Disclosures: March/April 2015

Smart money management is always a good idea. That’s why Virginia’s high schoolers are now required to take a class on personal finance (page 14). And, is a Balanced Budget Amendment the way to whip the government’s wallet into shape (page 18)?

this issue

FEATURES

TEACHING

COMMON CENTS 14

In May, the first class of Virginia high schoolers will graduate with a course in financial literacy on their transcripts. What is the state of personal finance education in the Commonwealth?

A BALANCED BUDGET AMENDMENT? 18

Is the key to America’s fiscal woes in a new Balanced Budget Amendment to the U.S. Constitution? Read what supporters and opponents think.

ARTICLES

PEER REVIEW 9

Changes coming to peer review

LEADERSHIP 10

Leading with values, not money

WORK-LIFE BALANCE 12 Place a high value on quality

SECTIONS

BACKTALK

ITEMS

DRAFT

NEWS

EDUCATIONAL

AD INDEX

Beth A. Berk, CPA 23 Digital Benefit Advisors 14 Dixon Hughes Goodman LLP 5 Keiter

PNC Bank 2 Poe Group Advisors

AM THE VSCPA

Virginia Society of Certified Public

disclosures is published bimonthly for members of the Virginia Society of CPAs. Our mission is to enhance the success of CPAs.

VIRGINIA SOCIETY OF CPAs

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

Fax: (804) 273-1741 www.vscpa.com

disclosures

http://disclosures.vscpa.com

EDITORIAL STAFF

Jill Edmonds

Managing Editor disclosures@vscpa.com

Chip Knighton Contributing Editor cknighton@vscpa.com

David Bass

Public Relations & Communications Director dbass@vscpa.com

EDITORIAL TASK FORCE

Joan D. Aaron, CPA

Lindsay S. Andrews, CPA

Adam G. Chaikin, CPA

David L. Cotton, CPA

Gary D. Dittmer, CPA

Elizabeth M. Helle, CPA

Clare K. Levison, CPA Kevin S. Matthews, CPA David R. Peters, CPA George D. Strudgeon, CPA Barbara C. Sukramani, CPA Thomas L. Visotsky, CPA

DEADLINES

Articles and advertising for future issues are due by 5 p.m. on the following dates:

May/June 2015 March 2, 2015

July/August 2015 May 4, 2015

Sept./Oct. 2015 July 6, 2015

Nov./Dec. 2015 Sept. 1, 2015

Jan./Feb. 2016 Nov. 2, 2015

March/April 2016 Jan. 4, 2016

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

VSCPA ENDORSED PARTNERS

FROM THE WEB >>

BACKTALK you said it

HONORING SAM DERIEUX, CPA

One could not absorb the attributes of Sam and his contributions to Accounting and Humanity in one sitting. Saying he was an inspiration would be an understatement. One can bet he is still a force.

HOWARD BRANTLY, CPA Virginia Beach

Great story about a great southern gentleman and a CPA.

STEPHANIE SAUNDERS, CPA Virginia Beach

From the TWITTERSPHERE >>

Participating in #VSCPA CPA Assembly Day. Great to see CPAs involved!

— @GARYTHOMSONDHG

Congrats to all, and I was glad to speak! @VSCPANews holds second Leadership Academy for young CPAs

— @EKIMOFFCPA

Exciting to see Va. First Lady Dorothy McAuliffe testifying in House Finance this morning.

— @VSCPAEMWALKER

VIA VSCPA.COM >>

On VSCPA President & CEO Stephanie Peters, CAE, receiving the Virginia Society ofAssociation Executives’ Award of Excellence: Congratulations Stephanie. Your recognition by your peers is well deserved. It is our great fortune that you are our Society’s leader.

MARSHALL NORTHINGTON, CPA Richmond

CONNECT: http://connect.vscpa.com

TWITTER: @VSCPANews, @FinancialFit

LINKEDIN: http://tinyurl.com/VSCPALinkedInGroup FACEBOOK: www.facebook.com/VSCPA INSTAGRAM: www.instagram.com/VSCPA

Get in touch At the Virginia Society of CPAs, we love to hear from you. Whether it’s a quick email to a staff member, chat on the phone, Disclosures letter to the editor, tweet, blog comment or something different altogether, let us know what you’re talking about, how you feel about different issues affecting CPAs and how we can help.

tweet or something different altogether, let us know what you’re talking about, how you feel about different issues affecting CPAs and how we can help.

items

Stosch to retire from Senate

The Virginia General Assembly must brace itself to lose its only CPA.

Sen. Walter A. Stosch, CPA, a VSCPA life member and current president pro tempore of the Virginia Senate, announced in January that he will retire from the Senate at the end of his current term.

Stosch, 78, served in the Virginia General Assembly for 32 years, the last 23 in the Senate. A Republican from Henrico, he was managing partner at Stosch, Dacey & George in Glen Allen before stepping back in 1983 to focus on his work in the House of Delegates.

He was elected to the Senate from the 12th District in 1991 and served as Senate Majority Leader from 1998–2008. He has been chair or cochair of the Senate Finance Committee since 2012.

Stosch received his bachelor’s and master’s degrees from the University of Richmond and served in the U.S. Army from 1953–1956. He earned Legislator of the Year honors from the Virginia Chamber of Commerce in 2012 and the Virginia State Police in 2013.

“As expressed in Ecclesiastes, there is a season and a time for everything and I have decided it is time for me to dust off a ‘to do’ list I put aside 32 years ago,” Stosch said in his announcement. “…I know it is now my time to exit. I am able to pick the time to leave and go out on top, a crowning and personally satisfying close to my official role in the Senate. I look forward to time for personal enjoyment and new opportunities for community service in the future.”

Look for a Disclosures feature on Stosch in an upcoming issue. n

RENEW TODAY

Thank you for being a VSCPA member! Renewal is now available. 2015 brings new member programs, enhanced and diverse CPE opportunities and much more. Renew today at www.vscpa.com/Renew. n

>> EXCELLENT EXCEL: COMPARE IN EXCEL

Has your client ever provided you with a new version of an Excel workbook that you just spent hours testing? While they may have told you they only changed three cells in the monster workbook, your professional skepticism will not let you drop the new file into your work papers and move on to your next engagement. If only Excel had a Compare function like Word has under the Review tab in its menu ribbon on top. Excel 2013 does! However, you will have to go looking for it and add it as a new tab ribbon to your version of Excel. The Compare function is only available in Excel 2013 Office Professional Plus and Office 365 Professional Plus editions as part of the Inquire add-in, which can be added by:

1. Clicking File > Options > Add-Ins.

2. Selecting COM Add-ins in the Manage box, and clicking Go.

3. Making sure the COM Add-Ins dialog box, the box next to Inquire Add-in, is selected.

Now with the Compare function under your Inquire tab in your Excel’s ribbon on top you will be able to quickly verify that nothing else changed in the new workbook from the client and still be able to move on to your next engagement. n

GEORGE D. STRUDGEON, CPA, CGFM, is an audit director at the Virginia Auditor of Public Accounts in Richmond. He is a member of the Disclosures Editorial Task Force. Email him if you have Excel topics you want him to cover. george.strudgeon@gmail.com connect.vscpa.com/GeorgeStrudgeon

Terrible service on the horizon?

Uh-oh. It doesn’t look good for taxpayers who are hoping to receive better service from the U.S. Internal Revenue Service (IRS) this year. The National Taxpayer Advocate 2014 Annual Report to Congress, released in January from Taxpayer Advocate Nina E. Olson, projects taxpayers will receive the worst levels of service from the IRS since 2001 (see “Data Draft” on page 8 for numbers on IRS service).

There are several reasons for the IRS’s suite of problems, Olson writes. The budget environment over the last five years has “brought about a devastating erosion of taxpayer service, harming taxpayers individually and collectively.” A lack of effective administration and congressional oversight (plus a failure to pass taxpayer rights legislation, which Olson has repeatedly championed since 2007) also contribute to the harm. Olson fears these issues are “not positive for future tax compliance” and will further erode the public’s trust in the tax system.

Sounds dire. But it doesn’t have to be a downward spiral. If Congress steps up and takes several actions, public trust may be restored. Congress must make “an investment in the IRS” and “hold it accountable for how it applies that investment.” Here are a few ways it can do that:

>> Finally enact a Taxpayer Bill of Rights, a list of 10 rights modeled on the U.S. Constitution’s Bill of Rights (of which a Right to Quality Service is one). The House passed legislation to implement the Bill of Rights in 2013, but it stalled in the Senate. Last year, the IRS made an administrative move to adopt the Bill of Rights, which Olsen praised, but she still pushes Congress to make the move to ensure taxpayers’ rights become a “permanent part of our tax system.”

