Disclosures: July/August 2020

THE OFFICIAL MAGAZINE OF THE VIRGINIA SOCIETY OF CPAs

JULY/AUGUST 2020

VSCPA.COM/DISCLOSURES

VALUING A BUSINESS IN A POST-PANDEMIC

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9 ways to stand up to racism VSCPA award winners

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CONTENTS

Features 18

Valuing a Business in a Post-Pandemic World Understand the current economic conditions before valuing a business.

24

Handling Competition: Is It Time to Be Innovative?

FIND US...

Columns

WEBSITE vscpa.com

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Regulatory The list of delays is long

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Management Want ethical staff? Model it.

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Diversity 9 ways to stand up to racism

Departments 4

From the CEO

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Line Items

8

Coronavirus

10

Advocacy

28

VSCPA News

37

Educational Foundation

38

Classifieds

CONNECT connect.vscpa.com TWITTER @VSCPANews LINKEDIN tinyurl.com/ LinkedInVSCPA FACEBOOK facebook.com/VSCPA 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 JULY/AUGUST 2020 Volume 33, No. 4 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

Listening and learning After the death of George Floyd

this spring and protests began in earnest around the country, particularly here in Richmond, we at the VSCPA knew we had to have frank discussions about who we are as an organization, where we are as a profession and what we want to be in the future.

That was the genesis of the VSCPA’s Statement on Racial Injustice, released in early June by our new chair, Henry Davis III, CPA and me. You can read the full statement on page 17, but essentially, we commit to take actions to eliminate systemic racism in our communities by increasing dialogue, education and awareness.

Luckily, we had already began efforts to further build on our organizational value of diversity and inclusion. Beginning last year, we instituted a Board of Directors Diversity & Inclusion Task Force to discuss challenges ethnic minorities face in the CPA profession and recommend solutions the VSCPA could take to address those challenges. From that Task Force came a variety of initiatives, but, still, the question remains. Is it enough?

As we confront our unconscious biases, personally and professionally, in our daily work and beyond, the answer is clear that there is always more we can do. I have pledged that, as the CEO of your professional association, I will listen to what you have to say, learn from your experiences and strive to make the profession stronger and more equitable for the generations of accountants to come. At the request of last year’s Board, I signed on to the CEO Action for Diversity & Inclusion pledge, and my commitment to those ideals remains.

We’ve got bright and talented students just waiting in the pipeline to obtain the

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coveted CPA designation, and it’s our duty to open our arms to them as an inclusive, welcoming profession. I’m excited to help you, our diverse group of members and leaders, as we increase dialogue and continue to bring awareness to existing and systemic injustices.

Our Board of Directors is continuing the conversation. The Board is convening a new committee to discuss issues related to diversity, inclusion and equity. Stay tuned throughout the year as we update you on their progress.

We have set up a new email account just to field your questions and thoughts on these issues, diversity@vscpa.com, and you can always contact me directly at speters@vscpa.com. n

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

LINE ITEMS

Virginia expands inclusion — By law On July 1,

Virginia became the first state in the South to enact comprehensive protections for the LGBTQ community against discrimination in housing, employment, public spaces and credit applications. The Virginia Values Act, signed

by Gov. Ralph Northam in April, touches on several areas in private employment.

Make sure your firms, employers and HR professions are current on the latest state non-discrimination laws. A few highlights: • Discrimination based on race or because of race now includes because of or based on traits historically associated with race, including hair texture, hair type and protective hairstyles such as braids, locks and twists.

• Employees have new legal rights and remedies if they sue employers under the Human Rights Act. • Employers may not discharge or take retaliatory action against employees because they discussed or inquired about theirs or another employee’s wages or other compensation. They also cannot take retaliatory action if an employee reports a violation of a state or federal to a supervisor or the government.

This information was presented by Karen S. Elliott, Esq., in “Rethinking the Workplace Because of COVID-19,” during the VSCPA 2020 Virtual Business & Industry Conference. Check out all of our CPE offerings related to HR in the CPE Catalog at vscpa.com.

MORE THAN 1,000 NEW LAWS Highlights from new Virginia laws going into effect July 1: Election Day is a holiday. Lee-Jackson Day is no longer an official state holiday.

The gas tax goes up. The gas tax will increase 5 cents this year and 5 cents next year, and then the rate will be tied to inflation.

Online sports betting is legalized. But not for Virginia-based teams.

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How much do non-filers owe?

A lot.

High-income nonfilers owe the government billions, according to a May report from the Treasury Inspector General for Tax Administration (TIGTA) — and the U.S. Internal Revenue Service (IRS) is letting thousands slide.

Even though the IRS has a new strategic approach to tackle nonfilers, the strategy is not yet implemented and there is not a single area in the IRS responsible for oversight. Data analyzed

by TIGTA from tax years 2014 through 2016 found: •

879,415 high-income nonfilers did not have a satisfied filing requirement, with an estimated tax due of $45.7 billion.

•

Of those nonfilers, the IRS did not work 369,180 high-income nonfilers, with estimated tax due of $20.8 billion.

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510,235 high-income nonfilers with a total estimated tax due of $24.9 billion will likely not be pursued as resources decline.

How can the problem be fixed? TIGTA has seven recommendations, such as designating a senior management official to have resources and jurisdiction over the problem. In response, the IRS disagreed with one of the recommendations, agreed with two and partially agreed with four. Learn more at treasury.gov/tigta.

LINE ITEMS

TICKER $8 TRILLION The reduction to U.S. GDP (3 percent) through fiscal year 2030 because of the coronavirus pandemic, the Congressional Budget Office predicts.

60 The percentage of Americans who believe it is likely they’ll be personally impacted by a natural disaster in the next three to five years.

VSCPA2025:

Driving innovation and vision In 2018, the VSCPA embarked on a bold plan to move the profession toward a successful, vibrant future, as embodied in our mission to empower our members to thrive. The VSCPA2025 strategic framework lays out four bold strategies centered on our aspiration to be the essential, strategic partner for CPAs, their profession and their communities. So, how are we doing? Here’s a check in on one of our bold strategies: Drive Innovation and Vision.

Because technology and change drive our society, including the business environment, CPAs must understand and embrace the latest innovations and cultural changes. Here are just a few ways we’re been rising to this challenge: > The COVID-19 pandemic has made us quickly pivot our offerings to provide the highest member value. We developed innovative ways to deliver the CPE you need remotely, offered resources and info for you on how to handle remote working, recorded videos and podcasts with governmental and professional experts and more. If anything has spurred change in the workplace to be future-forward, it’s the current global climate.

15 The number of Americans who have created a disaster plan to protect their finances.

> Tackling cultural changes head on is part of this strategy through our Center for Innovation. That’s why we didn’t shy away from releasing our Statement on Racial Injustice in June and continue adding info, tools and resources for promoting diversity, equity and inclusion at your own companies.

11 Virginia’s ranking by WalletHub of the least federally dependent states.

Kansas takes No. 1; New Mexico is the most federally dependent.

34 The percentage of public company execs who say their organizations have begun to implement the Financial Accounting Standards Board’s (FASB) cloud computing accounting standard.

55 The percent of execs who say complying with the new standard was only somewhat efficient over the past year, costing more time and money.

> To showcase a workplace of the future for our members, we completed the renovation of the VSCPA Learning & Innovation Center. The old headquarters in Richmond received a massive facelift, with the latest technological advances for learning, working, collaborating and creating.

Stay tuned; we’ll share more soon!

Visit our Center for Innovation at vscpa.com/Innovation for resources, programming and more.

We’re tweeting breaking news Tax-related news from the Virginia General Assembly, professional articles and features, COVID announcements and more … The VSCPA publishes it all to our official Twitter feed. See you in the twittersphere! Make sure you’re following us at...

Twitter.com/VSCPANews

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CORONAVIRUS

Employee safety is No. 1 member concern Ensuring the health and safety of all employees is the No. 1 concern of VSCPA members, according to a May survey of the effects of COVID-19 on the CPA profession.

Here are the top five issues keeping you up night:

INJECTING THE VIRGINIA ECONOMY

GO Virginia funds redirected To address the economic impact

of coronavirus on the Commonwealth, Gov. Ralph Northam restructured funding from the Growth and Opportunity for Virginia (GO Virginia) initiative to the new Economic Resilience and Recovery Program.

The GO Virginia Board approved a policy to implement the Economic Resilience and Recovery Program with up to $14.66 million in GO Virginia funds. Each GO Virginia regional council may apply for up to $1 million to support strategic initiatives in response to the economic conditions caused by the pandemic.

As of press time, four projects had already been approved through the program, including a rapid COVID-19 testing project in the New River Valley and Roanoke health districts and a drone test delivery project. Find more on GO Virginia at dhcd.virginia.gov/gova.

1. Employee health and safety 2. Maintaining work/life balance 3. Losing clients/revenue due to business closures 4. Handling stress related to personal situation and/ or family needs 5. Re-evaluating budget and business plans to ensure long-term stability The survey also revealed that 42 percent of CPA respondents have reduced staff at their physical offices, with most employees telecommuting. So, not surprisingly, members would like guidance for managing a remote workforce on a long-term basis. Other needs include receiving COVID-related accounting and financial reporting updates and guidance on how to advise clients.

The VSCPA Coronavirus Resource Center at vscpa.com/coronavirus is continually updated with info and resources in these areas, as well as CPE opportunities.

CALCULATE LOAN FORGIVENESS A new tool from the American Institute of CPAs (AICPA) helps CPAs and small businesses calculate Paycheck Protection Program (PPP) loan forgiveness. The AICPA is updating the calculator as new information and guidance becomes available from the U.S. Small Business Administration and U.S. Treasury Department. You can find the calculator (an Excel download) and other resources in the PPP section of the VSCPA Coronavirus Resource Center at vscpa.com/coronavirus.

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CORONAVIRUS

Fraud during COVID: significant Fraud experts, the U.S. Internal Revenue Service (IRS) and the Government Accountability Office (GAO) are sounding the alarm about fraud in a post-pandemic world.

