Disclosures: September/October 2016

BROUGHT TO YOU BY THE VIRGINIA SOCIETY OF CPAs I SEPTEMBER/OCTOBER 2016 I VOL. 29 NO. 5 I VSCPA.COM

Social media marketing

Divorce taxation

Educator roundtable

KEEP IT SIMPLE Kanban for accounting firms page 14

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Intelligent Tax Planning to Combat Increasing Federal and State Taxes 62 nd Annual

W I L L I A M & M A RY TA X CON F ER ENCE November 9–11, 2016

Es tim a ted 21 hours CP E ( 50-minut e hours) .

presented by

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Re g is tr a tion f or ms available at l aw.wm.ed u/taxconf er enc e or by email at wmtax@wm.ed u.

INSIDE this issue 

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Intr

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ng i c u d o

KnowledgeNOW 

Featured Speakers 

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Jared Weiner Executive Vice President and Chief Strategy Officer at The Future Hunters

Patrick Fitzgerald CPA, CISA, CGFM, Former DCAA Director, Former U.S. Army Auditor General

Richard Keevey Senior Policy Fellow at Rutgers University, Lecturer at Princeton University

David Walker

Former U.S. Comptroller

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NOV. 10–11, 2016 THE HYATT REGENCY RESTON, VA

CONTENTS

COVER STORY >>

A Kanban board in its simplest form is a visual representation of a ‘to-do’ list that has three columns: to-do, doing and done. Learn how you can use the principles of Kanban to help your office run more smoothly.

ARTICLES

FEATURES KANBAN FOR ACCOUNTING FIRMS

DEVELOPMENT 14

Through a simple process, Kanban can increase efficiency, reduce mistakes, identify and correct bottlenecks and communicate progress.

MARKETING MATTERS

How are educators around Virginia preparing their accounting students for their careers? Teachers discuss technology, the CPA Exam and more.

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Social media marketing

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Navigate your CPE busy season

Aon CAMICO Beth A. Berk, CPA Digital Benefit Advisors Keiter Nationwide Poe Group Advisors William & Mary Law School

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When clients get divorced, they are on a roller coaster ride of legal and tax issues.

CPAs can play a significant role in helping clients navigate the challenges.

TEACHER TALK: EDUCATOR ROUNDTABLE

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Volunteering for a chapter

CPE UPS AND DOWNS: DIVORCE TAXATION

AD INDEX

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SECTIONS BACKTALK

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PRESIDENT’S PERSPECTIVE

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LINE ITEMS

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DATA DRAFT

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VSCPA NEWS

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CLASSIFIEDS

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I AM THE VSCPA

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

Our mission is to enhance the success of CPAs.

DISCLOSURES.VSCPA.COM

VIRGINIA SOCIETY OF CPAs

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

BACKTALK you said it

From Facebook

disclosures disclosures.vscpa.com

This is one of the best programs I’ve been to and I even got a mentor!!!

Thank you all so much. — On the Leaders’ Institute ELIZABETH OWUSUWAA Norfolk

EDITORIAL STAFF Jill Edmonds Managing Editor disclosures@vscpa.com

VIA FACEBOOK >>

From the

Chip Knighton Contributing Editor cknighton@vscpa.com

Good work! Miss those days. — On the VSCPA Board of Directors’ strategic retreat in June

TWITTERSPHERE >>

David Bass Public Relations & Communications Director dbass@vscpa.com

EDITORIAL TASK FORCE Olaf Barthelmai, CPA Adam Chaikin, CPA Cheri David, CPA Jennifer Eversole, CPA Keith Gray, CPA Genevieve Hancock Alesia Lewis, CPA Harold Martin Jr., CPA David Peters, CPA Mark Plostock, CPA Barbara Sukramani, CPA

COLETTE WILSON, CPA Fairfax

VIA INSTAGRAM >>

Congratulations to the winners of the VA CFO awards! — @OVERHOLTLORI We love #VACFOMonth! Our CFO Laura is always bringing her A+ game.

— @MINNIELAND_VA

Articles and advertising for future issues are due by 5 p.m. on the following dates: Sept. 1, 2016 Nov. 1, 2016 Jan. 2, 2017 March 1, 2017 May 1, 2017 July 5, 2017

#TBT to last year’s @VirginiaBiz #VACFOAWARDS. Excited to celebrate this year’s nominees tonight @JeffersonHotel!