LINE items

>> Increase funding and oversight, which are critical to actually honoring the Taxpayer Bill of Rights. The IRS cannot commit to quality service without enough resources. Olson also recommends reviving joint Congressional hearings to review the IRS’s progress in meeting its objectives and identify problem areas.

>>

Enact comprehensive tax reform to simplify the system and ease burdens on both taxpayers and the IRS.

The IRS’s image has an uphill battle, Olson writes, because of a “perfect storm” created by increasing workload, the erosion of public trust because of the use of “tea party” and other terms when screening applicants and reductions in funding.

But Olson has a deep respect for the IRS and its role in society, stating “We need to recognize that the IRS and its employees play a vital role in the economic welfare of this country. And we need to find a way to support the agency even as we hold it accountable for what is often a thankless task.”

If this piques your interest and you’d like to read the full 2014 Annual Report and its 23 identified problems, dozens of recommendations for administrative change, 19 recommendations for legislative change and analysis of the 10 tax issues most frequently litigated in the federal courts, visit http://www.taxpayeradvocate.irs.gov/ 2014-Annual-Report/. n

>> EXAM’S ON!

If you’re interested in obtaining the Chartered Global Management Accountant (CGMA) designation, it’s time to hit the books. Beginning Jan. 1 of this year, all candidates are now required to pass a strategic case study exam in management accounting in order to obtain the designation. The exam consists of comprehensive case study in which test takers apply their knowledge to realworld scenarios. Check out a two-minute video about the exam at http://tinyurl.com/otdzckz or scan the QR code with your smartphone. n

DATA draft

THE IRS AND TAXPAYER SERVICE >>

Is this a sinking ship?

Talking tech at firms

Just how prevalent is technology usage at CPA firms of all sizes? Good thing the AICPA PCPS/TSCPA 2014 National Management of an Accounting Practice (MAP) Survey found out. Results from last year’s survey, conducted by the American Institute of CPAs and Texas Society of CPAs, discovered the following usage percentages:

Active website: 77 percent

Accept credit cards: 64 percent

Remote access to network: 70 percent

Use cloud-based remote backup: 50 percent

Use cloud-based software: 48 percent

Use Skype or similar service: 25 percent

The National Taxpayer Advocate 2014 Annual Report to Congress projects taxpayer service from the U.S. Internal Revenue Service (IRS) will sink this year (see “Line Items” on page 7 for more on the report). If this doesn’t sound like an agency in need of a lifeline, we don’t know what does:

>> 200 MILLION: The number of Americans who interact with the IRS each year. That’s more than three times as many as any other federal agency. It is currently receiving 11 PERCENT more returns from individuals and 18 PERCENT more returns from businesses than a decade ago.

>> 100 MILLION: The number of telephone calls the IRS receives on average each year. That’s in addition to 10 MILLION letters and 5 MILLION walk-in visits.

>> 87 PERCENT: That’s the number of calls the IRS answered from taxpayers seeking to speak with someone, with an average hold time of 2.5 MINUTES — back in fiscal year 2004. Projected stats for 2015 are: LESS THAN HALF of telephone calls answered, with levels of service as low as 43 PERCENT and wait times on average of 30 MINUTES

>> 17 PERCENT: The amount the IRS’s budget has been reduced, adjusted for inflation, since fiscal year 2010.

>> 12,000: The number of employees let go by the IRS due to budget constraints.

>> 83 PERCENT: The reduction in the number spent on IRS employee training since fiscal year 2010.

Budget constraints mean that tax return preparation assistance has been eliminated. The Patient Protection and Affordable Care Act and the Foreign Account Tax Compliance Act will add considerable work. National Taxpayer Advocate Nina Olson stated, “We do not think it is acceptable for the government to tell millions of taxpayers who seek help each year, in essence, ‘We’re sorry. You’re on your own.’” n

Use cloud-based server(s): 21 percent Blog: 14 percent n

DID YOU KNOW?

The cost of tax complexity is not small. According to the U.S. Office of Management and Budget, U.S. citizens take 9.453 billion hours to complete paperwork requirements from 22 executive departments and six independent agencies. (That equals 13,488 human lifetimes — each year.) And among those hours, 75 percent are spent on tax compliance (equalling approximately 7 billion hours).

Source: 2014 Information Collection Budget of the U.S. Government n

>> BY THE NUMBERS

3.5 percent

The average increase in accounting salaries expected in 2015, according to Robert Half. Why? As the economy recovers, accounting firms are gaining back business.

And firms are creating new roles and adding staff to ease workload on existing employees. n

PEER review

Peer review is changing. You can help.

indicators and detecting engagement issues earlier

>> Reviewing all firms that perform accounting, auditing and attestation engagements

>> Monitoring all engagements subject to review

A technology platform could join with human oversight to provide near real-time, continuous analytic evaluation. Monitoring would initially be conducted by the firm itself, and analytic tools would notify the firm of potential quality risks or engagement issues prior to or during engagements.

It’s 2025.

You’re being introduced to Leslie, the quality control partner for her firm. She is in the midst of analyzing client work papers through the firm’s practice monitoring system. Relieved to see that a flag she raised in the system has been resolved by the audit manager, Leslie now understands that the concern had been a simple documentation issue and not a failure to perform a key audit procedure. With this overview of her firm’s engagements and the assurance that her team has addressed her concerns, Leslie can now approve the work papers with a simple voice command. Automatically, the system creates and routes her firm’s standard audit opinion letter tailored for the client.

This is how the American Institute of CPAs (AICPA) envisions the future of the 35-year-old Peer Review Program. On Dec. 15, 2014, the AICPA published the concept paper “Evolving the CPA Profession’s Peer Review Program for the Future: A provocative vision of what practice monitoring could become.” The vision outlined in the paper was developed after two years of research and brainstorming by CPA profession leadership, staff, members and volunteers from across the country.

NOW THE AICPA WANTS YOUR INPUT.

What changes does the concept paper present? Audit effectiveness could be enhanced by:

>> Highlighting potential quality risk

The program would be developed and implemented in multiple phases, beginning with a voluntary pilot group of small, medium and larger firms. The paper explains how future phases would transition from voluntary to mandatory participation. During all phases, a dashboard would provide a snapshot of useful information about the firm’s engagement activities and compliance with performance metrics over areas subject to monitoring.

WHY SHOULD YOU GET INVOLVED?

The concept’s vision is meant to change and develop based on stakeholders’ feedback on the paper. Advances in technology and the pilot program’s impact on firms also will contribute to the maturation and transformation of that vision. Make sure your voice is heard on the future of peer review! n

Get involved in the future of peer review by providing your comments to the AICPA.

>> Visit the Future of Practice Monitoring resource page at http://aicpa.org/ futurepracticemonitoring

>> Download and read the concept paper.

>> Send comments to prsupport@aicpa.org by June 15, 2015 n

LEADERSHIP

Leading with values, not money

BY CHIP KNIGHTON

Sometimes, the best time to make big changes is when things seem to be clicking.

When Luck Companies decided it was time for such a thought shift, it wound up changing the company’s culture in a way none of the company’s leadership could have predicted.

Luck, a Richmond-based mining and construction company, went through a period of rapid growth in the 1990s, but the growth wound up being too much of a good thing. Study after study and consultant after consultant failed to fix the issues that stemmed from the expansion.

“We had a real command-and-control environment,” said Tom Epperson, leadership development manager at Luck Stone Corporation, a Luck subsidiary. “People at

the top would say to go do things and we would go and do it. We had a period of rapid growth where we basically tripled in size, and we could no longer use that approach, so we decided to decentralize the business.

“When we did that, all hell broke loose. The culture started to come apart at the seams. People started to fight over resources, and people in different locations would make decisions in different ways. The organization got political in a hurry. Even though we were financially successful at the time, it was not a pleasant place to work.”

Luck found a way to fix its problems in Values Based Leadership (VBL), a philosophy that President and CEO Charles Luck IV learned from business legend Ken Blanchard. The shift to VBL was both simple and incredibly complex as Luck leadership worked on

transitioning the company’s entire culture. In a presentation to CPA firm leaders at the VSCPA Top Firms Roundtable on Sept. 29, 2014, Epperson detailed how Luck used VBL.

“When we started to work on our values and our culture, good things started to happen,” Epperson said. “Financially, it helped our numbers. We saw increases in things like our levels of customer service. We saw improvements in our safety record. People were more engaged at work and felt better about working here.”

TURNING COURSE TO A NEW PHILOSOPHY

Luck’s VBL website describes the philosophy as “living, working and leading in alignment with your values, principles and beliefs to in turn ignite the extraordinary potential in those around you.” Epperson likes to cite Gallup polling figures that state 20 percent of the U.S. workforce are engaged in their work, 60 percent are “in neutral” and 20 percent are actively disengaged. The aim of VBL is to increase that first number as much as possible.