The first in a series of benchmarking reports from the Association of Certified Fraud Examiners (ACFE) reveals that CFEs are seeing an increase in a variety of fraud types in the wake of the pandemic. As of May, 68 percent of survey respondents had experienced or observed in increase in fraud levels, and one quarter believe the increase to be significant. Almost all (93 percent) foresee more increases through May 2021.

Unsurprisingly, cyberfraud tops the list, with respondents citing business email compromise, hacking, ransomware and malware. The next most popular frauds are those by vendors and sellers (price gouging, product misrepresentation, overbilling, etc.), payment fraud and health care fraud.

The IRS also reminded taxpayers to guard against tax fraud and other related financial schemes related to COVID-19. Since the pandemic began, the IRS Criminal Investigation Division saw a variety of Economic Impact Payment scams, such as stealing the payments or using them as cover to steal personal information.

Other schemes include selling fake COVID test kits or treatments, medical supplies and more. Taxpayers could also be duped by fake charities soliciting donations for

individuals and groups suffering from the disease.

And a new 400page GAO report reveals a high fraud risk related to the rapid rollout of the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The GAO cites limited lender review as part of the problem.

It recommends the U.S. Small Busienss Administration develop and implement plans to identify and mitigate risks.

Find more fraud stats from the ACFE in “Fraud in the Wake of COVID-19: Benchmarking Report” at acfe.com/covidreport. And any COVID-19 scams can be submitted online to the National Center for Disaster Fraud at justice.gov/disaster-fraud/ ncdf-disaster-complaint-form.

TAKE ACTION AGAINST CYBERTHREATS The pandemic has made data security an even more urgent concern for the profession. Working remotely to such an extreme has opened new potential access points and vulnerabilities hackers can exploit. CPA firms are already prime targets for identity thieves, and these new vulnerabilities can exacerbate the profession's cyber-related challenges. Clever hackers have many ways of exploiting accountants facing tax filing deadlines, especially when firms have outdated software, vulnerable email systems or inattentive employees. As the sophistication of hackers and other cyber criminals increases, so do the types of threats and the number and scope of data breaches. There are ways you can take action NOW. Check out this list from VSCPA preferred provider CAMICO on things you can do, from maintaining work-from-home “cyber hygiene” to powering down. Find the alert at

camico.com/blog/fraudulent-tax-return-filings-other-cyber-threats.

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ADVOCACY

Coronavirus-related advocacy continues

As rules and regulations

emerge for addressing the coronavirus pandemic and business reopening, the VSCPA continues to monitor legislative and regulatory developments as well as advocate for issues important to CPAs across the state. We’re also watching best practices from CPA societies around the country.

Here’s a snapshot of our most recent efforts.

between VSCPA President & CEO Stephanie Peters, CAE, and Virginia Deputy Secretary of Commerce & Trade Cassidy Rasnick on Virginia’s Phase II reopening, give you quick tips on pressing issues. You can watch the video replays anytime at facebook.com/vscpa.

ENHANCED COMMUNICATIONS

The VSCPA Advocacy Team stays connected to the Virginia Secretary of Finance and Virginia Board of Accountancy with meetings every other week. The Society also continues to lobby at the federal level on issues to protect the profession, including talking with Sen. Tim Kaine’s office about CPA priorities surrounding the Coronavirus Aid, Relief and Economic Security Act and Paycheck Protection Program. Hot topics include agent fees and loan forgiveness.

To ensure you receive the news you need during the pandemic, we began sending a weekly email update containing COVID-related news to all members.

Updates have included breaking news as well as resources and educational opportunities on remote working and leading, Virginia reopening guidance and more.

We also started a biweekly town hall series broadcasted live on the VSCPA Facebook page.

These 30-minute conversations, such as an interview

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CONTINUING CONVERSATIONS

POSITIONS AND LETTERS > Withdrawing IRS Notice 2020-32: We

ADVOCACY

joined other state societies to urge U.S. senators to support the withdrawal of IRS Notice 2020-32, which states that no tax deduction will be allowed for listed business expenses paid using funds from forgiven PPP loans. > Supporting “The Small Business Expenses Protection Act” (S.3612): Along with the American Institute of CPAs (AICPA), we pushed for U.S. senators to support this bill to clarify the deductibility of PPP-funded expenses. > Impact of tax penalty relief on pass-through entity withholding: The VSCPA Tax Advisory Committee sent a letter to Virginia’s Tax Commissioner Craig M. Burns to request that penalty relief be granted for nonresident withholding payments on pass-through entities (PTEs) that were due April 15. We heard from several members who relied on the guidance in Tax Bulletin 20-4, which did not

clearly specify that nonresident withholding tax payments reported on Form 502 were not eligible for the payment extension to June 1. This was later clarified in Tax Bulletin 20-5, issued on April 27, which was after the April 15 payment deadline, making no recourse available. > Fiscal State of the Nation Resolution: We asked Virginia Sens. Tim Kaine and Mark Warner to co-sponsor the Fiscal State of the Nation Resolution, which would provide members of Congress and the American people an annual update on the long-term financial health of the United States.

What issues are you seeing in your daily practice as a CPA? We want to hear from you. Email VSCPA Public Affairs Director Tim Barry at tbarry@vscpa.com with any questions or feedback. n

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ADVOCACY

Virginia Board of Accountancy news At its meeting on May 21, 2020, the Virginia Board of Accountancy (VBOA) acted on several items of interest to CPAs and CPA firms.

CPA EXAM In response to the COVID-19 testing center closures and reduced capacity, the VBOA joined with most other U.S. accounting jurisdictions by voting to extend all Notices to Schedule and Exam credits expiring from April 1 to Dec. 30, 2020, until Dec. 31, 2020.

OFFICER UPDATES The VBOA also elected its officers for the July 1, 2020 – June 30, 2021, fiscal year. Brian Carson, CPA, of Gold Key/PHR Hotels & Resorts in Virginia Beach, will again serve as chair.

Laurie Warwick, CPA, of Ernst & Young in McLean, was elected to continue as vice chair and was reappointed by Gov. Ralph Northam for her second term. Northam also appointed Wendy Lewis, CPA, partner at KPMG in McLean, to her first term.

CHANGES TO THE VIRGINIA-SPECIFIC ETHICS COURSE IN 2021 The VBOA also voted with the intent to approve more options for the Virginia-Specific Ethics Course beginning with the 2021 course.

ETHICS COURSE COMPARISON CURRENT

BEGINNING IN 2021

Amount of ethics CPE annually

At least 2 hours

At least 2 hours

Sponsor and course approved by VBOA

Yes

Yes

Content requirement

Same course for all

Required content must be included, remaining content can vary

VBOA-appointed Ethics Committee

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Yes

Yes

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The two-hour annual requirement will remain the same for all Virginia CPAs. All licensees (excluding those approved for the Inactive status) will still need to complete a VBOAapproved ethics course annually that complies with VBOA regulation 18VAC5-22-90.

Currently, there is only one Virginia-Specific Ethics Course offered each year and all CPAs are required to take the same course.

Beginning in 2021, the VBOA intends to approve a variety of different ethics courses that will provide options for CPAs to take about different areas and topics.

The VBOA will also continue to approve all sponsors and courses ahead of time and it will be the CPA’s responsibility to choose an ethics course from a VBOA-approved sponsor. All VBOA-approved ethics course sponsors are listed on the VBOA website.

Please note that the 2020 requirement remains as is and all Virginia CPAs must take the one approved Virginia-Specific Ethics Course from an approved provider. n

HIGH-QUALITY ETHICS FROM THE VSCPA The VSCPA will continue to offer high-quality courses that you can depend on to meet this requirement.

We will have a slate of new ethics courses that meet the VBOA requirement available in early 2021.

More information about the 2021 changes to the Virginia-Specific Ethics Course will be available later this year from the VBOA. And watch for information from the VSCPA on our exciting new ethics offerings when it becomes available!

Visit VSCPA.com/ethics for the upcoming VSCPA 2020 course schedule!

REGULATORY

The list of delays is long When will updated standards and regs take effect? It will be a slower rollout for many agencies.

To say the pandemic

has had an impact on the effective dates of various rules and regulations would be an understatement.

Here are few of the delays and changes (though this list is not completely exhaustive), not including tax due date extensions, from a few boards and government agencies.

AICPA Auditing Standards Board (ASB) Statement on Auditing Standards (SAS) No. 141, issued May 1, amends the effective dates of SAS Nos. 134–140. They are now generally effective for audits of calendar year-end 2021 financial statements. But, if firms want to proceed sooner, they may: SAS. No. 141 lifts the prohibition against early implementation. The ASB recommends Nos. 134–140 be implemented concurrently.

AICPA Peer Review Board CPA firms have been granted six-month extensions for peer reviews, corrective actions and implementation plans with original due dates between Jan. 1 and Sept. 30, 2020. Despite the automatic extension, firms are still encouraged to have their reviews performed as soon as they are able. Find more information at vscpa.com/peer-review.

AICPA Professional Ethics Executive Committee (PEEC) PEEC extended the effective dates of the three interpretations to the AICPA Code of Professional Conduct by one year: • Information Systems Services (ET §1.295.145): Effective on Jan. 1, 2022, with early implementation permitted.

• State and Local Government Client Affiliates (ET §1.224.020): Effective for years beginning after Dec. 15, 2021.

• Leases (ET §1.260.040): Effective for fiscal years beginning after Dec. 15, 2020, with early implementation permitted.

PEEC also issued an exposure draft addressing record requests and updates to the interpretation regarding acts discreditable.

Comments are due on the draft by Sept. 30, 2020.

Financial Accounting Standards Board (FASB) FASB has extended by one year the effective date of its standards update, Revenue from Contracts with Customers (Topic 606), for non-public entities. Entities are given the choice to adopt on the original timeline or deferring. The effective date for Leases (Topic 842) was amended for private companies and nonprofits, to fiscal

years beginning after Dec. 15, 2021, and interim periods within fiscal years beginning after Dec. 15, 2022; early implementation is also permitted.

Governmental Accounting Standards Board (GASB) Statement No. 95 from GASB postpones the effective dates of several statements and implementation guides, including Statement No. 87, Leases, and the leases implementation guide, which have been postponed by 18 months. Visit gasb.org for a list of all delays.