— @VERO_GARABELLI

VSCPA student member Courtney Armistead (VCU 2016) joined us at the CPA Center for the Renewal Phonathon this year.

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

@VSCPANews, you did an excellent job w/ the recap PDFs of the Business & Industry Conference and Educators’ Symposium.

Thanks for sharing! — @PROFMITCHELL Definitely agree with this list — @TEDTalks that will inspire CPAs http://ow.ly/i1Y0301G7be. — @EKIMOFFCPA

DEADLINES

Nov./Dec. 2015 Jan./Feb. 2017 March/April 2017 May/June 2017 July/Aug. 2017 Sept./Oct. 2017

What does DHG Manager @RobCherryCRE think is the future of #accounting? Flexibility.

Read more via @VSCPANews: http:// ow.ly/3qrs302o4AN. — @RWHITE13908

CONNECT: connect.vscpa.com TWITTER: @VSCPANews, @FinancialFit LINKEDIN: tinyurl.com/VSCPALinkedInGroup FACEBOOK: facebook.com/VSCPA INSTAGRAM: 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 tweet,or blog something comment different or something altogether, different let usaltogether, know whatletyou’re us know talking what you’re about, how you talking feelabout, about how different you feel issues about affecting different CPAs issues and how affecting we can CPAs help. and how we can help.

PRESIDENT’S perspective

Testing what matters: The new CPA Exam One of the VSCPA’s top

priorities is to ensure the vitality of the CPA pipeline in Virginia and elsewhere. That’s why we provide scholarships to Virginia’s top accounting students, work closely with educators to make sure they’ve got the tools needed to prepare those students and provide resources and discounts for young accountants preparing for the CPA Exam.

For the youngest of those accountants and the students who will follow them into the profession, Exam prep — as well as that of the professors tasked with getting them ready — is about to change. Next April, the American Institute of CPAs (AICPA) will roll out the updated version of the CPA Exam.

Changes to the Exam obviously have profound effects on the future of the profession, and the VSCPA is at the forefront of making sure all affected members are prepared. The new Exam was the subject of the main session at the 2015 and 2016 VSCPA Educators’ Symposiums, held each June to help accounting professors keep abreast of changes in the profession.

And in the November/December issue of Disclosures, VSCPA members Gabriele Lingenfelter, CPA, and Phil Umansky, CPA, will write on how educators can teach to the new Exam more effectively.

Many things won’t change on the new Exam, including the basic level of competence assumed of the prospective CPA. As on previous incarnations of the Exam, the AICPA holds that a newly licensed CPA should have the knowledge and skills typically possessed by an accountant with two years of experience.

What’s different is the way that knowledge, and those skills, are assessed. Previous versions of the Exam were criticized for being too memorization-based. That’s a point that AICPA experts have hammered home over the last two years of the Educators’ Symposium.

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In 2015, presenter Richard Gallagher, CPA, of the AICPA Examinations Team, said “People want people to know more than a whole bunch of facts and how to regurgitate them.”

This June, AICPA Technical Manager Jessica Gray, CPA, said “You can’t test an analysis and evaluation with a multiple-choice question.”

So the AICPA has ramped up its use of task-based simulations, adding 12 of them across the four sections of the Exam. The increased use of simulations is intended to aid assessment of higher-order skills and tasks.

The AICPA’s analysis of the old Exam and its development of the new one was based largely on Bloom’s taxonomy, a set of hierarchical models used to organize educational learning objectives. Learning objectives for the Exam were slotted into four categories of ascending difficulty: >> Remembering and understanding: Perception and comprehension of knowledge

day-to-day jobs. After all, there’s a vested public interest in an accounting education preparing students to be effective stewards and watchdogs of the business community and the government.

The CPA Exam is the next step in that process.

The CPA credential shows that an accountant has gotten the proper education and been deemed worthy of entry into the profession.