“When you can find an organization that aligns with your core values and primary beliefs, you’re going to be happier,” Epperson said. “The more decisions you can make that align with your authentic self, who you are, the better work you’re going to do.”

The true test of VBL for Luck came with the 2008 economic downturn. As a company with interests in the construction industry, Luck was hit especially hard by the downturn, but the company’s core strengths allowed it to weather the storm.

“Basically two-thirds of our business evaporated in six months,” Epperson said. “Funding dried up. Resources dried up. Our ability to get capital dried up. It got bad in a hurry, and we weren’t any exception to that. We were fighting to keep the lights on. We felt like, looking back, it would have been a lot worse had we not done all this work on the culture and the leadership.”

At the same time, Charles Luck IV was going

through a period of personal turmoil. His mother and sister were diagnosed with cancer, and he developed an illness of his own that kept him bedridden for six months. With half a year to think, Luck’s thoughts took a philosophical turn, both inward and outward. He emerged from his illness with a fresh set of ideas about the future of Luck Companies.

“He had a lot of time to think about why the company existed and why he was on the earth,” Epperson said. “When he got back, he charged us with trying to make a difference in the world. Making money’s not enough. It’s our sweet spot, but at the same time, leaves something on the table. We can do more than just print paychecks.”

That led to the next phase of the company’s VBL journey. By 2010, the philosophy had taken root and expanded, and company leadership decided it was time to take the ideas out into the community. Part of that was done on a case-by-case basis, with Luck employees assuming leadership roles in the community, but part was more formal. The company founded the Luck Institute for Values-Based Leadership, a nonprofit aimed at spreading the philosophy.

At larger organizations, ethics can “kind of get blurred. You lose sight of right and wrong,” Epperson said. “You start making questionable choices, particularly the more you get focused on short-term results. One of the outcomes of VBL is really defining what your decision-making processes are. How do you make decisions that really align with your organization’s values?”

CREATING MEANING FOR MILLENNIALS

A major focus of the VBL ethos is answering a question asked by many millennials who have entered the workforce in huge numbers. Research shows that generation is motivated by the idea of making an impact, rather than making the most money possible. How does a company help fill that need for meaning?

“In our for-profit business, we don’t always make the decision that’s going to make us the

Themes of Tom Epperson’s Values Based Leadership session at the Top Firms Roundtable in September 2014 included how to ensure employees are engaged with their work and how to get the most out of millennial employees.

most money,” Epperson said. “We ask whether it will align with our integrity value.

“We’ve walked away from deals, customers, permitting opportunities, because we would have to sacrifice our integrity value to get that business deal done. But our partners trust us more, the community trusts us more.”

Those are statements that should resonate with CPAs, who trade on their professional integrity as much as their accounting credentials.

“In the CPA world, your integrity is desperately important,” Epperson said. “People want to trust you. They want to know that you’ve got pretty high integrity, that you’re not going to just say ‘yes’ and tell them what they want to hear. That’s a strength that the CPA community can definitely capitalize on.”

That search for meaning has the added benefit of appealing to the millennial generation, born between 1982 and 2000 and currently entering the workforce in droves. In addition to being motivated more by meaning than by sheer financial clout, millennials are also notable for their job-hopping tendencies. And the generation right behind the millennials, the so-called “Generation Z,” will pose an entirely new set of challenges and opportunities for forward-thinking leaders.

The beauty of VBL is that it can help inform decisions that crop up thanks to changes in the workforce or the market. It’s an ethos that can help define a company’s mission, its priorities and its future goals.

“You can’t make a decision for your whole workforce. When you’re dealing with clients and the world, you need a way to make decisions within your organization’s values. If you can get that, you’ve got your arms wrapped around a lot of what you need to solve.”

Learn more about VBL at www.valuesbasedleader.com. n

CHIP KNIGHTON is communications manager at the VSCPA, as well as contributing editor at Disclosures magazine.

cknighton@vscpa.com connect.vscpa.com/ChipKnighton @ChipKnighton

WORK-LIFE balance

Want quality of life and quality of practice? Place a high value on both.

BY IRA S. ROSENBLOOM, CPA

Over the course of 30 years as a practicing CPA, and extensive work consulting with small and mediumsized accounting firms during the last five years, I have noticed a huge disconnect between the approach practitioners take with their clients and how they direct their own businesses.

Clients expect their CPAs to advocate best practices and disciplines to optimize their return on investment, but when it comes to their own practices, CPAs seem to forget these goals. CPAs who feel they are enjoying the appropriate earnings for their time and aggravation seem to be in the minority, and those CPAs who are ready to change their ways are growing in number.

Given the responsibilities that come with CPA firm leadership, quality of life needs to be a priority. There is a direct relationship between the viability of strong quality of life and the level of business management

excellence in a CPA firm. Making the same money for less time or making more money for the same time will generate the best resources for optimizing quality of life. Here are five ways to realize the results you are worthy of:

1. MAXIMIZE PRODUCTIVE TIME

“Productive time” is not exclusively billable time, but it is valuable. For starters, it is important to set up a system that allows you and your staff to perform at your best. Leaders’ skills are typically diverse, so allocating time for solid results utilizing these skills should be part of your quarterly time budget.

Generally, leaders are bogged down with administrative functions that impede their ability to be as happy and as effective as they would like. Socialization and relaxation are important contributors to productivity.

WORK-LIFE balance

Incorporate costs for socialization and relaxation, such as tennis matches, exercise and card games, into your quarterly budget and find a comfortable way to monitor your results. These activities are just as important as partner meetings and client service commitments.

Happiness is a huge factor in solidifying quality of life and enhancing productivity. Structuring your time to advance professional and personal happiness is an economic catalyst and will maximize production.

2. TAILOR ACCESSIBILITY

Accessibility and responsiveness to clients, as well as peers, are vital to strong communication and enhanced relationships. Encouraging your clients and peers to reach out to you is good business. Setting the ground rules for accessibility and responsiveness, however, will go a long way to assuring your happiness and the satisfaction of your clients, partners and staff.

Advising clients that you welcome their calls during certain hours of the day, but not others, will add much to your quality of life, and will provide guidelines for those who are trying to reach you. Committing to responses within a specific time frame will also allow you to manage deadlines and diminish stress. Filtering which clients have access to your cell phone number will allow you to control the situation and also set the tone for a better quality of life.

3. FOCUS ON THE MODEL CLIENT

Most of the intense aggravation in an accounting firm comes from doing work you should not be doing, do not want to do or do not get paid properly to do. By defining your “model client” and taking on clients with those attributes, you will be able to grow your practice and ultimately re-engineer your firm. As you determine your model client profile, remember that what you do best should be a factor, as well as what you like to do. Be sure and set proper fees for these services as well.

Some firms establish their model clients by industry and others by industry and service. The more clients that meet your model, the greater your profitability and efficiency and the more time you will have available for other personal and business matters.

4. REALIZE YOUR DREAMS

Whether you are outgoing or reserved, you should always have career aspirations and should make the time to turn those dreams into reality. The energy that comes from pursuing your dreams will be invigorating to you and those around you. Some people dream of having certain

trophy clients. Some dream of doing certain types of projects. Some aspire to attain certain positions in the firm and others are focused on networking and making certain connections. Dreams should be part of a “goals program,” and achieving these goals should be rewarded.

The benefit of professional dreaming includes stronger profits, enhanced efficiency and heightened firm morale. The benefits will clearly improve quality of life and should improve firm operational performance as well.

5. OPERATE ON A VALUE PLATFORM

Two common elements required to achieve quality of business performance and quality of life are time and money. Improving quality of life typically requires allocating more time for non-business activities, spending money for pleasure or having enough money to compensate for working less.

Quality business performance should be magnified with a valueoriented billing and service platform. When setting hourly rates, the value of the task and service should be a factor. Specialty work, such as expert testimony, tax exams, due diligence and financial consulting, should be charged based on higher hourly rates. The knowledge that you have gained from your experiences, which fosters efficiencies and competencies, should be viewed as a jewel and valued accordingly. Minimum fees should factor in your skills and knowledge and should also be used to control the number of clients you take on, as well as the nature of the tasks. The greater your value for the time you invest, the greater your satisfaction and the more respectful your clients will be of you and your services.

The younger members of the CPA community place a great priority on work-life balance and diversity of experience. They are right! Your time is extremely valuable. Take steps now to put the appropriate value in place. The rewards will be worth it. n

IRA S. ROSENBLOOM, CPA, is the chief operating executive of Optimum Strategies, LLC, a consulting firm focused on helping small and medium-sized CPA firms enhance business performance and profitability, and foster practice continuity.

ira@optimumstrategies.com

FINANCIAL literacy

TEACHING COMMON CENTS

The current state of financial literacy education in Virginia

BY CHIP KNIGHTON

Dr. Felicia Young at J.R. Tucker High School in Henrico County instructs her students on the importance of keeping financial files.