Office of Management and Budget OMB) To relieve short-term administration, financial management and audit requirements, the OMB released two memorandums in March for those impacted by the pandemic and receiving COVID-19 funding as well as those who were impacted operationally. The guidance addresses flexibility with System for Award Management (SAM) registration and recertification and expenditure of funds by awarding agencies as well as provides delays for single audit deadlines. Those receiving COVID-19 funding have an extra 12 months to submit their single audits, while those impacted operationally will have an extra six months.

U.S. Government Accountabiliy Office (GAO) The GAO provided exceptions for circumstances related to the pandemic for CPE requirements for auditors as outlined in generally accepted government auditing standards (GAGAS, i.e.

Yellow Book). This includes a six-month grace period to complete CPE. More details are available in the “COVID-19: GAGAS CPE Alert” at gao.gov. n

from the expert...

“Due to the delay in effective dates of major standards, companies and nonprofits will have some breathing room this year. It will be important to use this time wisely. Once entities have recovered from COVID-19, it will be important to start work on some of the larger standards that take time to implement.

These delays will allow for a less frustrating implementation process if used effectively. “ — Melisa Galasso, CPA, founder & CEO, Galasso Learning Solutions

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MANAGEMENT

WANT ETHICAL staff? BE THE MODEL. Ethical character leads to positive outcomes, both in person and on social media.

Karen Helderman, CPA

Integrity is synonymous

with honesty, reliability and honor. C.S. Lewis summed up the definition of integrity best in his famous quote, “Integrity is doing the right thing, even when no one is watching.” As CPAs, we know the public is always watching and expects us to act with integrity and choose a path of honesty, respect and professionalism. Your integrity really comes to life and is tested as you go about your daily routine and make important choices.

Those of us in leadership positions have additional responsibilities when it comes to integrity. Not only must we set an example and exhibit ethical behavior, we are on the front line, promoting a culture where our employees want to act with integrity and feel comfortable asking questions and voicing concerns.

What can you do to create this type of culture? Some ideas include:

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• Engage with your staff by asking questions and truly listening to their responses. Show you are listening by repeating what you have heard and, when appropriate, follow up the discussion with an email.

• Reward staff who demonstrate ethical behavior. Recognize and reward employees who gain accomplishments ethically or put the interest of others above their own. This signals to other employees that ethical behavior is important to your organization.

• Give your staff credit for their ideas.

Public acknowledgement that an employee recommended an idea that elicited positive change not only gives the employee a sense of pride, but also sets an example for others to follow.

MANAGEMENT

• Include goals that staff can measure and reasonably achieve when giving feedback. Reasonable goals take away the guesswork about your expectations and let your staff know that they can achieve them while acting with integrity.

As a manager or supervisor, your behavior has a direct impact in reducing your company’s ethics and compliance risk, resulting in positive outcomes. Your employees study how you behave and they notice if your words and actions do not align. They also notice if you tend to blame others when things go wrong, lie or falsify reports or if you fail to keep your word. When an employee perceives their leader as unethical or lacking integrity, they, in turn, feel less engaged, care less about following policies and procedures and are more likely to fear retaliation if they speak up.

According to a National Business Ethics Survey published by the Ethics Resource Center, direct managers are the most influential individuals in setting the ethical tone for employees. For this reason, it is important that as a manager, you understand this influence and ensure your actions inspire your employees to do the right thing. You can promote ethics and integrity by telling your employees to do the right thing, but your employees receive most of their inspiration by actually observing you acting in a positive, ethical way. Sustaining your positive, ethical character can be particularly challenging in today’s environment — where social media provides a means for employees to also easily observe and judge your character outside of work.

Certainly social media has positive effects, by allowing each of us to build meaningful connections with friends, families and coworkers, and to share important events, photographs, opinions and information. But sometimes it can be difficult for us to separate our professional and personal lives. As a CPA and manager, you must be mindful of how your online presence affects how your staff, boss and potential clients judge your ethical character.

It is likely your company has no policies regarding social media presence, because they understand that we all enjoy our First Amendment right to freedom of speech. And after all, you should not need a company policy to dictate how to make good, conscious choices about your posts in an effort to protect your personal reputation. One good rule to follow is to think before you post. Consider and reflect on how your social media posts may affect how others perceive your personal integrity and contemplate if the post is really worth the damage it may do.

Here are a few simple ideas to consider if you want to maintain a social media presence that demonstrates strong integrity.

1. Avoid posting negative stories about work. In fact, consider not posting about your work at all. If you do, focus on positive remarks about the successes of your company.

2. Be sensitive to cultural and political differences and avoid unnecessary posts that others may find offensive.

3. If you have a concern about work, think twice before posting about it on social media where it can only do harm. Instead, discuss the concern with your supervisor or human resources since these individuals can actually investigate and address the matter.

4. Only post accurate and true information. Individuals may rely on your information, and if it is not accurate, you may get a reputation for spreading false stories that will only harm your personal integrity.

5. Consider whether social media is the right platform for your comments. Be respectful of others’ feelings by discussing personal matters face-to-face or by phone, rather than a public forum.

Even if you are not a manager or in a position that influences the personal integrity of others, you, as a CPA, should be sensitive to the impact your behavior and actions has on the CPA profession, your firm or company brand and potential clients or employers that you may wish to serve in the future. You have worked hard to earn your CPA distinction and it is important to remember that given a choice, most individuals would hire and recommend a CPA known for having strong personal integrity — someone they can trust to do the right thing, exercise restraint, model good judgment and influence others to do the same. n

Karen Kyte Helderman, CPA, CISA, PMP, is the executive director of audit and compliance services at Virginia Commonwealth University. She has extensive experience directing financial, compliance and performance audits of state agencies and universities throughout the Commonwealth and is a member of the Disclosures Editorial Task Force. heldermank@vcu.edu linkedin.com/in/KarenHelderman

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DIVERSITY

9 WAYS TO stand

up

TO RACISM

CPA firms and companies can be diverse and inclusive environments, and we can confront racism and unconscious bias head on.

The events over the last few months

related to race have reminded us all: Diversity matters.

What we say and do at work matters. So how do we change? How do we become the leaders and co-workers we want to be? How can we shape our firms and companies so they reflect a diverse and tolerant society? Here’s what we’re doing to start the conversation and how you can, too.

1. Make your position clear.

If you lead a company and haven’t made a case against injustice, it’s never too late. See the VSCPA’s statement (at right) from VSCPA Chair Henry Davis III, CPA, and VSCPA President & CEO Stephanie Peters, CAE. 2. Take a pledge.

Last year, the VSCPA Board asked Stephanie Peters to sign on to the CEO Action for Diversity & Inclusion pledge, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace. You can, too. Find more at ceoaction.com.

3. Embed diversity into company values.

The VSCPA has made diversity and inclusion a core value of organizational culture, demonstrating that the Society aims to foster a collaborative environment that reflects diverse people, cultures

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and perspectives. Project Include at projectinclude.com has sample D&I policies.

4. Confront your biases.

Both the VSCPA Board of Directors and VSCPA staff have undergone unconscious bias training in the past year and we’ve held member webinars and conference sessions on the topic. Many groups offer training and speakers, and you can check out the Virginia Center for Inclusive Communities at inclusiveva.org. The Harvard Implicit Bias test is free and also a way for you to see where your biases stand now.

5. Have hard conversations.

Confronting your biases (see above) and taking training can help you be more comfortable tackling difficult conversations about race, equity and more.

Do colleagues with a disability feel welcomed at work? Do LGBTQ co-workers feel like there’s a culture of inclusion? Ask questions and begin the conversations. Firms and companies can also regularly survey their workforce to see if they are making headway.

6. Start task forces and volunteer groups.

Last year the VSCPA formed a special Diversity & Inclusion Task Force on the Board of Directors to discuss challenges underrepresented minorities

DIVERSITY

face in the CPA profession, recommend actions to advance our efforts and ask: What can we do better? Several initiatives came out of the task force, including increasing our collaboration with the National Association of Black Accountants (NABA) and the new Ruth Coles Harris Advancing Diversity & Inclusion Award (meet this year’s winner on page 31).

7. Educate yourself and your staff.

The VSCPA has educational opportunities and webinars tackling tough topics. Visit our Diversity, Equity & Inclusion Resource Center at vscpa.com/diversity to access links to articles, toolkits, assessments, seminars, an unconscious bias members-only webinar recording and more.

8. Learn from the experts.

There are a variety of excellent articles and resources available for you to get the conversation started at work.

Former American Institute of CPAs (AICPA) Chair Kimberly Ellison-Taylor, CPA, drafted a plan: “Together, We Can Make a Difference: A 12-Step Plan to Address Racism and Unconscious Bias.” Find it at vscpa.com/diversity. The CEO Action for Diversity & Inclusion site, ceoaction.com, has resources, including an article on what PWC is doing to stand up against racism.

9. Encourage minority students to pursue accounting careers.

Changing the makeup of the CPA profession starts at the beginning. The VSCPA Educational Foundation offers the VSCPA Minority Scholarship, which you can contribute to as well as promote to your network. Our CPA Ready Workshops encourage entry into the profession. And you can get involved, too, by participating in our CPAs in the Classroom program.

Email VSCPA Academic Relations Director Molly Wash at mwash@vscpa.com for more information. n

RESOURCES & MORE Find links to the sites mentioned above in the VSCPA Diversity, Equity & Inclusion Resource Center at vscpa.com/diversity. We welcome your thoughts on how we can improve the profession and bring our communities together. Send feedback anytime to diversity@vscpa.com.

VSCPA STATEMENT ON RACIAL INJUSTICE In light of recent tragic events that have affected the African-American community, the VSCPA firmly supports those who are advocating for change in the justice and economic systems in America. It is clear that in the past these systems have worked for some people — but not all people. We believe that injustice for any race can never be tolerated.

The VSCPA strongly values and reflects a diversity of people, cultures and perspectives, and we are committed to taking actions to eliminate systemic racism in our communities by increasing dialogue, education and awareness. Please look for information from us in the coming weeks on our action plan and resources prioritizing diversity, inclusion and equity; incorporating these resources more fully in our strategic plan; and creating facilitated stakeholder discussions so that we may all learn, grow and heal together.