The accounting industry is a largely selfregulating community that can’t operate effectively without the trust of the people it’s charged with protecting. Maintaining a challenging, but fair, CPA Exam is a crucial part of that regulatory process. When new CPAs are better equipped to do the vital job they’re tasked with, the credential becomes that much stronger, and everyone who takes pride in it benefits. n

>> Application: Demonstration of knowledge >> Analysis: Identification of relationships to determine causes and evidence supporting inferences >> Evaluation: Examination and use of judgment to draw conclusions

STEPHANIE PETERS, CAE, has served as president and CEO of the Virginia Society of CPAs since 2007.

The AICPA sought out help from subject matter experts in crafting and revamping questions, with the goal of getting input from people who use CPA skills to perform their

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speters@vscpa.com connect.vscpa.com/StephaniePeters @StephPeters

LINE items EXCELLENT EXCEL >>

Add chart element: Trendline As auditors and accountants,

IT’S HURRICANE SEASON >>

Prepare your clients Even though a disaster can strike at any time, Virginians often find themselves in the path of hurricanes during the fall. Financial readiness is an important part of planning, just like an evacuation plan. Last year, the American Institute of CPAs (AICPA), American Red Cross and National Endowment for Financial Education released a new guide, “Disasters and Financial Planning: A Guide for Preparedness and Recovery,” to help Americans craft plans that protect their property, income, assets and records.

we like information to be timely so that it is relevant. It’s hard to make decisions on old information. Recently a colleague provided me a table of dates for when certain information is issued annually. While all the dates were in an Excel table, it was difficult for me determine if there was a trend within the release dates. As a visual person, I wanted to see if I could graph the release dates, and with a few formulas and Excel’s charting tools, I came up with the following chart:

It’s easy to share this free resource with your clients.

Visit tinyurl.com/DisasterPrepGuide. n

COSO PROPOSES ERM FRAMEWORK UPDATES If you want to provide the Committee of Sponsoring Organizations of the Treadway Commission (COSO) with comments on its updated enterprise risk management (ERM) framework, now is the time. Back in October 2014, COSO announced a project to review and update the ERM — Integrated Framework. Companies’ managers and boards of directors use the framework to enhance their organizations’ abilities to manage uncertainty.

The revised framework, Enterprise Risk Management — Aligning Risk with Strategy and Performance, updates the core definitions of risk and ERM, as well as the components of ERM. It also introduces principles that reflect the evolution of ERM thinking and practices.

You can read the draft and its FAQ and provide comment

by Sept. 30, 2016, at coso.org.

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These are the steps that I took, should you want to develop your own similar visual analysis. To chart the release dates, I calculated the number of dates between the start of each calendar year and related release date using the ‘DAYS’ function. For example, if the release date of 6/9/2005 was in cell B2, I would enter 1/1/2005 in cell C2 with the formula DAYS(B2,C2) in cell D2 to calculate that the 2005 information was released 159 days into the calendar year. With the years in one column and the ‘number days into the calendar year the information is released’ in another column, I was able to highlight the data and “insert” a line chart. As you can see by the dotted line, my analysis did not end there. Under the Design ribbon, I clicked on the Add Chart Element button and selected Trendline followed by Linear Forecast. It is the Linear Forecast that allows the user to know that while the timeliness of the information is not consistent, it is trending in the right direction. n GEORGE D. STRUDGEON, CPA, CGFM, is an audit director at the Virginia Auditor of Public Accounts in Richmond. Email him if you have Excel topics you want him to cover. george.strudgeon@gmail.com connect.vscpa.com/GeorgeStrudgeon

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LINE items IRS INVESTIGATORS AT WORK >>

ID theft tax scheme halted in Richmond One of the top 10

national cases of identity theft and tax fraud was prosecuted in Richmond, according to the Internal Revenue Service (IRS) Criminal Investigation division. In August 2015, Eddie Blanchard of Miami was sentenced to 204 months in prison with three years of supervised release and ordered to pay $568,625 in restitution for his role in a stolen identity tax refund fraud scheme.

In the early part of 2012, Blanchard repeatedly traveled to Richmond with other criminals and used stolen personal identifying information to file hundreds of fraudulent tax returns through online tax preparation programs. The men claimed significant refunds on the fraudulent returns and requested the refunds be placed on pre-paid debit cards, which were later mailed to Richmond addresses selected by the conspirators. The scheme began to unravel when a Virginia police

officer encountered one of the men removing a box containing stolen identity information from a storage unit.