FINANCIAL literacy

In 2009, the Virginia Board of Education (VBOE) approved a one-credit course in economics and personal finance as a requirement for high school graduation for the Standard and Advanced Studies diplomas. It wasn’t a seamless process getting the requirement in place, and the requirement did come with opposition, but the class of 2015 is the first to graduate from high school under the requirement.

Once the requirement went into place for the class that began high school in the fall of 2011, the challenge for the Virginia Department of Education (VDOE) was getting teachers into place.

“School divisions knew in advance that it would be a graduation requirement and knew when that requirement would go into effect,” said Judith Sams, program specialist for business and information technology and related clusters with the VDOE.

Recognizing the potential teaching numbers crunch, the VDOE identified six endorsements that gave teachers the proper background to teach the course: business and information technology, marketing, agricultural education, family and consumer science, history and social science and mathematics. Any teacher licensed in Virginia and endorsed in one of those areas can teach the course.

TEACHING THE TEACHERS

While that’s a broad set of approved endorsements, it still left schools needing to ensure that the endorsed teachers were ready to teach the course. That’s where the Virginia

Council on Economic Education (VCEE) and the VSCPA stepped in. The VCEE runs several training sessions each year, called Economics Institutes and Personal Finance Institutes, where high school teachers can become trained and certified, and VSCPA members have eagerly taken on the role of teaching those teachers .

“Unlike many presentations I’ve done where only a few members of the audience ask questions, almost every one of the teachers got involved in some way,” said Vince Nadder, CPA, a partner at Glen Allen firm Keiter who has led Personal Finance Institutes at Virginia Commonwealth University. “Some asked questions, others tried to reconcile the information I was providing with real-world situations they had encountered, and in some instances, a teacher would try to answer the question or elaborate on a point made by one of the other teachers.”

The Personal Finance Institutes also include the teacher certification version of the Working in Support of Education (W!SE) test, a VBOE-approved, 45-question assessment given to 52,000 students last year with a 79 percent pass rate. The pass rate has been at least 78 percent every year the test has been given to students.

“Being endorsed to teach the course doesn’t mean that you have the knowledge or the good materials to teach the course,” VCEE Director of Programs Sarah Finley said. “We feel that successful participation in the Institutes is a good benchmark to indicate that teachers have the content knowledge to teach the course.”

Ninety-five percent of the 755 teachers who have participated in the PFIs since their inception in 2010 passed the W!SE teacher financial literacy certification test.

“This is one of the most beneficial programs offered to teachers,” Donald Bierschbeck, a teacher at Yorktown High School in Arlington County, said in his evaluation of the 2013 PFI at George Mason University. “The content that is being taught and brought back to students is information that all members of society should be entitled to. I only wish I would have had access to this information 30 years ago.”

For students, the W!SE test isn’t a state requirement for graduation — the state has left it up to individual school divisions to decide whether or not to require it. The Institutes are also voluntary, but the VCEE hopes for higher attendance to help even veteran teachers brush up on their knowledge.

“Even teachers who have been teaching in this area for a long time who have attended these institutes have found them helpful,” Finley said, “but I think that sometimes you don’t know what you don’t know. We really hope that all teachers attend them, and we’ve been pushing for that and have continued to push for that. Maybe you’re a good teacher, but you’ll be an even better teacher.”

The VDOE also offers its own teacher training tools, including sessions during professional association conferences and an online resource center developed in conjunction with the VCEE and the Federal Reserve Bank of Richmond, among other organizations, under the umbrella of Teaching Money Virginia. u

It’s been a long time coming, but Virginia’s first full class of officially financially literate students is heading out into the real world.

FINANCIAL literacy

Most of the resources provided, available at www.TeachingMoneyVA.org, are free, and teachers can add their own resources that they have found, although they’re subject to a vetting process and approval. Keeping costs down was a priority for the VDOE in light of the budget concerns that led to the graduation requirement being delayed for a year.

Nationally, Virginia is ahead of the curve on financial literacy education. The Commonwealth was one of seven states to receive an “A” from Champlain College’s Center for Financial Literacy on its efforts to produce financially literate high school graduates. (The other states to receive the top mark were Georgia, Idaho, Louisiana, Missouri, Tennessee and Utah.) And Virginia placed 29 schools on W!SE’s list of the 100 best schools teaching financial literacy.

WHERE IT ALL BEGAN

The financial literacy movement began in 2005, with the Virginia General Assembly approving a bill to require instruction in financial literacy, the same year the VSCPAdriven Virginia Jump$tart Coalition for Personal Financial Literacy was founded. Three years later, 2008 saw the introduction of the first bill aimed at making an Economics

and Personal Finance course a graduation requirement.

While that bill died in committee, the VBOE took it upon itself to make sure future legislation wasn’t necessary, unanimously approving the graduation requirement through the regulatory process in 2009. (See page 25 for the latest news on current Virginia legislation that concerns issues related to the requirement.) Initially, the requirement was set to take effect beginning with the high school class of 2014, but a 2010 bill delayed all new graduation requirements for financial reasons.

The VSCPA was instrumental in blocking future attempts to stall the graduation requirement, and then-Gov. Bob McDonnell wrote an open letter in support of the requirement and signed legislation that exempted it from delays that affected other new requirements.

At that point, the wheels were already in motion. The VDOE and the VCEE had already kicked off its professional development training, and high schools across the state were preparing to implement their Economics and Personal Finance course offerings.

In addition to the aforementioned state

agencies, the VSCPA and the Virginia Jump$tart Coalition, the Virginia Bankers Association, the Virginia Bureau of Insurance and Virginia 529 were among many other groups instrumental in implementing and protecting the requirement.

“It’s a great example of a lot of different people and organizations working together to make something happen,” Finley said. “There’s really no one group that gets credit, and that’s the beauty of it.”

EMERGING PARTNERSHIPS

Other groups have recognized the hard work in getting the requirement off the ground and offered their own help. Longwood University in Farmville launched a summer pilot program offering dual-enrollment college credit in 2013, and the school has expanded that program each year, with 30 school systems currently participating.

“We saw it as a win-win for us to partner with the school system and promote Longwood,” said Dr. Bennie Waller, chair of Longwood’s Department of Accounting, Economics, Finance and Real Estate.

Waller says Longwood has received multiple requests to offer the program on a year-round

Nationally, Virginia is ahead of the curve on financial literacy education. Virginia was one of seven states to receive an “A” from Champlain College’s Center for Financial Literacy on its efforts to produce financially literate high school graduates.

Watch VSCPA member Vince Nadder, CPA, from Keiter in Glen Allen, instruct high school teachers on how to teach the financial literacy course. Visit the digital edition of Disclosures at http://disclosures.vscpa.com to view the embedded video.

FINANCIAL literacy

basis, and several other colleges have jumped on the dual-enrollment bandwagon.

Such courses clearly benefit the colleges as well as the students — as Sams says, they “get students on campus and let them get to know the university, and it gives the colleges an opportunity to get into the high schools. But most people at colleges and universities feel strongly that this course is that important.”

One university educator who clearly feels that way is Waller, who said: “I, along with other colleagues, just saw the economic crisis really devastate a lot of people. And not just a lot of poor people, but a lot of people who had education.

“I can’t tell you the number of people I counseled who had advanced degrees but did not understand financial literacy. We thought

that it should be taught in K–12 and in college, and that’s what we’re doing now.”

THE FUTURE OF FINANCIAL LITERACY

While the financial literacy graduation requirement is off to a strong start, it’s still in its infancy. The class of 2015 has yet to enter the workforce, and many graduates won’t truly be integrated into society until after college. But stakeholders are encouraged by the way students and teachers have performed.

“Virginia is already starting to show the success from this one standard alone,” Sams said. “We think that the real change is going to come with the change in behavior from our students, which is going to take a couple of years to measure. But with success like this already, we’re in good shape. We want to get

better, but we’re certainly pleased.”

Another indicator of success is the partnerships that have come from the requirement, In addition to the VSCPA, the Virginia Jump$tart Coalition, Junior Achievement and numerous credit unions have all lent their help to the financial literacy cause.

All that means is that success for the financial literacy graduation requirement will be multifaceted. Better test scores, more qualified teachers, helpful resources and enthusiastic partners are all indicators of success.

“Virginia is already starting to show the success from this one standard alone,” Sams said. “We’re going to give the test to more students. Because of the good instruction taking place in our Virginia classrooms, we’re going to have higher pass rates. We’re going to have more teachers who are certified. We’re going to have more teachers taking part in professional development. Partnerships are going to continue to develop more resources, more free resources.