We appreciate all you do as CPAs to listen, learn and work with others to be part of the solution. We welcome your input and thoughts on how we can improve our profession and bring communities together. We strongly encourage you to send comments to diversity@vscpa.com. We want to hear what you are thinking and feeling, and what we can do as we continue learning.

Henry Davis III, CPA Stephanie Peters, CAE VSCPA Chair of the Board VSCPA President & CEO

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‘IT’S LIKE DÉJÀ VU ALL OVER AGAIN’

VALUING A BUSINESS IN A POSTPANDEMIC

world: PART 1

COVID-19 has had a significant impact on current economic and industry conditions, as well as governmental regulations. As a result, depending on the effective valuation date, COVID-19 may have significant implications for business valuation analysis and required disclosures in a valuation report.

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VALUATION

How do we value a business in a post-pandemic

Harold G. Martin Jr., CPA/ABV/CFF, ASA, CFE

world? How can we develop credible financial forecasts given the uncertainties of the pandemic on the economy and certain industries, as well as the potential depth and duration of the resulting economic recession? These concerns are particularly vexing to many young valuation professionals who have seen a 10-year bull market and have never experienced an economic recession. However, those of you with gray hair realize that we’ve been through periods of uncertainty before, including the 2008–2009 financial crisis, the 2000 dotcom crash and other similar events (see Exhibit 1 below).

The malapropism attributed to Yogi Berra, the former manager of the New York Yankees and Baseball Hall of Famer, expresses my take on this: “It’s like déjà vu all over again.” While certain forces that resulted in the

current economic environment are different from those of 2008–2009, there are many similar issues that we have seen before. Somehow, despite the uncertainty, we were able to develop reasonable and credible estimates of value then and we can do so now. Part I of this article presents a summary of key factors a valuation analyst should consider when valuing a business currently affected by COVID-19. In Part 2, I will present guidance in selecting and applying the appropriate valuation approaches and methodologies.

COVID’S IMPACT ON THE ECONOMY The economic impact of COVID-19 can best be illustrated by its effect on the U.S. stock market and Gross Domestic Product. “COVID-19 – A timeline of significant events, including the pandemic’s effect on the U.S. stock market,” prepared by Valuation u

EXHIBIT 1: U.S. MARKET CRASHES, USING S&P 500 PRICE INDEX AS THE BENCHMARK 1929 Crash Start Date of the Decline S&P 500 End Date of the Decline S&P 500 Decline Recovery Date S&P 500 Years to Recover

Sept. 19, 1929 31.86 June 1, 1932 4.40 -86.2% Sept. 22, 1954 32.00 25.02

2008 Crash Start Date of the Decline S&P 500 End Date of the Decline

Start Date of the Decline S&P 500 End Date of the Decline S&P 500 Decline Recovery Date S&P 500 Years to Recover

Oct. 9, 2007 1,565.15 Mar. 9, 2009

Start Date of the Decline S&P 500 End Date of the Decline

S&P 500

676.53

S&P 500

-56.8%

Decline

S&P 500 Years to Recover

Aug. 25, 1987 336.77 Oct. 19, 1987

Start Date of the Decline S&P 500

Mar. 24, 2000 1,527.46

End Date of the Decline

Oct. 9, 2002

224.84

S&P 500

776.76

-33.2%

Decline

-49.1%

July 26, 1989 338.05 1.92

Recovery Date S&P 500

May 30, 2007 1,530.23

Years to Recover

1.92

COVID-19 Crash

Decline Recovery Date

Dotcom Crash

1987 Crash

Mar. 28, 2013 1,569.19 5.47

Recovery Date S&P 500 Years to Recover

Feb. 19 2020 3,386.15 Mar. 23, 2020 2,237.40 -33.9% ? ? ?

Source: “Coronavirus: Cost of Capital Considerations in the Current Environment,” by Carla S. Nunes and James P. Harrington, Duff & Phelps, April 16, 2020.

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Products and Services, indicates that on Jan. 16, 2020, the Russell 2000 hit a high of 1,705; on Feb. 12, 2020, the Dow Jones Industrial Average (“DJIA”) hit a record high of 29,551; and on Feb. 19, 2020, the S&P 500 hit a record high of 3,386. Four days later, Italy experienced a surge in cases and proceeded to lock down towns. The very next day, on Feb. 24, the DJIA dropped 1,000 points, its most significant decline in two years. All three indices continued to decline significantly thereafter. On March 18, 2020, the Russell 2000 declined to 991, a 40.6 percent decline from the price at Dec. 31, 2019. On March 23, both the DJIA and S&P declined to year-to-date lows with the DJIA dropping to 18,592, a 34.9 percent decline, and the S&P dropping to a low 2,237, a 30.7 percent decline (see Exhibit 2 below).

COVID-19 has had a significant adverse impact on projections of real U.S. GDP. Prior to the pandemic, Duff & Phelps estimated projected growth in real GDP of 1.9 percent in both 2020 and 2021. Subsequent to COVID-19, estimated real GDP was expected to decline by 5 percent to -3.1 percent in 2020 and then rebound to 3.8 percent in 2021.

Exhibit 2 EXHIBIT 2: DJIA, S&P 500 AND DJIA, S&P 500, and Russell 2000 YTD 2020 Indices2000 YTD 2020 INDICES RUSSELL 4,000.00

February 12, 2020 DJIA Hits Record High

3,500.00

February 24, 2020 DJIA Declines

In an effort to reduce the adverse impact of COVID-19 and shore up the U.S. economy, on March 27, 2020, Congress enacted The Coronavirus Aid, Relief, and Economic Security (CARES) Act, H.R. 748. The CARES Act resulted in a fiscal stimulus to the U.S. economy — an unprecedented amount equivalent to 10.8 percent of GDP. The Act also resulted in the United States incurring its highest budgetary deficit as a percentage of GDP since WWII. Based on data from Moody’s Analytics, Duff & Phelps also prepared revised estimates of post-COVID-19 U.S. real GDP that reflects the impact of the CARES Act. Moody’s projects that the CARES Act will result in reducing the loss in real GDP from -4.83 percent to -2.17 percent in 2020. However, in 2021, real GDP is expected to decline from 4.91 percent to 2.68 percent.1 The adverse impact of the COVID-19 pandemic on the U.S. economy has resulted in a devastating effect on the U.S. workforce as statewide lockdowns and stay-at-home orders have resulted in many businesses terminating employees in an effort to avoid permanent closure. Approximately 36.5 million workers have sought unemployment benefits during the pandemic. As of April 2020, the U.S. Department of Labor reported the unemployment rate at a historic 14.7 percent. The job losses resulting from COVID-19 are approximately double those experienced during the financial 35,000.00 crisis between 2007 and 2009.2 30,000.00

3,000.00 25,000.00 2,500.00 20,000.00

March 23, 2020 DJIA and S&P 500 Decline to YTD Lows

2,000.00

Russell 2000 SP 500 15,000.00

1,500.00 10,000.00 1,000.00

5,000.00

500.00

12/31/2019

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4/30/2020

-

DJIA

The timing of the events and the selected stock market and economic data presented above are relevant for purposes of determining when the impact of COVID-19 should be considered for valuation purposes, as well for assessing its impact on business viability and projected growth.

THE VALUATION DATE, REPORTING DATE AND REQUIRED DISCLOSURES One of the key questions which must be answered when valuing a business is whether the effect of COVID-19 should be considered and/or disclosed in the valuation report. The answer depends on the effective valuation date, what was known or knowable as of the valuation date and the report

VALUATION

issue date. IRS Rev. Rul. 59-60 states that a valuation must be based on the facts available at the valuation date: Valuation of securities is, in essence, a prophesy as to the future and must be based on facts available at the required date of appraisal.

AICPA Statement on Standards for Valuation Services No. 1 (SSVS) reiterates this guidance: Generally, the valuation analyst should consider only circumstances existing at the valuation date and events occurring up to the valuation date.

SSVS further indicates that when an event occurs subsequent to the valuation date, the valuation should not be updated to reflect that event. However, if the event is significant, then the appraiser may elect to make disclosure of the event for informational purposes only: An event that could affect the value may occur subsequent to the valuation date; such an occurrence is referred to as a subsequent event. Subsequent events are indicative of conditions that were not known or knowable at the valuation date, including conditions that arose subsequent to the valuation date. The valuation would not be updated to reflect those events or conditions. Moreover, the valuation report would typically not include a discussion of those events or conditions because a valuation is performed as of a point in time— the valuation date — and the events described in this subparagraph, occurring subsequent to that date, are not relevant to the value determined as of that date. In situations in which a valuation is meaningful to the intended user beyond the valuation date, the events may be of such nature and significance as to warrant disclosure (at the option of the valuation analyst) in a separate section of the report in order to keep users informed (paragraphs 52(p), 71(r), and 74). Such disclosure should clearly indicate that information regarding the events is provided for informational purposes only and does not affect the determination of value as of the specified valuation date.

Using the known or knowable standard and given the implications of the COVID-19 timeline discussed above, and assuming the company being valued is conducting its business in the United States, in my opinion (as well as that of James R. Hitchner, the editor of Financial Valuation and Litigation Expert and author of the aforementioned COVID-19 timeline), the adverse impact of COVID-19 on the U.S. market was known as of Feb. 24, 2020 — the date the DJIA experienced a significant decline based on investor fears that the virus would weaken the U.S. economy.

Further, the potential risk that COVID-19 could result in additional adverse effects on the market as of this date was also reasonably knowable.

For example, while most statewide lockdowns and stay-at-home orders did not begin in the U.S. until early March, such actions were reasonably foreseeable given how other countries (e.g., China and Italy) had been required to implement similar programs in an effort to contain the spread of the virus. Consequently, for valuations with an effective date prior to Feb. 24, 2020, the adverse impact of COVID-19 would be considered a subsequent event and, therefore, it should not be considered in developing an estimate of value. However, for valuations with an effective date on or after Feb. 24, 2020, the impact of COVID-19 should be considered in developing an estimate of value.