The case is an example of the major crackdown by the IRS on identity theft. In fiscal year 2015, the IRS initiated 776 identity theft-related investigations, resulting in 774 sentencings through Criminal Investigation enforcement efforts. n

FEDERALLY SPEAKING Top news from the Capitol and other national happenings…

WHAT WE’VE BEEN DOING

IRS RELEASES DEFERRED COMP PROPOSAL After a nine-year wait, the U.S. Internal Revenue Service (IRS) issued proposed regulations on deferred compensation plans of state and local governments and tax-exempt entities, with section 457(f) plans as a key focus. Find out more at irs.gov.

The VSCPA’s annual State of the VSCPA report is now online! The report details the activities of the VSCPA, the VSCPA Educational Foundation and the VSCPA Political Action Committee (VSCPA PAC) as we work toward our mission of supporting Virginia CPAs.

"PROTECT YOUR CLIENTS; PROTECT YOURSELF" CAMPAIGN The IRS has launched a new campaign called "Protect Your Clients; Protect Yourself" to encourage tax preparers to implement safeguards to protect clients from data theft. The program is an expansion of the Security Summit's 2015 "Taxes. Security.

Together." campaign, which sought to increase public awareness of identity theft. Fact Sheet 2016-23 summarizes the critical steps necessary to protect taxpayer information and refers preparers to IRS Publication 4557 (Safeguarding Taxpayer Data). Find the fact sheet at irs.gov/pub/irs-news/fs-16-23.pdf.

Visit vscpa.com/StateOfTheVSCPA to view the report as well as the VSCPA’s audited financial statements. n

SUMMERTIME TAX SCAMS

POTENTIAL EMPLOYER MANDATE PENALTIES FOR HEALTH CARE

The scammers were out in full force all summer long, duping taxpayers by using aggressive scare tactics, spoofing caller ID, using phish email and through many other ways. Scams cost victims more than $38 MILLION. Educate your clients on the tactics of scammers, and visit irs.gov for more details. n

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In an Information Letter, the IRS indicated that an employer mandate penalty under IRC Sec. 4980H could apply to an employer that develops a new policy restricting part-time and seasonal employees to no more than 29 hours per week and the employee works more than 29 hours of service in a week. The amount of the employer's potential liability is based on the number of employees who average 30 or more hours of service per week in a given month. Check out Information Letter 2016-0030 at irs.gov for more. n

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DATA draft

The CPA brand by the numbers CPAs inspire confidence and remain the most

highly regarded and trusted business professionals among business decision-makers and investors — and there are stats to back it up.

In 2015, the American Institute of CPAs (AICPA) commissioned its multi-constituency biennial research study to understand perceptions of the CPA brand, update insights from the 2013 brand study, measure progress against key brand metrics and guide strategy and plans. Here are some highlights: >> Among finance and business professionals, CPAs are ranked NO. 1 for high regard by business decision-makers and investors. Among all professionals, they are second only to physicians. This rank increased by 12 PERCENT over 2013 results. >> Business decision-makers’ satisfaction (very satisfied and somewhat satisfied) ranks very high among both internal (93 PERCENT) and external CPAs (90 PERCENT). Investors who work with CPAs are 97 PERCENT satisfied with their performance. >> Integrity and competency continue to be rated the top two CPA attributes by business decision-makers and investors.

Learn more about the research study in an AICPA blog post at tinyurl.com/CPABrandBlogPost. n

CANCELLED Commit the spelling of “cancelled” to memory because Virginians have problems spelling it, according to search research released by Google to determine the most-misspelled words in each state. Hey, it could be worse: “diarrhea” tops the list in more than one state. Other troublesome culprits around the country? Desert, leprechaun, tongue and cousin, to name a few. n

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CONSTRUCTING THE COMMONWEALTH Virginia ranked NO. 9 nationally in 2015 for development for office, industrial, warehouse and retail real estate, according to NAIOP, the commercial real estate development association. Fast facts about Virginia’s real estate development: >> New development supported 13,281 JOBS >> Development overall supported 34,482 JOBS >> Development contributed $2.5 BILLION to Virginia’s economy

Find the full study, with several appendices detailing development stats by state, at naiop.org. n

Affordable colleges in Virginia According to the Forbes list of this year’s 300 Best Value universities, the Commonwealth is chock full of affordable educational opportunities.