“The real change is going to come with the change in behavior from our students, which is going to take several years to measure. But with success like this already, we’re in good shape. We want to get better, but we’re certainly pleased.” n

CHIP

KNIGHTON is communications manager at the VSCPA, as well as contributing editor at Disclosures magazine.

cknighton@vscpa.com connect.vscpa.com/ChipKnighton @ChipKnighton

FISCAL responsibility

A CONSTITUTIONAL BALANCED BUDGET AMENDMENT

The key to rebuilding America’s fiscal strength?

BY TOM VISOTSKY, CPA, AND EDWARD J. MAZUR, CPA

Can an amendment to the U.S. Constitution requiring, over time, a balanced federal budget help fix our nation’s fiscal ills, or will we just keep muddling through with the hope that the world will lend the United States money in perpetuity?

GOVERNMENTAL FISCAL RESPONSIBILITY: HISTORICAL PERSPECTIVE

The founders of our nation abhorred debt. Debt implied poor character; a failure to meet one’s financial obligations brought shame to one’s self and extended family. Until the 1960s, a strong cultural bias existed against the accumulation of debt — by government and citizens. The bias was particularly present in those who survived the Great Depression of the 1930s. In the early 1960s, however, the U.S. Congress realized two things that worked to significantly reduce or eliminate that bias as it had existed within the federal government for almost 200 years: namely, there would be no political consequences when the government:

1. Borrowed from the Social Security Trust Fund (and later the Medicare Trust Fund) and expended those monies on day-to-day government operations, and

2. Ran annual deficits — even receiving the vocal encouragement of U.S. presidents and many economists who asserted that annual federal deficits would do no harm as long as they didn’t exceed a certain percentage of Gross Domestic Product (GDP).

As national fiscal discipline has declined over the past 50 years, the financial condition of our federal government has grown more and more vulnerable. The “2013 Financial Report of the United States Government,” issued by the U.S. Treasury Department, reported that the outstanding debt and financial obligations of the government now amount to $64.4 trillion. (See Table 1 on page 20.) This sum is equivalent to 400 percent of our nation’s annual GDP in 2013 of $16.1 trillion, and equates to approximately 96 percent of total household and nonprofit net worth. One failed sale of Treasury securities and our government will not be able to pay its bills.

IS CONGRESS CAPABLE OF RESTORING FISCAL SUSTAINABILITY?

As cited in “If the U.S. Government Was a Corporation,” an article appearing in the September/October 2014 issue of Disclosures, our federal government’s fiscal woes include:

>> Losing money every year

>> Projecting that losses will continue indefinitely

>> Receiving a disclaimer of opinion annually from its auditors

>> Spending all trust fund assets to cover current operating expenses, and

>> Having large unfunded liabilities (UL), both on and off its balance sheet.

FISCAL responsibility

So, who is to blame? In the judgment of the authors, it lies primarily with Congress, which is the branch of our federal government that has the authority under the Constitution to levy taxes, appropriate funds and exert oversight on the safety and security of our nation — including its fiscal security, without which security of any other type is in clear jeopardy.

For most of the last 50 years, Congress has failed to install an effective legislative barrier to deficit spending and to the buildup of impossible levels of debt and other financial obligations now owed to its own citizens, foreign governments and other interests.

Congress has tried various approaches, and a few good senators and representatives have tried to change the country’s course. The fact remains that Congress, as an institution, has failed the nation and failed its duty to its citizens.

Of course, Congress was often encouraged to spend excessively by presidents who found it easy to propose new spending, but very difficult to propose cuts in expenditures, or even to implement efficiencies.

The U.S. government has only run a surplus in a handful of years over the last halfcentury, and those were on a cash basis, and recognized receipts from social insurance trust funds as income. Is it realistic to think that the current or future Congresses and presidential administrations will do any better in voluntarily addressing a problem this massive?

A movement to call a constitutional convention for the express purpose u

According to the U.S. Government Accountability Office (GAO), the “federal government continues to face an unsustainable long-term fiscal path.”

Will America do anything to adjust that path before experiencing a crisis that may be too big to fix?

of producing a balanced budget amendment has pros and cons.

STATE ACTIONS TO CALL FOR A BALANCED BUDGET AMENDMENT (BBA)

Article V of the U.S. Constitution allows for two methods to amend the Constitution: a call by two-thirds of both houses of Congress or a call by two-thirds of state legislatures. As the first is unlikely any time in the near future, the current focus is on the latter, which requires approval by both houses of 34 state legislatures. Once called, a convention

for proposing amendments is held, and the delegates from all 50 states meet to deliberate the wording of a BBA. If a BBA passes with a majority of states, it is then considered a proposed amendment, which will become part of the U.S. Constitution when approved by both houses of 38 state legislatures.

According to tracking maintained by the National Conference of State Legislators (NCSL), 24 states have “active” applications for a Convention of States under Article V of the U.S. Constitution to solely consider a federal Balanced Budget Amendment. Twelve states, including Virginia, are being “targeted in

2015,” in an attempt to compile the additional 10 states needed to mandate a constitutional convention.

Virginia Del. Jim LeMunyon (R-Fairfax) and 14 patrons within the Virginia General Assembly have offered House Joint Resolution 499 pursuant to Article V of the Constitution. LeMunyon noted that the call for a BBA already has the endorsement of 24 states, and that, in his view, the states are the only option to get movement on this initiative.

“As necessary as it is [for America to adopt this requirement], it is unlikely that Congress would do so on its own,” he said. LeMunyon added that the bill has passed previously in the House but, at press time, its fate will rest on support in the Senate.

Virginia Sen. Walter Stosch (R-Henrico), the only CPA in the Virginia General Assembly and a VSCPA member, is a strong proponent of Virginia's constitutional requirement to balance its budget. Virginia is one of only nine states to enjoy a AAA bond rating. Stosch, who is chairman of the Senate Finance Committee, “attributes Virginia’s strong financial health to limiting spending to available revenues each year and having the fiscal discipline to set aside a rainy day fund during strong revenue growth years.

“Dealing with slow or no growth revenue years would result in major swings in Virginia’s ability to support ongoing spending requirements, such as public schools, without our rainy-day fund,” he said. “Since I share with most Americans a deep concern for the federal budgeting process and mounting deficits from the federal government spending more than available revenues each year, I would hope that our federal government would adopt Virginia’s balanced budget requirement and follow its sound fiscal accounting policies.”

provisions in their respective constitutions or laws that effectively prevent, over u

FISCAL responsibility

time, these governments from spending more than their revenues. While it is true that some states work around the edges and find creative ways of advancing spending initiatives, the combination of state laws, aggressive accounting standards that require full disclosure of debts and obligations and the application of critical assessments by the bond rating agencies have, in substance, resulted in state governments operating under a balanced budget requirement.

However, state governments are very dependent on the federal government. Federal revenues flowing directly to Virginia in 2012 constituted $13.5 billion, or 27.1 percent of total Commonwealth revenues from all sources. This dependency balloons to 35.4 percent of Virginia GDP when you add in procurements of goods and services, federal employee wages and social insurance benefits.

States are so dependent on the federal government that if the federal government catches a cold, the states will sneeze. The open question is, therefore, will not state legislatures and the nation’s governors seek to exert shared leadership with Congress to restore the nation’s fiscal strength, thereby acting in their own self-interests?

ILLUSTRATIVE ARGUMENTS OPPOSING A BBA

While testifying to the House Judiciary Committee in 2014, Brookings Institution

Senior Fellow Henry J. Aaron noted five main reasons a BBA should not be passed or implemented (as quoted from a Brookings release):

1 Budget deficits are sometimes beneficial, not just in times of war but also during economic slowdowns. Had there been a BBA during the recent financial crisis, Congress would have needed to either (increase) taxes or cut spending that would have doubled unemployment and slashed GDP.

2 Requiring a super-majority to raise the debt ceiling or to run a deficit “is a veritable summons to political extortion by an intransigent minority” and could trigger a constitutional crisis.

3 The deficit and debt ceiling provisions of proposed legislation would prevent access to the Social Security and Medicare Hospital Insurance trust funds to sustain benefits unless there was a three-fifths majority in both houses of Congress. A similar problem could stymie important government activities vital to combat financial panic just when they are most needed.

4 Congress, constrained by a BBA but anxious to accomplish some agreed-upon objective, would “inevitably resort to all manner of devices that would circumvent those limits in ways that led to inefficient

government,” such as spending disguised as tax credits (seeming to lower both spending and revenues) or unfunded mandates. “No one interested in good and honest government should increase incentives for elected officials to find devious ways to accomplish objectives clear to them.”

5 It is unwise to lock the Constitution (with) an economic variable of limiting government spending to 18 or 20 percent of economic output since that level may need to change based on facts and circumstances.