With respect to whether COVID-19 should be disclosed in a report, if the valuation date is before Feb. 24, 2020, and the report date is on or after this date, then the decision of disclosure is subject to the professional judgment of the appraiser. Alternatively, if the valuation date is on or after Feb. 24, 2020, then there is no issue — the event was clearly known or knowable and should be disclosed in the report. To assist valuation analysts with interpreting the SSVS subsequent event standard, the AICPA SSVS Task Force (comprising James Hitchner, James Alerding, Edward Dupke, Heather Tullar, William Strain and Mark Smith) has published the “AICPA Subsequent Event Toolkit,” available at aicpa.org.

PURPOSE OF THE VALUATION Depending on the purpose of the valuation, consideration of COVID-19 may influence the selection of the valuation date.

For example, for estate tax purposes, the estate has the option of selecting either the date of death or an alternative date of six months following this date as the effective valuation date.

Consequently, assuming that the date of death was within six months of the estimated date that COVID-19 impacted the market (i.e., Feb. 24, 2020), and assuming the impact was adverse, then the estate may wish to elect the alternative date as the effective valuation date in an effort to minimize the estate tax.

Similarly, for gift taxes, assuming the impact of COVID-19 was adverse on the value of a business, then, all else being equal, an effective valuation date subsequent to COVID-19 would result in reducing gift taxes.3 (The uncertainty resulting from a potential change in controlling political parties in the upcoming November elections also makes this an opportune time to make gift transactions). There are numerous other examples where the purpose of the valuation and consideration of COVID-19 may u

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be relevant, including divorce (e.g., the propertied spouse may argue for a post-COVID-19 date in an effort to reduce value, whereas the non-propertied spouse may argue for pre-COVID-19 date in an effort to increase value), insurance claims (e.g., assessing whether the impact of COVID-19 resulted in a business interruption), etc.4

PREMISE OF VALUE Given the potential significant adverse implications of COVID-19 on many types of businesses, there is also the question as to whether certain of these will be able to survive. This will require analysts to carefully consider whether a business should be valued as a viable going concern or, alternatively, under a liquidation scenario. For example, even in the best of times, restaurants are probably one of the riskiest businesses. Mandatory government restrictions precluding restaurants from on-premises dining will probably result in the permanent closure of many establishments.

STANDARD OF VALUE Consideration of COVID-19 will also be relevant for purposes of applying the selected standard of value. For example, fair market value is defined in Rev. Rul. 59-60 as: The price at which the property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts. Court decisions frequently state in addition that the hypothetical buyer and seller are assumed to be able, as well as willing, to trade and to be well informed about the property and concerning the market for such property.

Under this definition, the valuation analyst must consider what a hypothetical willing buyer would be willing to pay, as well as what the hypothetical willing selling would be willing to accept, in estimating the value of the business given the impact of COVID-19. In other words, the increased risk resulting from COVID-19 which is being transferred from the seller and assumed by the buyer becomes a key factor in estimating the value of the hypothetical transaction.

ANALYSIS OF ECONOMIC AND INDUSTRY CONDITIONS AND GOVERNMENT REGULATIONS In performing the valuation analysis, a key task is the analysis of the current and expected economic and industry conditions known or knowable as of the effective valuation date. The impact

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of COVID-19 on the local, regional and national economic and industry conditions, state and local government regulations resulting in lockdowns and stay-at-home orders, as well as the federal stimulus resulting from the CARES Act should be considered.

A key consideration will be the expected depth and duration of the economic recession triggered by COVID-19, as well as the time required for recovery. In recent recessionary periods, the decline and recovery have been characterized by a “V” shape with a rapid decline followed by relatively quick recovery. However, in this instance, some corporate executives are projecting differing scenarios. For example, some project that the decline and recovery will be a “swoosh” shape with a large decline followed by a slow recovery. Still other analysts are projecting a “W” or wave shape with an initial recessionary period followed by a brief recovery as businesses reopen, but then another downturn triggered by a second wave of COVID-19-related illnesses resulting from local and state governments relaxing mandatory stay-at-home requirements and eliminating social distancing followed by another recovery.5 With respect to the impact on a particular industry, COVID-19 may adversely affect certain industries while benefiting others.

For example, those companies in industries that are dependent upon discretionary spending and/or impacted by state and local lockdowns and statewide stay-at-home orders such as local restaurants and bars, hotels and tourism (Marriott), entertainment (Major League Baseball), airlines (American Airlines) and cruise travel (Carnival Cruise Line) are subject to relatively higher risk in terms of both viability and growth prospects. Conversely, as consumers seek alternative sources of goods and services, COVID-19 may actually result in a positive outlook for other industries such as online marketplaces (Amazon) and food delivery services (Instacart). Other companies that are directly involved in producing products to counter COVID-19 such as medical supply companies producing the N95 masks (3M) and biotech companies producing vaccines (Moderna) may also benefit.

ANALYSIS OF FINANCIAL AND OPERATIONAL CHARACTERISTICS OF THE SUBJECT COMPANY Analysis of a business’ financial and operational characteristics is important for purposes of assessing trends and anomalies in historical operating performance, as well as in helping to identify required normalization adjustments for purposes of determining the “true” economic performance of the business. This information will also serve as a baseline for purposes of assessing whether the business has sufficient financial resources to survive the current adverse conditions, recover and rebuild.

VALUATION

GET MORE IN DEPTH WATCH THE COMPANION SEMINAR: "'It's Like Deja Vu All Over Again' — Valuing a Business in the Post-COVID-19 Pandemic Economy," Sept. 17, 2020, with Harold Martin Jr. and Ethan Hitchcock at the VSCPA Business Valuation, Fraud & Litigation Services Conference. Register online at vscpa.com.

READ THE NEXT ARTICLE: "Valuing a Business in a Post-Pandemic World: Part II," at vscpa.com/valuation_pandemic.

For valuations performed post-COVID-19, it will also be important to consider the potential impact of the CARES Act, the federal stimulus package implemented to mitigate the economic effect of the pandemic on businesses. Alternative programs include the U.S. Small Business Administration’s Payroll Protection Program, Economic Injury Disaster Loan and the Main Street Lending Program. Issues to consider in assessing the potential impact of the CARES Act include: • Was the program and expected receipt of funds known or knowable as of the effective valuation date?

• To which program did the business apply for funding?

• When did the business submit its application?

• Has the business received funding or, if not, when does it expect to receive funding?

1. Harrington, James P. and Carla S. Nunes, “Coronavirus: Cost of Capital Considerations in the Current Environment,” Duff & Phelps, April 16, 2020.

2. Romm, Tony, “3 million Americans filed jobless claims last week, pushing eight-week total to 36.5 million,” The Wall Street Journal, May 14, 2020.

3. As is discussed elsewhere in this article, for certain industries, the impact of COVID-19 may actually be positive (e.g., food delivery businesses).

4. Most insurance policies have a “force majeure” clause which is a contractual provision excusing a party’s performance obligations when circumstances arise which are beyond the party’s control and make performance impossible. Insurers are arguing the COVID-19 pandemic falls under this type of clause. This is a legal matter for the client’s attorney to assess.

5. Hannon, Paul and Saabira Chaudhuri, “Why the Economic Recovery Will Be More of a ‘Swoosh’ than V-Shaped,” The Wall Street Journal, May 11, 2020.

• What can the funds be used for?

• Will funding in the form of loans be forgiven?

• How should the risk that a loan may not be forgiven be quantified?

• Are the funds taxable?

The AICPA CARES Act Task Force is currently developing a FAQ sheet addressing valuation issues related to the CARES Act and will post to the AICPA Coronavirus Resource Center website.

Harold G. Martin Jr., CPA/ABV/CFF, ASA, CFE, is the partner-in-charge of Valuation and Forensic Services for Keiter in Richmond, and an adjunct faculty of The College of William and Mary Raymond A. Mason School of Business, where he teaches forensic accounting in the Master of Accounting program. He is a member of the Disclosures Editorial Task Force, and created and chairs the VSCPA Business Valuation, Fraud and Litigation Services Conference. hmartin@keitercpa.com

SUMMARY The post-COVID-19 environment is constantly evolving and professional business appraisers must stay abreast of current developments to ensure they are considering all information necessary to develop reasonable and credible estimates of value for closely held businesses. n

AUTHOR’S NOTE: I wish to thank Jim Hitchner of Financial Valuation Advisors, and Asif Charania, Ethan Hitchcock and Greg Saunders of Keiter for reviewing this article and providing their insights. Any errors are solely my own.

This article is an edited version of a longer article that appeared in Financial Valuation and Litigation Expert. Reprinted with permission.

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HANDLING competition: IS IT TIME TO BE INNOVATIVE? To face competition, remind clients why a CPA is better than any alternative: You offer expertise, time and service.

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INNOVATION

By Christopher R. Cicalese, CPA, MSTFP

Let’s get straight to the point. Despite what

popular TV commercials may say these days, all people aren’t tax people. In addition, they might not be a CPA, an auditor or even a bookkeeper. The world of accounting continues to grow with “experts” trying to supplement their income by equipping themselves with software purchased at the local store or online.

Thanks to new technology, even geography is no longer a barrier. The accountant located a state over is just as competitive in the market as the accountant down the street.

An accountant’s competition is no longer found just within the accounting industry; it could start appearing from Silicon Valley or even overseas. Looking at the types of technology firms use and the high costs of recruiting and retaining employees, it is easy to see the writing on the wall. Technology and automation will begin replacing accountants’ jobs if they haven’t already. At the same time, some firms outsource work to foreign countries. This puts more and more pressure on the modern accountant to adapt to today’s world so they can remain competitive.

THE VALUE OF SOCIALIZING In a world of screen time, be human! Building relationships with clients, prospects and referral partners is even more important in 2020. Although some events and connections may seem insignificant at first, you never know who someone knows. Sharing who you are as a person, behind the business card, can go a long way. Many times, a contact has thanked me for taking extra interest in their business. That interest could be as simple as having a conversation with someone and just seeing where their industry is going or asking questions about how they operate.

Although this might not directly translate into business, it does build more of a connection and give valuable insight that can be used with other contacts in a similar industry. More importantly, taking a small amount of time to show interest in a contact overcomes the introvert accountant stereotype. So if your contact is later out on the town, they can boast about how you aren’t the “typical” accountant.

