Hager & Mosdell, PC Stephen F. Perry, CPA, PC Stephen Merritt CPA, PC Stephen T. Shickel, CPA, PLC Steve Guy & Associates, PC Steve Walls & Associates, PLLC Stokes Office Solutions Sullivan, Andrews & Taylor PC T.L. Pyne, PC Terry L. Jones, CPA, LLC The Davidson Group, PC The Foley Group, Ltd. Thompson Greenspon Tongelidis Consulting, LLC Updegrove, McDaniel, McMullen & Chiccehitto, PLC Verus Financial Partners W.D. Sanders & Company, PC Wall, Einhorn & Chernitzer, PC WellsColeman White, Withers, Masincup & Cannaday Wilkinson Consulting & CPA PLC William B. May, Jr., CPA, PC Wineholt & Associates, PC Young, Nicholas, Branner & Phillips, LLP Yount, Hyde & Barbour, PC

Compiled Nov. 13, 2019. Check vscpa. com/100Percent for a complete list.

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33

SPOTLIGHT

VSCPA member Benjamin Equitan Jr.

Ben Equitan Jr.

is the director for development and strategy and wealth advisor at Ramiscal Equitan Advisors in Virginia Beach. Born in the Philippines, Ben moved to the United States in 1993, where he worked at one of the Big Four.

In 2017, he transitioned to become a financial advisor, and later joined partner Elmer Ramiscal to form his current firm. Ben and Elmer offer securities and investment products and services through Waddell & Reed, Inc. (WRI), Member FINRA/SIPC. Ramiscal Equitan Advisor is a separate entity from WRI. I am passionate about… The two important responsibilities of a financial advisor: financial education and influencing behavior. The effectivity of how I perform on both drives the magnitude of how I may impact the lives of my clients, their families and the next generation. It’s very fulfilling. It’s about helping individuals and families plan their futures. These all drive my passion.

People don’t know this, but… Life was not easy for me in my teen years in the

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DISCLOSURES

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Philippines. At 16, I was working several menial jobs to pay for my education and living expenses. I put myself through college and became a CPA. I eventually moved to the U.S. where I had to start all over again. During the day I did clerical work, and at night I worked as a convenience store clerk — all while studying and passing the CPA Exam. Eventually, I took the necessary securities examinations to transition to a licensed advisor.

If I weren’t a CPA, I would be… An engineer. Circumstances eventually led me to become an accountant. I thought the most practical career direction would be in accounting. I thought there would always be a need for an accountant, regardless of the type of business organization, profit or nonprofit, government or private.

Another set of circumstances led me to become a financial advisor. I love the job, and my experience in the past as a CPA provides unique qualifications that may be helpful in potentially exceeding client expectations.

My advice to fellow CPAs is… Find your purpose, not your passion. Once you find

JANUARY/FEBRUARY 2020

your purpose, passion comes naturally. It is also critical that you clearly define your vision and articulate your values because your actions each day will be guided by them.

I never leave home without… My smartphone. It has now become a part of my daily life. My calendar, time, appointments, GPS, Google search, language translation, music, streaming, news, weather, movies, to-do list, contact info, reminders, etc. I am as hooked as everyone else and I just can’t do without it!

I wish CPAs knew… That you can be comfortable outside your “comfort” zone.

You may be surprised to find who you really are. It may lead you to your purpose.

When I first took the CPA Exam… They were all done manually. In the Philippines, the examination is broken into 7 parts and taken in 3 ½ days.

I became a CPA because… I love numbers, data and analysis. Analytical skill seems to be natural for me. n

Where do you want to be next tax season?

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