ILLUSTRATIVE ARGUMENTS SUPPORTING A BBA

1 Federal spending is out of control. When the government’s own auditors say we are on an unsustainable fiscal path, we should listen. Total liabilities equal to nearly a quarter-million dollars for every man, woman and child in America should scare everyone into wanting to change the current path. Budget deficits may “sometimes” be beneficial, but running deficits continuously is not. Perhaps Congress can structure a “rainy-day fund” to be built up during years with a surplus, in order to be drawn down during cyclical downturns, much the way Virginia has benefitted recently from its rainy-day fund. u

“I sincerely believe … that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.”

— Thomas Jefferson to John Tyler, 1816

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FISCAL responsibility

2Some type of super-majority vote to override a deficit is needed, or it will be too easy for Congress to approve annual overrides. What that threshold should be can be debated. When it takes Congress more than $60 billion to approve a $30 billion request to aid victims of Hurricane Sandy, some could say that extortion is already alive and well under the current structure.

3 Social insurance programs like Social Security and Medicare, including funds owed to the trust funds, represent almost 70 percent of total debt and liabilities and they must be part of the discussion.

Focusing only on the other 30 percent, and thinking you can solve the problem, seems naïve at best. Some of the 30 percent is mandatory like debt service, or is critical for defense and education.

A BBA is perhaps the best chance to avoid demagoguing anyone who wants to address social insurance fiscal instability and discuss solutions such as meanstesting some benefits, using a more proper cost of living adjustment and increasing age qualifications in line with increases in longevity.

4

Today, Congressional spending plans are “scored” based on current law. So a bill is passed for one year with higher spending that reverts back to former lower levels for the next nine (out of the 10-year projection of costs). A year later, the higher spending is approved for one more year (like the annual “Doc Fix” that prevents Medicare reimbursements to physicians from dropping nearly 20 percent.) It would not be a stretch to say the current system allows politicians to fib with statistics, yet it is widely accepted under the current structure.

5 Surveys show that Americans continue to support a BBA. In his book, “A More Perfect Constitution,” Larry Sabato, director of The Center for Politics, a non-partisan unit of the University of

Virginia, cited a survey that stated more than 80 percent of Americans supported a BBA; however the survey showed support dropped to only 30 percent of respondents who believe a BBA will reduce Social Security benefits. Apparently, survey participants choose to ignore the fact that unless something is done, current law mandates that Social Security and Medicare benefits be cut when the trust funds are depleted. A Jan. 1, 2013, trustee report indicated that Social Security is projected to be cut 23 percent by 2033, and Medicare Part A by 13 percent by 2026.

6 Congress has shown itself incapable of controlling spending, as evidenced by only a handful out of the last 50 years showing a surplus. We elect members to represent us, yet there is almost no one looking out for the overall national fiscal interest. Why do we build tanks the Army does not want? Simple. Those tanks are built in some Congressman’s district, and other defense items are built in other districts, so everyone gets what they want — except the Army, which did not want them in the first place and would have, perhaps, spent funds on items it really did need.

7 Time is of the essence. A BBA will take many years to take effect. Ten more states need to call for a BBA, a convention needs to take place and consensus on a bill reached, and then 38 states need to approve the bill presented out of the convention. A change of this significance would likely allow for a phase-in over a decade or more in order to permit the economy and stakeholders to adjust and to debate, within Congress, how specific reforms should occur.

CONCLUSION

The convening of a Constitutional Convention for the purpose of considering a BBA will ensure a vigorous debate on the fiscal challenges facing our nation, a debate that will be undertaken by those representatives

of the people who are closest to the everyday concerns of citizens — representatives from 50 state legislatures. These representatives will be guided by the experience of having to keep their respective states in fiscal balance and the sobering responsibility of weighing the competing needs of the citizens they represent. They will be shielded, to a great extent, from lobbying pressure and the economics of retaining one’s seat in Congress.

It is the conduct of that debate, regardless of the ultimate outcome, that is essential to our nation at this point in U.S. history. While the founders of our nation might never have imagined that the Congress would willingly place the nation in its current state of fiscal jeopardy, they were wise enough to anticipate that the states — out of concern, self-interest and a desire to be within a strong, sustainable national government — would utilize Article V of the Constitution to protect our national government from its fiscal excesses. n

ED MAZUR, CPA, is a member of the VSCPA, former State Comptroller of Virginia and former Controller of the Office of Federal Financial Management in OMB. mazur2309@verizon.net connect.vscpa.com/EdMazur

This article reflects the thoughts and opinions of the authors only, and does not represent a position of Disclosures magazine or the Virginia Society of CPAs.

TOM VISOTSKY, CPA, is a VSCPA past president and is finance and business manager for First Baptist Church in Richmond. tvisotsky@comcast.net connect.vscpa.com/TomVisotsky

VSCPA

A day downtown

Dozens of VSCPA members and several staff joined forces in downtown Richmond on Tuesday, Jan. 20, for the 2015 edition of CPA Assembly Day. They met with Virginia legislators to discuss proposed legislation on issues affecting Virginia CPAs and taxpayers, including:

>> Repealing the debit card mandate for Virginia income tax refunds

>> Tax conformity

>> Updates to conform the Virginia accounting statutes with national standards

>> The one-credit economics and financial literacy high school graduation requirement (see page 14)

Attendees also shared their expertise on other economic and financial issues and attended the legislative session, where they were recognized from the floor in the House of Delegates and the Senate.

Thanks to everyone who attended CPA Assembly Day or participated virtually! n

>> SESSION UPDATES

Here’s where the issues listed above stood at press time:

Paper check option for income tax refunds: HB 1286 passed the House on Feb. 10. SB 701 passed the Senate on Jan. 26 and the House on Feb. 13.

Tax conformity: Tax conformity legislation was signed by Gov. Terry McAuliffe on Feb. 16.

Board of Accountancy technical updates: SB 1125 passed the Senate on Jan. 23 and a House General Laws subcommittee on Feb. 12.

Threats to financial literacy graduation requirement: HB 1619, 1627 and 2088 were all defeated in various House Education committees and subcommittees. n

1. Brad Nicklin, CPA (right), meets with Del. Tag Greason (R-Ashburn).

2. Jamie Walker, CPA (right), and VSCPA Academic & Career Development Director Molly Wash, CAE (middle), meet with Courtney Campbell, a legislative aide for Del. Sam Rasoul (D-Roanoke).

3. Lisa Germano, CPA (left), and VSCPA Executive Vice President Maureen Dingus, CAE (right), meet with Del. Manoli Loupassi (R-Richmond). n

April is Financial Literacy Month

The VSCPA and Virginians across the Commonwealth will focus on financial literacy throughout the month of April during the annual Virginia Financial Literacy Month, as proclaimed by Virginia Gov. Terry McAuliffe. The VSCPA offers numerous ways to help Virginians sharpen their financial literacy, including its award-winning Financial Fitness initiative. Here are some ways the VSCPA will encourage wise money management during Financial Literacy Month:

>> ASK A CPA EMAIL PROGRAM: Virginia CPAs will answer questions from the public via emails submitted at FinancialFitness.org. Free advice is available from experts on financial planning, tax planning, military taxes and disaster recovery. Questions will be answered by volunteer VSCPA members within three business days. Members from across the state are encouraged to participate.

>> FINANCIAL FITNESS WORKSHOP: The VSCPA will hold a free financial fitness workshop for the public. The date and topic of the workshop were not confirmed when this issue went to press. Check www.FinancialFitness.org for updates.

>> MEDIA RELATIONS: A commemorative Financial Fitness logo will be available, and the VSCPA will conduct media relations around the state to promote money management topics, as well as tie in Financial Fitness topics to the @VSCPANews and @FinancialFit Twitter feeds.

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

Visotsky to dash for cash

TOM VISOTSKY, CPA, a VSCPA past president, was selected in a random drawing as the AT&T Dash for the Cash competitor at the Monument Avenue 10K on March 28 in Richmond. He will get a head start on the course based on his time in last year’s race, and if he can cross the finish line ahead of the pack, he’ll get a $2,500 prize. He plans to use this opportunity to raise awareness for Massey Cancer. Visit www.vscpa.com/ TomVisotsky for a full profile. n

>> VSCPA ANNUAL MEETING AND BOARD OF DIRECTORS

The VSCPA’s Annual Meeting will be held Monday, May 11, 2015, at 2:50 p.m. at the Williamsburg Lodge. During the meeting, the Nominations Committee will present the following nominated members for election as 2015–2016 officers and directors:

CHAIR

Lisa Germano, CPA

CHAIR-ELECT

Jim Phillips, CPA

VICE CHAIRS

Marc Filer, CPA

Staci Henshaw, CPA

Victoria Jones, CPA Gary Thomson, CPA

AT-LARGE DIRECTORS

Tara Adams, CPA

Dian Calderone, CPA Henry Davis III, CPA Jaime Lynn Dernar, CPA Jennifer Duff, CPA Richard Groover, CPA Bill Hardy, CPA Brad Haun, CPA Jill Mitchell Mike Wagner, CPA n

APPLICATION DEADLINE APPROACHING FOR 2015 LEADERS’ INSTITUTE

College educators: the VSCPA is seeking applicants for its 2015 Leaders’ Institute, set for June 19–20 at the University of Richmond. Encourage your students to apply!