INNOVATION HELPS Today there is software that can do almost every part of the accountant’s day-to-day tasks. To remain competitive with other firms, big and small, physical and virtual, it is important to implement technology to help automate tasks and mitigate manual billable hours. This could be anything from write-up work to audit sampling.

When searching for software options, it is vital to evaluate and test the software thoroughly to understand how it will work and if staff can handle it.

If new software that costs tens of thousands of dollars can’t be used correctly, it is just a waste of money. At the same time, as awesome as it would be to automate all processes, it is important for software end-users to understand what the software is doing so they can interpret the results or output. A prime example would be scanning client source documents for a personal tax return and using the scanning software to automatically enter the data into the return. If a fresh graduate doesn’t understand tax law, they may assume a return is correct because the computer did it and time will be wasted making corrections. The more reliant a user becomes on software, the less likely they will truly understand a task.

Having top-notch technology at your fingertips is great, but when that technology fails, you need to have a backup plan so that the job still gets done.

Having the knowledge to complete the task manually will provide an advantage over the competition that solely relies on that same technology. Many non-CPAs that enter the traditional CPA territory don’t always understand the theory behind tasks that they enable technology to handle for them. While technology is valuable and helps complete the tasks faster, CPAs still must educate not only their staff, but also their clients so everyone can understand the “why.” Technology gives everyone the ability to achieve the same result, but the interpretation could be way off if they don’t truly understand what they are doing.

When evaluating an app or software, it’s important to know when to realistically call it. If the hoops one u

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is going through to be more efficient are actually making them less efficient and productive, it’s time to reconsider. Not every business can use the same tech stack and, in some instances, the client may not be able to use it correctly. Although the urge to use technology to compete with other firms will always be there, it is important to be smart about it and still focus on the core business. If the tech doesn’t work, turn attention to the client and find the most efficient way to complete the job.

solely relying on a tech stack to help them complete their tasks. As accountants, we need to differentiate ourselves from the pack and provide more value to clients. Clients don’t want just a copy-andpaste tech stack. They want their CPA’s expertise, time and service.

Those who do that well will be harder to replace.

As the outside world enters the accounting market, it is important for CPAs to remind clients and prospects who they are, what they know and how they got here. n

KEEP THE FOCUS Whether a CPA is at a conference or reading a monthly accounting journal, he or she will see new things in the industry that will often distract from core services. Today, many firms are trying to adapt to cloud accounting and outsourced accounting services. The truth is that this could possibly overextend the resources of some firms. At that point, the work product may suffer and actually be a disservice to clients. Many of the new faces in the accounting world that have no true accounting background are

Christopher R. Cicalese, CPA, MSTFP, is a manager at Alloy Silverstein Accountants and Advisors. He is a member of the New Jersey Society of CPAs. ccicalese@alloysilverstein.com Reprinted with permission from the New Jersey Society of CPAs, njcpa.org.

RENEWYOU YOUR THANK MEMBERSHIP FOR BEING BY JULY 31 A MEMBER

We are grateful to have you as a VSCPA member and look forward to another membership year. Renew your membership by July 31 at vscpa.com/Renew to maintain access to benefits including: 40+ FREE CPE credit opportunities (up from 20), over $1,000 value.

Up to $200 off virtual conferences and up to $100 savings on online seminars, webcasts and webinars.

A monthly payment option for dues at no additional cost.

For members who are experiencing unemployment or are working fewer than 1,000 hours, we offer a 71% discount on dues, a $90 dues rate.

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2020 Learning Coming to You Virtually

After careful consideration, all VSCPA learning opportunities will be offered online only for the remainder of the year.

Offering online learning during this time allows us time to prepare our building and work with other facilities throughout Virginia to safely hold future in-person meetings and events following best practices, increased sanitization and healthy habits.

In addition, online platforms make it possible to continue to deliver top talent and national speakers who would typically travel long distances. We are committed to bringing you the same quality education and networking that you would expect in-person through virtual events including: Virtual signature events • Sept. 16–17: Business Valuation, Fraud & Litigation Services Conference • Oct. 26–27: KnowledgeNOW • Nov. 18–20: 50th Annual Virginia Accounting & Auditing Conference • Nov. 30 – Dec. 2: Don Farmer’s Tax Seminars • Dec. 1–3: NEW! CPA LEADx • Dec. 14–15: Technology & Innovation Showcase

• Dec. 16: Women’s Leadership Forum 80+ virtual seminars* Hundreds of webinars and on-demand options Given the tough economic times and disruptions to learning budgets, we will be offering a 20% discount on virtual seminars* (exclusions apply) and conferences after Sept. 1. For a list of upcoming events or to register, please visit vscpa.com/CPE.

VSCPA

2020 Outstanding Member: Mike Gracik Jr., CPA When Virginia native Mike Gracik Jr., CPA, attended the

University of Virginia (U.Va.) on a full-ride athletic training scholarship, he didn’t think he would graduate with an accounting degree. “Accounting focuses on logical reasoning which really appealed to me. After my first class, I declared it my major.”

While attending UVA, Mike met Harry Dickinson, a longtime close friend and fellow CPA, who is also a former VSCPA Outstanding Member award winner. “We took all of our accounting classes together and both passed the CPA Exam on the first try,” Mike said.

Obviously, there’s something special about the U.Va. accounting graduating class of 1975.

Shortly after college, Mike started working for Peat Marwick (now KPMG) in Richmond on the audit side. After one-and-a-half years in audit, he was selected to work in a small tax group. In 1979, Mike left and went to work for a smaller firm, Gary, Stosch, Walls & Co., PC. “At some point in time, tax will click for you or not; in 1979, it clicked.” Five years later, Mike would make partner and help grow the firm to 100 employees.

Mike’s most significant career move was to join Keiter in 1991, when the firm was looking to grow their tax department. In 2014, Mike transitioned from tax partner to the firm’s managing partner.

Since joining the Keiter team, Mike has witnessed the firm grow from 30 to 160 professionals. “I attribute this growth to our ability to provide the high quality client services and advice businesses need to be successful. Our goal is to be their long-term business partner. I tell people I went to college to study accounting and ended up a business developer and marketer.”

Mike retired from the firm in 2018 but came back a year later as a part-time director. When a CPA retires, they take years of public accounting experience with them. “I came back as a relief pitcher in the bull pen to help with client service issues. I got control of my calendar again, and my new role has been incredibly rewarding.”

Being a CPA means a great deal to Mike, and he enjoys serving clients. “I tell our staff we aren’t in the public accounting business; we are in the business of helping people. People are scared to death of the IRS and they can sleep better at night because we are on their team. A lot of clients don’t make a financial move without calling us first.”

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Mike is proud of how Keiter has pivoted during the pandemic.

They have been proactively sending updates and delivering timely information to their clients. Fortunately, Keiter had remote work technology in place for the last five years so shifting employees to working from home was relatively easy. Mike believes the pandemic will empower firms and other businesses who are uneasy about remote work to become more open and flexible. “It will help with retaining talent and could create more opportunities to acquire diverse talent.”

While the profession is progressing, Mike also acknowledges challenges firms still face. One challenge is finding and retaining good people. With the demand for accounting graduates, firms must work hard to attract new talent and retain their existing team.

“WE MUST BE GENUINELY INVESTED IN EMPLOYEES’ PROFESSIONAL SUCCESS, CREATE A DIVERSE AND INCLUSIVE CULTURE AND OFFER FLEXIBILITY.” Another issue is succession planning. Keiter was fortunate to have identified the need for their own partner succession planning around 2010. The partner group knew they were going to have a significant number of retirements in about 10–12 years. “We invested in leadership training, started client transitions and focused on staff retention initiatives to prepare the next generation

VSCPA

of firm leaders. The second generation is running the firm now and they are doing an amazing job.”

It is no surprise Mike enjoys giving back to his profession and his community. He has been consistently active in the VSCPA, serving on the Board of Directors and as the Richmond Chapter president.

Mike also served as the Individual Taxation Committee chair at the American Institute of CPAs (AICPA) and has held various positions for other organizations. “This profession has been really good to me, so I have a desire to give back.”

In his professional work, Mike was always able to provide a solution or resources to solve his clients’ financial challenges. He also wanted to provide resources when they faced even greater life challenges. Mike became very active with the VCU Massey Cancer Center when client and friend, Jeannette Lipman, urged him to join the Massey Advisory Board. Jeanette lost both of her daughters to breast cancer before they were 45 years old. “Now that Jeanette has passed away, I really view it as a personal responsibility to her to help make sure that Massey Cancer Center continues to be a leader in cancer research and care.”

When Mike is not working or volunteering, he loves a round of golf but admits it doesn’t love him back. His favorite ESPN show is “Pardon the Interruption,” which his wife surprised him with a visit to the set for his 65th birthday. This Civil War buff also enjoys researching military history and learning more through his father’s World War II service and stories. You can find him reading about the U.S. Navy or any book written by Philip Kerr or Daniel Silva.

Mike is very appreciative of all the support and encouragement that he has received from his wife, Susan. “None of this would have happened without her strong support,” he says. Mike is also very appreciative of all of the support he has received over the last 29 years from the partners and staff at Keiter. n

Brag, please!

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 high-quality, 300 dpi JPG files. Unfortunately, due to space constraints, we cannot print degrees or designations

2020–2021 VSCPA BOARD OF DIRECTORS CHAIR Henry Davis III, CPA Virginia Commonwealth University, Richmond

CHAIR-ELECT Anne Hagen, CPA, CGMA, MBA Masonic Home of Virginia, Henrico

VICE CHAIRS George Forsythe, CPA, CGMA WellsColeman, Richmond Nammy Lee, CPA, Ph.D. University of Virginia, Falls Church Jennifer Lehman, CPA, CGMA Hantzmon Wiebel LLP, Charlottesville Gabriele Lingenfelter, CPA, MBA Christopher Newport University, Newport News

VSCPA PRESIDENT & CEO Stephanie R. Peters, CAE

AT-LARGE DIRECTORS George Crowell, CPA, CITP Harris, Hardy & Johnstone, PC, Richmond Hope Cupit, CPA SERCAP, Roanoke Melisa Galasso, CPA, CGMA Galasso Learning Solutions, Charlotte, N.C. Daniel Hudgens, CPA Deloitte & Touche, LLP, Richmond LaToya Jordan, CPA, CGFM Auditor of Public Accounts, Richmond Jason Navon, CPA Rossen Landscape, Sterling John Reynolds, CPA Block.one LLC, Blacksburg Neena Shukla, CPA, CFA, CGMA, FCPA PBMares, LLP, Fairfax Charles Valadez, CPA, CITP, CGMA, MBL TechnoServe Inc., Arlington Christine Williamson, CPA CohnReznick LLP, Tysons

awarded to members.