Eleven universities made the list of 300, and five made the top 50.

The Virginia universities among the top 50 were the University of Virginia (No. 19), the College of William and Mary (No. 22), Virginia Tech (No. 29), Washington and Lee University (No. 32) and Virginia Military Institute (No. 44). The other Virginia-based schools on the list were James Madison University (No. 99), the University of Richmond (No. 127), George Mason University (No. 180), the University of Mary Washington (No. 185), Hampden-Sydney College (No. 201) and Sweet Briar College (No. 298).

The No. 1 most-affordable school was the University of California, Berkeley. n

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PROFESSIONAL development

Why you should serve your CPA society: A chapter volunteer’s perspective

BY KEITH GRAY, CPA

I would be lying if I said

it was not a combination of eagerness and angst I felt as I sat across from a slightly intimidating partner gauging my interest in the opening for Roanoke Chapter vice president, which drove my decision to serve. I have never liked letting people down, and I was not about to start just a few months after moving to the Roanoke area.

In my defense, however, I possessed at least a sliver of a foundation on which to make this decision. I had always been intrigued with the state society in Alabama and was a member of its Huntsville Chapter until moving to Virginia three years ago, and moving a few states away only had the effect of adding one more publication (Disclosures) to my morning reading ritual. Even still, the day the partner presented me with the opportunity, I admittedly would have struggled to expound on the mission of state societies and their local counterparts. Further, what I could say on the matter would not have come out with much conviction.

But now, after two enjoyable years serving with the VSCPA’s Roanoke Chapter, I can provide some food for thought as to why you should get involved.

During my time as both president and vice president of the Chapter, I witnessed the Society’s impact on the profession at the local level.

Last year, we sponsored 20 hours of affordable CPE for our members through several chapter meetings and our 14th annual CPE event.

Not only were these events reasonably priced, but they provided a communal atmosphere for CPAs from all corners of the profession and with a variety of experience levels to converse on the latest issues affecting our profession, interact with trusted local professionals who teach our seminars or simply catch up on happenings since the last meeting, all while satisfying their CPE requirements.

During Student Night, the second of our Chapter’s annual events, we educated students through a speaker panel of experienced local practitioners and awarded $3,000 in scholarships to select students from colleges and universities located in the Chapter’s footprint — undoubtedly the most rewarding experience of the year. We hope to build on the momentum of the past year after recently installing three new officers, all of whom are capable of making this a reality.

Members routinely express their gratitude for a trusted source of informative CPE close to home and for the Chapter’s continual investment in young professionals as they face key decisions surrounding entrance into the profession, including which city or state

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they will call home. Over the course of the last two years, this gratitude shed light on what it means to “serve the profession” and rejuvenated my appreciation for the role local chapters play in the lives of CPAs. I would be remiss in failing to mention the professional benefits I received as an officer of the Roanoke Chapter. Most notably, I matured in my leadership ability. Local CPA chapters provide a chance for the young CPA to lead early in his or her career — an opening that can seem elusive at times, especially to those in large organizations. This experience, combined with unavoidable exposure to key individuals, sets chapter officers apart in the CPA community and in their respective organizations. From an employer’s perspective, an organization looking to develop leaders while reinforcing their support for the profession would be hard-pressed to find a more tailored opportunity for one of their team members.

In addition to leadership experience, serving inevitably brings with it direct access to many of the CPAs in the local community. However, I quickly discovered this network’s reach extends well beyond a single group sharing a certification or even the confines of a city. Chapter leaders are exposed to a statewide network that includes fellow CPAs, as well as professionals outside the CPA community. Whether through interaction with a financial professional from across the state looking to geographically expand his or her reach by speaking to the chapter, or collaborating with leaders from other local chapters at the VSCPA Leaders’ Summit, serving as a chapter officer will set in motion conversations, friendships and opportunities that would not have existed otherwise.