The Leaders’ Institute is a two-day, all-expenses-paid program developed by the VSCPA and founding sponsor Baker Tilly that seeks to develop future leaders in the CPA profession. Students will gain access to potential employers, possible mentors and networking opportunities.

“I started an internship in retirement plan services at Dixon Hughes Goodman, and I really like it,” said Karen Fazzini of Old Dominion University, a 2014 Leaders’ Institute attendee. “I feel like so much has happened in the last six months, and it’s all due in part to the Leaders’ Institute.”

Applications are due April 17. Visit www.vscpa.com/ LeadersInstitute to apply. n

Peters recieves VSAE Award of Excellence Staff news

VSCPA President & CEO

STEPHANIE PETERS, CAE, was presented the CEO Award of Excellence by the Virginia Society of Association Executives (VSAE) on Dec. 5, 2014. The CEO Award of Excellence is given to an outstanding association professional who has been nominated by her peers in recognition of her leadership and achievement.

Peters has served VSAE and the association community for many years. Recognized as a thoughtful professional with a strong work ethic, she has held many volunteer leadership positions at VSAE, most notably as president in 2012–2013. Her quiet, understated approach to leadership and consensus building was critical to VSAE becoming the strong organization it is today.

“I am humbled to be recognized by my peers in the association community,” Peters said. “VSAE is a wonderful organization full of hardworking, dedicated professionals. It was a wonderful surprise to receive this honor.” n

OPEN VOLUNTEER SPOTS

VSCPA is now

volunteers for various

at different times throughout the year,

some

are open year-round. The

are currently

Top: David Bass, Chip Knighton, Laura Cobb. Middle: Julia Henderson, Talley King, Emily Walker, CAE. Bottom: Catherine Meehan, Richard Gordon.

DAVID BASS has been promoted to VSCPA public relations and communications director and CHIP KNIGHTON has been promoted to communications manager. LAURA COBB has been promoted to member engagement manager. JULIA HENDERSON and TALLEY KING have each been promoted to marketing manager.

Government Affairs Director EMILY WALKER, CAE, celebrates her 12th anniversary with the VSCPA on April 1.

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

Education Manager RICHARD GORDON marks his third anniversary with the Society on March 12.

Marketing & Communications Director JENNY CHU, CAE, has left the VSCPA. Good luck, Jenny! n

Congratulations to the following members!

NEW HIRES >>

VANDANA AZHAR has joined Gross, Mendelsohn & Associates as a staff accountant in the firm’s Fairfax office.

ZACH FELDER has joined Mitchell, Wiggins & Co. as a staff accountant in the Richmond office.

CAROLYN IRWIN, CPA, has joined Heritage Wealth Advisors in Fredericksburg as a tax planning and compliance expert.

Fairfax firm Homes, Lowry, Horn & Johnson has hired JILL LINDEN, CPA, as a manager and TERRI ROBBINS, CPA, as a supervisor.

TANISHA McNEIL and MICHAEL YANKOSKI have joined Norfolk firm McPhillips, Roberts & Deans as staff accountants in the firm’s assurance practice.

JEAN MOSES, CPA, has joined Malvin, Riggins & Co. as a director in the Newport News office.

PROMOTIONS >>

GREG AMOROSSO and NIKKI

CARCATERRA, CPA, have been promoted to senior staff accountant at McPhillips, Roberts & Deans in Norfolk.

Roanoke firm Foti, Flynn, Lowen & Co. has promoted DAVID BOOTH, CPA, and ETHAN COOK, CPA, to shareholders.

Dixon Hughes Goodman has promoted BRYAN CAMPBELL, CPA, to senior manager and CHRISTINE DUNCAN, CPA, ALLISON GUNTER, CPA, CRYSTAL PLUM, CPA, and JENNY SUTTON, CPA, to manager in the Norfolk office and DAVID HALL, CPA, and YELENA LARATTA, CPA, to manager in the Virginia Beach office.

DAVID DAMIANI, CPA, HARVEY JOHNSON, CPA, and NICK PERRINE, CPA, have been elected as partners at PBMares.

MICHAEL FLEENOR, CPA, has been named partner at Dent K. Burk Associates in Bristol.

Alexandria firm Kositzka, Wicks & Co. has promoted EMILY JACKSON, CPA, to supervisor and CONOR O’BRIEN, CPA, to senior.

BRIAN PLUM, CPA, has been named president and CEO of Blue Ridge Bankshares in Luray.

STEVE SAWYER, CPA, has been promoted to manager at Mitchell, Wiggins & Co. in Richmond.

APPOINTMENTS & AWARDS >>

CHIP HELME, CPA, of Thompson Greenspon in Fairfax, has been elected chair of CPAmerica’s board of directors.

OLIVIA HUTTON, CPA, of Yount, Hyde & Barbour in Winchester, has been named to the board of directors of the Shenandoah County Fair Association. She is the first female director in board history.

KAREN JACKSON, CPA, and RODNEY JACKSON, CPA, were named principals at Abingdon firm Hicok, Fern & Company.

GARY LEE, CPA, of Yount, Hyde & Barbour in Culpeper, received the L.B. Henretty Memorial Outstanding Citizen of the Year Award from the Culpeper Chamber of Commerce.

CRAIG STANLEY, CPA, of the Summit Group in Virginia Beach, was named to Inside Business’s Top 40 Under 40 in Hampton Roads. n

FIND THE CPE TEST ONLINE

Visit www.vscpa.com/public/ catalog. Choose the “On Demand” tab to find the exam and others from previous Disclosures issues.

David Booth, CPA, Ethan Cook, CPA, Chip Helme, CPA, Michael Fleenor, CPA, Harvey Johnson, CPA.

FIRM NEWS >>

CHERRY BEKAERT has been honored as one of Inside Business’s Roaring 20, highlighting the fastest-growing companies in Hampton Roads.

Gaithersburg, Md., firm DeLEON & STANG was named Small Business of the Year for Volunteerism by the Corporate Volunteer Council of Montgomery County.

Abingdon firm HICOK, FERN, BROWN & GARCIA has changed its name to HICOK, FERN & CO

Norfolk firm McPHILLIPS, ROBERTS & DEANS was named to Inside Public Accounting’s “Best of the Best” list for the third consecutive year.

MERGERS & ACQUISITIONS >>

Norfolk firm CRAVER, GREEN & CO. has merged with McPHILLIPS, ROBERTS & DEANS

ELLIOTT DAVIS has merged with DECOSIMO to form ELLIOTT DAVIS DECOSIMO

Fairfax firm VOGEL, DEAN & LILL has merged with Maryland firm GROSS, MENDELSOHN & ASSOCIATES n

We mourn the loss of:

CHARLES GAMBILL III, CPA, of Richmond. A partner at Gambill & Company, he served in as a cryptologic technician in the U.S. Navy and studied at the University of Virginia, the University of Pennsylvania and Virginia Commonwealth University. He was treasurer of Gesang-Verein Virginia.

DURRELL MILLS, CPA, a VSCPA life member from Suffolk. A graduate of East Carolina University, he was a shareholder in Eggleston Smith after serving as partner at Mills & Cavender. He was active in numerous organizations, including the Suffolk Rotary Club, Suffolk Chamber of Commerce, Suffolk Redevelopment and Housing Authority, EastoverWilroy Ruritan Club, Suffolk Education Foundation and Wilroy Baptist Church, where he served as deacon and was chairman of the finance committee.

KATHLEEN O’DONNELL, CPA, of Richmond. She was controller for the Jewish Federation of Richmond.