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VSCPA

2020 Impact Award Recipient: Louise Reed, CPA Louise Reed’s

most notable innovation is Afloat, a company that utilizes blockchain technology and smart contracts to automate the exchange of state transferable tax credits.

Louise received her master’s degree in physics at Duke. “I like using the power of math to see how the world works today, but being a physicist, you don’t have immediate tangible results.”

Transitioning to a career she viewed as more relevant to everyday decisions and people, Louise received her master’s in accounting at UNC-Chapel Hill. After getting her CPA license and working as a sole proprietor, she stumbled upon blockchain at the CCH Connections Conference four years ago.

“Blockchain sparked the physicist in me that hadn’t come alive in 20 years. It was like learning about relativity for the first time.”

She wanted to learn more and started by buying bitcoin, which took a few months to acquire. Over the next year, Louise became increasingly knowledgeable about blockchain, cryptocurrencies and smart contracts.

A friend with $500,000 worth of tax credits approached Louise to ask whether she had any clients that may be interested in buying some tax credits, but due to personality conflicts and a lack of trust, the situation became complicated. Louise realized that blockchain could help in this situation. “Because blockchain instills trust through its technology rather than individual people, it can help create a larger and more transparent market for tax credit transfers.”

IN 2018, LOUISE CREATED AFLOAT, THE BLOCKCHAIN-BASED TAX CREDIT MARKETPLACE. The first step was finding the right team. More recently, her team consisted of programmers around the world. However, the pandemic’s economic effects forced her to pivot and begin building an equity-compensated U.S. team.

Afloat enables CPAs to invite their clients, big and small, to buy or sell credits. The process is designed to allow accountants to give amount recommendations. Once within the site, Louise modeled Afloat’s setup after the bid-ask spread of the stock market. Buyers and sellers put in transparent limit orders. The vision, which is currently in beta-testing, is for the blockchain to take care of the rest, such as verifying the credits and ensuring payment.

The blockchain will also allow the potential for governments to

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participate in the database. “My heart is in this, and I believe it will completely transform what we think of finances and how entities connect to each other.”

The current setup gives participating state governments two choices: to authenticate transactions manually on Afloat’s website or to authenticate transactions on a deeper level within the blockchain by becoming a consensusbuilding node.

Historically, tax credits have been bought at a discount to save money. However, Louise believes there’s an untapped market for the average taxpayer to feel more connected to where their taxes end up. For example, taxpayers are able to support historic land preservation versus ecological land preservation based on the sellers they purchase from. Louise sees a future in which governments create state transferable tax credits and where taxpayers “vote” by using tax dollars to encourage the local cause or causes of their choice.

This blockchain journey has also created opportunities for Louise to be a conduit of information by breaking down a complicated subject for CPAs and those in supporting roles. “I believe my role in this world is to transfer the association of cryptocurrency and blockchain with illegal activity to the mindset of accountability and trust.”

Louise enjoys processing the world through the eyes of Abigail Olson, her 20-year-old daughter, whose book is expected to release in the fall of 2020. In her downtime, you might find Louise going on random novice adventures, including taking an auctioneering class, racing a woolly worm, taking a surfing class and going salsa dancing. n

VSCPA

Ruth Coles Harris Advancing Diversity & Inclusion Award Recipient: Patricia Drolet, CPA Patricia Drolet

proves that not only can women rise to the top, they can also work to reflect diversity within their firms and the profession.

As a female CPA in the 1980s and 1990s, Pat did not see many CPAs who looked like her in top roles, and she was determined to change the view. With a clear vision and work ethic, Pat made partner at her first firm at the age of 31 — ultimately becoming the first female chair of the board of directors in the 99-year history of Councilor, Buchanan & Mitchell, PC (CBM).

Not only is Pat an industry-recognized accountant, she is also an organizational leader, speaker and advocate for women’s advancement and empowerment throughout the professional accounting services industry in the D.C.-metro area.

Pat grew up in New Bedford, Mass., a fishing town 60 miles from Boston. As a teen, she worked in accounting, but decided to attend college to pursue psychology. When her mom asked her why she wasn’t pursuing accounting, Pat switched gears and aced all of her accounting classes at Florida Atlantic University. As she worked her way through college, she knew she wanted a career in public accounting.

Missing the change of seasons, Pat moved from Florida to Virginia and landed a job at a D.C.-based firm. After two years, Pat made partner and continued her career there for another 10 years. In 1997, she started a highly successful, women-owned CPA firm, hitting the $1 million mark in business within five years. With the addition of another female partner, she doubled her business and was approached in 2014 by CBM to merge.

Merging was not on Pat’s mind, but CBM wanted to diversify. The firm’s managing partner at the time knew CBM needed to change and could not continue the path of little to no diversity.

Now six years after the merger, Pat has led CBM’s diversity initiative to increasing success: 47 percent of employees in management positions are female, 65 percent of employees are women and 33 percent are ethnically diverse. Now, CBM is recruiting diverse students and interns into a firm that reflects them.

“THE GOAL IS FOR YOUR FIRM TO BE SO WELLROUNDED THAT YOUNG PEOPLE LOOK AND SAY, ‘I WANT TO WORK THERE.’”

Pat has always been very active in the profession by serving as the president of the Greater Washington Society of CPAs, attending VSCPA’s chapter events and participating on the American Institute of CPAs Professional Ethics Executive Committee, to name a few.

“Getting this award is special to me — the diversity issue has been here from the start. Women in the accounting profession have so much to give and so much growth to receive.”

Pat believes the shifting of the workforce due to COVID-19 could help with diversity and inclusion efforts. “Everyone is at home and on the same playing field, which could level-set things.”

When Pat is not spearheading diversity efforts, you will find her hiking or biking in nature, visiting her home in Cape Cod with her partner or cooking up some of her favorite vegetarian dishes.

You may also find Auggie and Pearl, her Siamese cats, cuddled up nearby while Pat reads historical fiction or catches up on the Netflix series, Schitt’s Creek. Like her role model, Katherine Graham, Pat Drolet is shaping the future of diversity and inclusion in the accounting world. Now, when Pat looks around her firm, she sees women in executive positions, a diverse and inclusive workforce and a reflective environment for incoming staff and interns. n

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VSCPA

Top 5 Under 35 Award Recipients JOHN REYNOLDS, CPA Lead Analyst, Block.one, Blacksburg Hometown: Magnolia, Del. John Reynolds, CPA, is leading the way for the U.S. operations of Block.one LLC, a global blockchain software development company. As the U.S. lead financial planning & analysis (FP&A) analyst, he facilitated the company’s first budgeting process and implemented a new accounting and HR solution for the entire organization. At Radford University, John’s academic advisor convinced him to double major in finance and accounting. Getting his CPA was an integral step in his career journey and one he knew would “rubberstamp” his credibility. He started his professional involvement in the VSCPA Roanoke Chapter, enabling him to advocate for the growth and regeneration of the profession. He then became involved in the VSCPA’s Young Professional Advisory Council, CPA Ready workshops and university engagement. He is also a member of the 2020–2021 VSCPA Board of Directors. Outside the CPA world, John serves on the board of the Trail Life, American Heritage Girls Troop and Radford University’s Student Managed Investment Portfolio Organization, where he helps students learn portfolio management by investing more than $2 million of university foundation funds. When not delving into blockchain and helping his community, John enjoys competing in strongman competitions, spending time with his wife and three children and trying a little freshwater fishing.

BILLY BARBER, CPA, PFS CFO, Foundation Companies, LLC, Fredericksburg Hometown: Fredericksburg Billy Barber, CPA, PFS, went to the University of Richmond to play baseball and take advantage of its highly reputable business program where he studied finance. Soon after graduation, he found himself transitioning into a bookkeeping role. He liked the stability accounting provided — but also realized the key to growth is becoming a CPA. Billy went back to school a year after graduation to satisfy the additional hours needed to sit for the CPA Exam. Studying came with challenges (he had three young children), so he had to stay extremely disciplined. His hard work paid off and he passed each part the first time to become licensed in September 2015. Since then, he has worked to leverage his skills as a CPA to help the Greater Fredericksburg area. He prioritizes giving back to his community so others may have the same opportunity. He’s served on three different nonprofit boards, been involved with Habitat for Humanity, runs a baseball camp, raises funds for breast cancer and enjoys going back into classrooms to encourage students to become CPAs. As leader of the VSCPA Battlefield Chapter, he has heralded efforts to increase event attendance and chapter membership. He was also a part of the VSCPA’s 2017 Leadership Academy. In his free time, Billy enjoys spending time with his family and playing baseball.

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VSCPA

LAUREN SIPPLE, CPA, CGFM Audit Manager, KPMG, Washington, DC Hometown: Springfield

JOHN WATERS, CPA Senior Manager, Wall, Einhorn & Chernitzer, PC, Norfolk Hometown: Suffolk John Waters, CPA, graduated from Old Dominion University (ODU) with a bachelor’s degree in business administration and master’s in accounting. At ODU, John took an accounting class in college that opened his eyes to all the possibilities being a CPA would bring. Passing the CPA Exam wasn’t easy, but securing a mentor helped him get through it. He has been at Wall, Einhorn & Chernitzer, PC, his entire career, moving up the ranks to a senior manager position over the last decade. John enjoys working with clients and leading his firm’s nonprofit niche.

He prides himself on working up the ranks and being a sounding board for management and shareholders as the primary leader in nonprofit. He’s been a board member and now on the Executive Committee of the VSCPA Educational Foundation and has also served on the Scholarship Committee since 2017.