Officers are tasked with setting in motion these same opportunities for the chapter members they serve. As CPAs in the modern era, we can seemingly accomplish everything necessary to become a competent professional while comfortably seated in our office chairs. Assisting a local chapter to provide alternatives to this approach benefits both the officer as well as chapter members. CPAs can choose to lean on the aforementioned conveniences or we can unchain ourselves from the desk for reasons other than grabbing pages off the printer. Chapters are a refuge for the sedentary, as officers facilitate an environment that encourages any of the following actions during the course of a lunch hour: Meet an influencer or an up-and-coming member of the profession, gain insight into a practitioner’s niche, uncover other civic endeavors that value the skills of a CPA or establish yourself as an expert by teaching a seminar.

Of course, all of these benefits are accessible to members who choose

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PROFESSIONAL development

Serving inevitably brings direct access to many CPAs in the local community. to volunteer beyond their local chapters with the VSCPA itself, which offers countless opportunities to impact the profession on a broader scale. If you like to write, help plan the latest CPE seminars, educate the public or help determine the VSCPA’s position on legislative issues, there are places for you. You can find out more by logging into the website at vscpa.com/Volunteer.

profession as a whole. Similarly, I hope that’s what I’m accomplishing by writing this article — setting in motion the next wave of chapter officers. n

Though lost on me at the time, I now realize that receiving a college scholarship from the Alabama Society of CPAs sparked an interest in that society that ultimately played a part in the actions I’ve taken over the past two years in Roanoke. Further, when I look back over my career, I’m certain I will attribute serving as a local chapter officer to my success as a CPA and advisor to my clients. I hope that, as a chapter, we have sparked this same interest in college students and members alike, setting in motion a series of thoughts, decisions and actions that will ultimately lead to crafting better professionals and enhancing our

KEITH GRAY, CPA, is a tax consultant with Arlington Family Offices in Birmingham, Ala. He is former president and vice president of the VSCPA Roanoke Chapter and sits on the Disclosures Editorial Task Force. kgray@myafotax.com connect.vscpa.com/KeithGray

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Contact me today to see how I can save you money on your insurance.

Ronnie Shriner shriner@nationwide.com 2571 Homeview Dr Richmond VA 23294 Ronnie Shriner Insurance Agency Inc Phone: (877) 683-3364 Nationwide may make a financial contribution to this organization in return for the opportunity to market products and services to its members or customers. Products Underwritten by Nationwide Mutual Insurance Company and Affiliated Companies. Nationwide Lloyds and Nationwide Property & Casualty Companies (in TX). Home Office: Columbus, OH 43215. Subject to underwriting guidelines, review, and approval. *Vanishing Deductible is an optional feature. Annual credits subject to eligibility requirements. Max. credit: $500. Details and availability vary by state. Products and discounts not available to all persons in all states. Nationwide, Nationwide Insurance, the Nationwide framemark, On Your Side and Vanishing Deductible are service marks of Nationwide Mutual Insurance Company. © 2016 Nationwide Mutual Insurance Company AFO-0915AO (03/16)

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MARKETING matters

Social media marketing: Worth it?

BY DAVID R. PETERS, CPA

I read a blog post recently where the author

said social media platforms like Facebook and Twitter had become nothing more than another place for companies to shamelessly plug their products. While I am not yet willing to condemn these websites for abandoning their morals, I have to admit that my LinkedIn account looks more like a billboard for products and services now than it used to.

Social media has seemingly crossed a threshold in recent years from a place to interact with friends, family and colleagues to a more legitimate marketing channel. Companies have started hiring social media specialists, tweeting regularly and creating YouTube channels. With more than 27 percent of total U.S. internet time being spent on social networking sites, according to Hubspot.com, it is clear that social media represents a tremendous opportunity to interact with clients. However, the social media space is crowded and your clients’ attention spans are limited. Can social media be a viable part of your marketing mix?

In contrast to many marketing experts, I don’t prescribe social media as a cure for every business need. The numbers indicate that the effectiveness of any social media program depends on your target market, approach and timing.

NOT EVERYONE USES SOCIAL MEDIA EQUALLY A 2013 study by the Pew Research Institute found that 74 percent of people in the United States use social networking sites, which is high.