LINDA THOMAS, CPA, of Ashland. She and her husband, Mike, a fellow VSCPA member, operated Thomas & Thomas, CPAs, in Glen Allen. n

>> THE VSCPA’S NEWEST CPAs

JENNIFER ADAMS JONATHAN ADCOCK JONATHAN BAILEY MATTHEW BARNHART ANDREW BOWEN STEPHANIE BUTLER TROY CONSTANCE MAUDE CUGNON JESSICA D’ANTONI CHRISTOPHER DEBLANC YAN FENG SARAH FRENCH LARA GORI AMANDA HALSEY ANDREW HART CHIA SHAN HO MICHAEL HORNE THOMAS HORTON JORDAN KEITELMAN YOUNGJE KO MEREDITH LITTLE MEREDITH MALPASS JACOB MORAN MICHELLE PARTREA ANTHONY PENG JACOB REICHOW NATHANIEL RUSSELL MARY SCOTT WEISAM SHEIKHI PETER SHORTSLEEVES ERIC SLIVKA BRIAN SOULE JOSEPH STARZYK TODD VERNON MICHAEL VILLAROSA ALAN WAKEFIELD ANNE WHITEHURST CLAIRE WILLIAMS ANNA XIE JIE ZHOU MICHAEL ZORNJAK

List from December and January. Compiled Jan. 23, 2014. n

VSCPA members and staff pose outside the General Assembly office building before taking in the legislative session at the Capitol at CPA Assembly Day on Jan. 20.

Ryan Losi, CPA, at Getting Ready for Busy Season: A Guide to New Forms, Filing Issues, and Other Critical Developments on Jan. 7 at the Richmond CPA Center.

David Vaughan, CPA, and Grant Leister, CPA, at TaxCon 2014 at the Richmond Marriott on Dec. 2, 2014.

From left, Elsie Rose, CPA, VSCPA Public Relations & Communications Director David Bass and Nick Harrison, CPA, at the Virginia FREE Luncheon at the Jefferson Hotel in Richmond on Dec. 9, 2014.

Carl Jones, CPA, and Dana Hylton at TaxCon 2014.

VSCPA 100% Member Firms

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

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

A.F. Thomas & Associates, PC

Anderson & Anderson CPAs, PC

Anderson & Reed, LLP

Anderson, White & Company, PC, CPAs Andrews, Barwick & Lee, PC

Barnes, Brock, Cornwell & Heilman PLC

Beale & Curran, PC

Beck & Company, CPAs, PC Bennett, Atkinson & Associates, PC

Biegler & Associates, PC

BlackHeath Company, PLC

Bowling, Franklin, & Co., LLP

Boyce, Spady & Moore PLC

Britt & Peak, PC, CPAs

Bruce, Renner & Company, PLC

Bullock & Associates, PC

Burdette Smith & Bish LLC

Burgess & Co., PC, CPAs Cameron, Moberly & Hamrick, PC

Charles H. McCoy Jr., Inc.

Charles S. Pearson Jr., CPA

Charles W. Snader, PC

Cherie A. James, CPA, PLC

Chesapeake Accounting Group PC

Christopher A. Enright, CPA, PLC

Cole & Associates CPAs, LLC

Coley, Eubank & Company, PC

Corbin & Company, PC

Craver, Green and Company, PLC

Creedle, Jones and Alga, PC

CST Group, CPAs, PC

Dalal & Company

David L. Zimmer CPA PC

Diane Y. Smith CPA PC

Didawick & Company, PC

Digital Benefit Advisors

Donald R. Pinkleton, CPA

Donald W. Coleman, CPA, Inc., PC

Douglas L. Thompson, CPA PLLC

Duvall Wheeler, LLP

Eggleston & Eggleston, PC

Elmore, Hupp & Company, PLC

Everett O. Winn, CPA, PLC

First Capital Bank Fritz & Company, PC

Garland & Garland, CPAs, PC

Garris and Company, PC

G.L. Roberson CPA, PLLC

Graham and Poirot, CPAs, LLC

Gregg & Bailey, PC

Gregory & Associates, PLLC

Gurman & Company, PLLC

Hantzmon Wiebel Harris, Hardy, & Johnstone, PC Harris, Harvey, Neal & Co., LLP

Henley & Henley, PC

Henry R. Hortenstine III, CPA, PC

Hogan & Reed, PC, CPAs Holland & Brown LLP

Homes, Lowry, Horn & Johnson, Ltd.

Honeycutt & McGuire CPAs Hottel & Willis, PC Hughes & Basye, PC Hunt & Calderone, PC, CPAs

J. Goddin & Associates, PC

Jay E. Reiner CPA PLLC

John M. Watkins, CPA Johnson, Equi & Co., PLC

Jones, Adams & Delp, PC Jones & Company CPA, LLC

Jones, Madden & Council, PLC Jones & McIntyre, PLLC

JS Morlu, LLC

Katherine L. Foley CPA, PC Keiter

Kositzka, Wicks & Company Kris McMackin CPA

L.P. Martin & Company, PC Lane & Associates, PC Larry D. Greene CPA PC

Lauren V. Wolcott, CPA, PC Lent & Hawthorne, PC M. Lee Winder & Associates, PC Maida Development Company

Mallard & Mallard CPAs, LLC

Malvin, Riggins & Company, PC Martin, Beachy & Arehart, PLLC McPhillips Roberts & Deans PLC

Michael B. Cooke, CPA, PC Michael R. Anliker, CPA, PC Mitchell, Wiggins & Company, LLP Moss & Riggs, PLLC Murray, Jonson, White & Associates, Ltd., PC

Nicholas, Jones & Co., PLC Norris & Associates, PC

PBMares, LLP

R.P. Willis, PC

R.T. McCalpin & Associates

Renner & Company, CPAs, PC Ritchie, Withers & Masincup PC

Robb Scott Bradshaw & Rawls, PC

Robinson Consulting Group

Roger L. Handy, PC Rubin, Koehmstedt & Nadler, PLC Russell, Evans & Thompson, PLLC Rutherford & Johnson, PC Salter & Associates, PC

Saunders, Matthews & Pfitzner, PLLC

Scheulen, Patchett & Edwards, PC

Sells Hogg & Associates CPAs, PC Sherman, Spero & Safarino, Ltd. Spencer, Hager & Mosdell, PC Spitler, Stephens & Associates PLLC

Stephen Merritt CPA, PC

Stephen F. Perry, PC

Stephen T. Shickel, CPA, PLC

Steve Guy & Associates, PC

Steve Walls & Associates, PLLC

Stokes Office Solutions LLC

Strickland & Jones, PC Sullivan, Andrews & Taylor PC Terry L. Jones, CPA, LLC

The Cahill Group, LLC

The Davidson Group, PC

The Foley Group, Ltd.

Thomas E. Fraley, CPA

Thompson Greenspon Tongelidis Consulting, LLC

Updegrove, Combs & McDaniel, PLC

Verus Financial Partners

Wall, Einhorn & Chernitzer

W.D. Sanders & Company, PC Wells, Coleman & Company, LLP Wilkinson Consulting & CPA PLC

William B. May Jr., CPA, PC

Wineholt & Associates, PC

Yancey, Miller & Bowman, CPAs PLLC Yount, Hyde & Barbour, PC

Compiled Jan. 16, 2015. Check www.vscpa.com/100Percent for a complete list. n

VSCPA educational foundation

Giving Tuesday success!

Thank you to everyone who made our first VSCPA Educational Foundation Giving Tuesday campaign such a success! Because of your support, we are on our way to reach our goal of $79,000 to support our scholars and programs. When you support the VSCPA Educational Foundation, your gift makes a lasting impact on our scholars. Below, they’ve gathered to say a personal thank you! n

GROWTH, SALES & ACQUISITIONS

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Looking for a change of scenery?

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COMMUNICATION AND IMPROVING THE COMMUNITY >>

Two minutes with John and Joan Renner

John and Joan Renner are a husband-andwife team who work together at Renner & Company, CPAs, in Alexandria. John provides tax, accounting and advisory services to professional practices, government contractors, manufacturers and others, while Joan leads the firm’s services to nonprofits. They were named Living Legends of Alexandria in 2010 for their service to the community. They are active members of the Rotary Club of Alexandria, where Joan currently serves as president and which named them joint Rotarians of the Year in 2009. They are the only husband and wife to have both served as chair of the Alexandria Chamber of Commerce.

I AM PASSIONATE ABOUT… Helping make Alexandria a better city by encouraging a vibrant business community. — John

PEOPLE DON’T KNOW THIS, BUT…

I am a special deputy assistant to the fire chief. — John

I love snorkeling. I’m proud of my barracuda photo. — Joan

IF I WEREN’T AN ACCOUNTANT, I WOULD BE… A ballet dancer. I grew up as a serious ballet student. — Joan

MY ADVICE TO FELLOW CPAs IS… Listen to your clients, and then explain things in their language. — John

I NEVER LEAVE HOME WITHOUT… My iPad. — Joan

I WISH CPAs KNEW… How to listen, how to communicate and how to relate to people. — John

I’M A CPA BECAUSE… I love consulting, helping people and using my skills to make our community a better place. — John I can use my skills and knowledge to make a difference in the world. — Joan n

JOHN AND JOAN RENNER, CPAs>>

A married couple dedicated to making Alexandria a better place

what the CGMA® designation stands for

PRSRT

Change service requested