He has a passion for helping others, regardless of their client status, to dissect an issue or plan for the future. When not helping others, he loves to cycle and travel. He had to miss a trip to Barcelona because of the pandemic, but spends time with his Corgi, Rocky Waters.

A second-generation CPA with an eye for travel, Lauren Sipple, CPA, CGFM, is an audit manager at KPMG, LLP, performing large, integrated federal audits and taking advantage of many of KPMG’s leadership opportunities.

She has served as chair of KPMG Associates Council, participated in KPMG’s Audit 90 Women’s Leadership Program and sat on the firm’s Audit Innovation Council, among other accomplishments. She was the Greater Washington Society of CPAs’ 2019 Outstanding Young or Emerging Professional and recognized as a KPMG employee of the quarter. She’s also been nominated for their National Mentoring Award and the chairman’s award for High Performers. She is active in her community through her firm’s Families For Literacy program, the American Heart Association Heart Walk and Junior Achievement. She has a travel goal of visiting all 50 states and national parks and has already checked off 41 states and nearly half of the parks!

BRIAN BENSON, CPA Controller at Lawrence Companies, Roanoke Hometown: Roanoke Brian Benson, CPA, is a Virginia Tech alumni and third generation accounting professional. Starting off college as a history major, he quickly realized he needed to pivot to a major that was more sustainable in the current market. After graduating with a degree in accounting and information systems, he landed a job with Ernst and Young’s (EY) audit practice. He spent a year at Capital One before returning to EY five years ago, passing the CPA Exam, becoming a CPA and being promoted to a manager in the audit practice. He enjoys the variety that being a CPA brings and giving back to the future of the profession, a mission he stewarded as the vice chair and now chair of the VSCPA Young Professionals Advisory Council. Being a CPA comes with prestige and possibility, something he hopes to share with students to change the perception of accounting. His accomplishments include receiving the EY Culture Coin for revitalizing his office’s recruiting efforts at Virginia Tech, being accepted into the company’s Business Development Academy and, perhaps most importantly, surviving a lightning strike!

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VSCPA

Congrats to the following members

CHAIR

NEW HIRES Jennifer Dillon, CPA, is the new chief financial and operations officer of St. Andrews-Sewanee School in Sewanee, Tenn.

At Meadows Urquhart Acree & Cook, LLP, in Henrico, Jordan Maynard, CPA, has been promoted to in-charge accountant and Sona Suolangcuo to senior accountant.

APPOINTMENTS & AWARDS Tracey Golden, CPA CGMA, an audit partner at Deloitte in Wilton, Conn., is the new chair of the American Institute of CPAs. Cheryl Hyder, CPA, CFE, ABV, principal of Hyder Consulting in Fairfax, has joined the Ethics Oversight Board of the National Association of Certified Valuators and Analysts.

FIRM NEWS Glen Allen-based Keiter won a 2020 Commonwealth Award of Merit from the Virginia Public Relations Society of America for its 40th anniversary campaign, “A Bright Future Serving the Community.”

OPEN VOLUNTEER OPPORTUNITIES We can’t run without members like you! By volunteering with us, you'll gain additional leadership experience, forge new friendships and give back to the profession with your time and expertise. Visit vscpa.com/volunteer for the latest opportunities. We are currently looking for volunteers in these areas: • Chapter Officers • Writing Opportunities • Provide a Testimonial • Media Ambassador

DISCLOSURES

Dianne Guensberg, CPA Dianne D. Guensberg, CPA, McLean

CHAIR-ELECT Nicholas Harrison, CPA KPMG, Richmond

PROMOTIONS

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2020–2021 VSCPA EDUCATIONAL FOUNDATION BOARD

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VICE CHAIRS Scott Davis, CPA Prager Metis CPAs, McLean John Waters, CPA W ​ all, Einhorn & Chernitzer, Norfolk

SECRETARY/TREASURER Beth Bickford, CPA VSCPA

AT-LARGE DIRECTORS Michael Crichton, CPA Burdette Smith & Bish, LLC, Fairfax Jaime Lynn Dernar, CPA Paya, Inc., Reston Chris Enright, CPA Christopher A. Enright, CPA, PLC, Montpelier Cheryl Fields, CPA Owens & Minor, Mechanicsville Heather Flanagan, CPA KPMG, Washington, D.C. Marshall Handy, CPA Roger L. Handy, PC, Virginia Beach Delord King, Ph.D., CPA DCKing Consulting PC, Glen Allen Kevin Matthews, CPA Beta Solutions CPA, LLC, Reston Melanie Randall, CPA McKinney & Company, Ashland Randy Spurrier, CPA Chesapeake Elizabeth Workman, CPA Dixon Hughes Goodman LLP, McLean Natalya Yashina, CPA Hospitality Investors Trust, Fairfax Donna Yenney, CPA Tredegar Corporation, Richmond

Invest in Future CPAs by Donating to the Educational Foundation

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. — Valentina Forero, University of Virginia, VSCPA Minority Scholarship Recipient VSCPA.com/ef-donation

VSCPA

Staff news Pictured clockwise: ANNIVERSARIES July 7: Marketing Specialist Amanda Arnold, five years July 14: Vice President, Finance & Administration Beth Bickford, CPA, CGMA, 11 years July 26: Academic Engagement Director Molly Wash, CAE, 16 years August 6: Innovation & Leadership Director Laura Cobb, CAE, 8 years August 12: Senior Manager, Technology Zané Mullins, PMP, 7 years August 13: Member Services Coordinator Rocio Gibbs, 22 years DEPARTURES Member Services & Event Specialist Tara Pennington has left the VSCPA. We’ll miss you, Tater!

The VSCPA’s newest Virginia CPA licensees Jamal Hamed Ahmed, CPA, South Amboy, N.J.

Noelle Anderson, CPA, San Antonio, Tex.

Stefan Antony, CPA, Chantilly Samuel Boothe II, CPA, Wytheville Mina Bshay, CPA, Fishersville Kelly Bumgarner, CPA, Glen Allen Thomas Capstick, CPA, Norfolk Breanna Chamberlain, CPA,

Taylor Hurley, CPA, Fredericksburg Frederick Kyere, CPA, Ashburn Francis Liu, CPA, Glen Allen James Madison, CPA, MBA, Chesterfield

Kenneth Milman, CPA, Waldorf, Md. Matthew Toomey, CPA, Charlotte, N.C. List from April 1, 2020, to May 31, 2020.

Washington, D.C.

Molly Chheath, CPA, McLean Jennifer Coe, CPA, MBA, Bristol Joshua Dzurko, CPA, MBA, Arlington Laura Fox, CPA, MSA, Hampton Sydney Goldstein, CPA, Arlington

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IN MEMORIAM O. Ralph Puccinelli Jr., CPA, a Life member from Richmond. He served on various VSCPA committees throughout the 1980s and 1990s, as a CPE speaker and president of the Richmond VSCPA Chapter.

As president & CEO of Financial Accounting Services, Ltd., he was an expert witness around Central Virginia for business valuation and estate and income tax issues. He was also recognized several times as a Super CPA by Virginia Business magazine.

William (Bill) West Traynham Jr., CPA, from Danville. He retired last year as executive vice president/CFO of American National Bank & Trust Company.

FOUNDATION

Congrats to the newest VSCPA Educational Foundation scholarship recipients The VSCPA Educational Foundation has awarded 25 scholarships to accomplished and deserving accounting students around the Commonwealth! Thank you to everyone who donated. Your contributions help protect the pipeline of the CPA profession and provide a lifeline for many students to pursue accounting careers. Visit vscpa.com/donatefoundation today to contribute to next year’s crop. The winners for 2020–2021 are: VSCPA Minority Scholarship ($1,500–$2,000) Mario Dorado of Fairfax, George Mason University La'akea Fujita of Coopersburg, Pa., Eastern Mennonite University Nicolas Torrico-Ledesma of Arlington, George Mason University

Thomas M. Berry Jr. Scholarship (two awards at $3,000 each) Kelci Dixon of Clinton, Md., North Carolina A&T State University Katie Winner of Fairfax, University of Virginia

VSCPA Past President's/Chair Scholarship ($2,000)

Verus Financial Partners Scholarship ($3,000)

Carissa Malone of Blacksburg, Virginia Tech

Mia Harvey of Pineville, N.C., Liberty University

VSCPA Undergraduate Scholarship ($1,500)

Virginia Tech Doctoral Scholarship ($3,000)

Abubakar Barrie of Virginia Beach, Old Dominion University Courtney Streeby of Oakwood, Radford University Ellie Schad of North Yarmouth, Maine, Roanoke College Emily Bless of Bumpass, Roanoke College

Note: Selection made by Virginia Tech Adam Du Pon

VSCPA Graduate Scholarship ($2,000) Kaitlin Kerr of Wardensville, W.Va., University of Virginia

Wall, Einhorn & Chernitzer Scholarship ($2,750) Tamera Williams of Franklin, Christopher Newport University

Yount, Hyde & Barbour Scholarship ($3,000) Tyler Spiers of Stony Creek, Virginia Tech

CST Group Scholarship ($3,000) Leanne Musa of Fairfax, University of Virginia

Dixon Hughes Goodman Scholarship (two awards at $2,500) Cindy Ly of Fredericksburg, University of Mary Washington Anna Thomas of Climax, N.C., Emory & Henry College

thank you...

Connor Brumbaugh of Roanoke, Roanoke College Madison Lee of Mechanicsville, College of William and Mary

“Receiving a VSCPA scholarship means the world to me. Being a scholarship recipient is not solely about receiving funds. It tells me that there is someone who believes in me and sees me as having a potential for the future of our society.”

MJW Scholarship (two awards at $2,500 each)

— Cindy Ly, University of Mary Washington

H. Burton Bates Jr. Scholarship ($2,250) Appolinaire Abo of Arlington, Northern Virginia Community College

Kearney & Company Scholarship ($2,500) Grace Carter of Hampstead, Md, University of Virginia Carol Pham of Springfield, George Mason University

Michael E. Mares Scholarship (two awards at $2,250 each)

Sarah Austin of Springfield, George Mason University Melissa Perera of Sterling, George Mason University

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CLASSIFIEDS

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