But before jumping on the bandwagon, you need to dig into the details.

This percentage is pulled upward by younger users. Use among older age segments has grown, but it is still only 65 percent for ages 50 to 64, and then 49 percent for those 65 or older. If your client base is more concentrated in older age segments, such as retirement planning clients, for example, the advantages of using social media become much less clear. If your social media efforts only reach about half your clients, you need to consider whether this is worth your time and marketing dollars.

NOT ALL SOCIAL MEDIA IS THE SAME

In spite of these overwhelming numbers, some experts have said that YouTube provides a better connection with clients. However, a recent

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TIMING IS EVERYTHING A recent study reported on the Forbes website suggests that posting to social media during commuting times (late afternoon) and dinner time will result in a higher chance of your post being read. Again, these findings highlight the importance of knowing your target client base. If you are targeting working people, posting in the middle of a weekday will be less effective than posting during the drive home. Have you ever been in a crowded elevator or bus during rush hour, and seen everyone looking at their Facebook page on their phones?

These considerations only touch the surface, but the overarching message is clear: Go to where your clients are! If your clients don’t use social media, you shouldn’t either. Success in social media is more a matter of figuring out which platforms your current and potential clients use and when they are most likely to be looking at them. It is less about being technically proficient, and more about simply knowing your client base. n

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

We tend to group social media together into one large category, yet Twitter, YouTube and Facebook are certainly not the same thing.

According to the 2016 Global Social Media Research Summary, people access Facebook around eight times per day; the Pew Research Center found the Facebook usage amount among adults is 71 percent.

Compare this to 28 percent usage of LinkedIn and 23 percent usage of Twitter, and it is clear that Facebook rules the social landscape.

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research study in Information & Management found that people generally learn more when they are actively engaged with the presenter in the video. In other words, the level of active interaction by the viewer makes video interaction higher quality, not necessarily the medium itself. Therefore, the effectiveness of video media is not guaranteed to be better. The bottom line in all of this is that companies need to consider which social media platforms their customers naturally use, as well as which platforms would be most appropriate for their message.

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connect.vscpa.com/DavidPeters carrollfinancial.com

The information discussed herein is general in nature and provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Nothing in this article constitutes an offer to sell or a solicitation of any offer to buy any type of securities. Registered Representative of and securities offered through Cetera Advisors Network, LLC, Member SIPC/FINRA. Advisory services offered through Carroll Financial Associates, Inc., a Registered Investment Advisor. Carroll Financial and Cetera Advisors Network, LLC are not affiliated.

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CPE

Navigate CPE busy season with ease >> Yellow Book: 80 hours every two years (24 hours in government subjects), with at least 20 hours per year That’s what you need to take. But in which state do you need to take it? The VSCPA and the VBOA sent a joint letter last year to all state boards of accountancy and state CPA societies explaining the issue of CPE reciprocity among substantially equivalent jurisdictions. The letter reads, in part: “Virginia has a longstanding practice of CPE reciprocity for dual and multi-state licensees. The VBOA applies the following practices related to CPE reciprocity: >> If the licensee’s principal place of business is Virginia, then the licensee must comply with Virginia’s CPE requirements.

VSCPA learning: Attendees listen to a presenter at the VSCPA Business & Industry Conference in May.

Children are back in school, the leaves are starting to turn and there’s just a hint of chill in the evening. It’s fall in Virginia, but just as importantly for your career development, it’s CPE season at the VSCPA. The vast majority of the VSCPA’s CPE opportunities come in our own “busy season” from September through December. That’s mostly to best align with you and your fellow members’ busy professional schedules, but it’s also because you’ve got until the end of the year to fulfill your CPE requirements for 2016, and we’re here to serve all of you — even the procrastinators.

As a reminder, here are the requirements every CPA with an active Virginia license must fulfill, with the exception of those CPAs who have requested and obtained Active — CPE Exempt status from the Virginia Board of Accountancy (VBOA). >> All CPAs: 120 hours in the past three years, with at least 20 hours per year, including the 2-hour Virginia-specific Ethics course

>> If the licensee’s principal place of business is in a substantially equivalent jurisdiction and the licensee holds a license of such substantially equivalent jurisdiction, then the licensee may claim a ‘Home State Exemption’ through the CPE Tracking System for Virginia CPE compliance. The licensee must have an ‘active’ CPA license in good standing in their principal place of business to qualify for the Home State Exemption.”

The Virginia-specific Ethics requirement follows similar guidelines, as detailed in VBOA regulation 18VAC5-22-90: “If the person holds the license of another state and Virginia is not the principal place of business in which he provides services to the public using the CPA title, the ethics course taken to comply with this subsection either shall conform with the requirements prescribed by the board or shall be an ethics course acceptable to the board of accountancy of another state in which the person holds a license.”

There’s an easy place to find all the CPE you need — the VSCPA. Visit vscpa.com/CPE to search our online course catalog. n

Ever wonder how the VSCPA’s conferences go from idea to event? We spoke with the chairs of the planning committees for the VSCPA’s five major conferences to talk about their work. Read more at vscpa.com/ConferenceCommitteeChairs.

>> CPAs in public practice who release or authorize the release of reports on attest & compilation services: 8 hours annually related to attest services or compilation services

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KANBAN FOR ACCOUNTING FIRMS:

Keep it visual to get things done

BY JENNIFER EVERSOLE, CPA

There is little doubt that the rules of business have changed. Because of technology and social media, clients drive business behavior more than ever before in history.

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Client satisfaction isn’t good enough anymore — client loyalty has become the holy grail of leading indicators to predict future financial performance.

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And, inefficient and ineffective processes directly affect those client loyalty scores.

Clients demand that the job be done completely, on time and correctly the first time, and they can often defect with the click of a mouse if they don’t perceive value in the services provided to them.

Businesses can gain distinct competitive advantages by finding better ways of doing things. Over time, processes can become overly complex to the point that people get lost in their own workflows causing some level of paralysis and inability to move forward.

Even firms that have processes that work reasonably well can have a difficult time managing their processes in a way that keeps up with client demands. One way to eliminate most of these organizational problems is to implement a lean methodology called Kanban to increase efficiency, reduce mistakes, identify and correct bottlenecks and communicate progress.

WHAT IS KANBAN? In the late 1940s, Taiichi Ohno, an industrial engineer at Toyota, took notice of the way supermarkets managed their inventory. Store clerks restocked shelves based on the store’s inventory, rather than the vendor’s supply.

It’s not until supply was running low on the shelves that more inventory was added. Using this just-in-time approach, Ohno developed the Kanban system to match inventory with demand and provide an all-around higher level of quality. Kanban is the Japanese word for “visual card.” At Toyota, workers use Kanban cards to mark steps in their process.

When the supply of work is low at one step in the process, a signal is sent to the ‘supplier’ of that process (the preceding step in the workflow) and more work is pulled to ensure just-in-time delivery of components.

Imagine that you work in an office that is always running out of coffee pods before the supply is replenished. Perhaps it is because nobody is notified that the supply is low, or because some people hoard the coffee at their

FIGURE 1: SIMPLE KANBAN BOARD

Respond to email

Financial projections

Complete coding course

Write a blog

Project wrap-up meeting Turn in billable hours

Research new software

New client proposal Setup Twitter account

desks. Now, imagine that, in an effort to never be without caffeine again, you implement a system where the available boxes of coffee pods are stacked up in a central location in the break room, and everyone is instructed that they can only take as many coffee pods as they can consume that day. There is a post-it note stuck to the last box of coffee pods instructing whomever opened that box to take the note to the office manager who then re-orders and stocks the kitchen shelves. You’ve just experienced a simplistic example of a Kanban system.

But Kanban’s applications in the world of knowledge work extend far beyond the break room. Most of us don’t work in silos anymore.

Workflows and processes that consist of many people and many steps are woven throughout our workdays. At any given time, an individual may be working on 20 tasks that span many projects. Likewise, a project may have hundreds of tasks assigned to 20 different people. With so many moving parts, it’s no wonder that keeping up with what’s going on with spreadsheets or email isn’t efficient. A Kanban board helps to distribute and prioritize work, communicate to the team

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and uncover workflow and process problems so that you can continuously improve your processes.

HOW DOES KANBAN WORK? A Kanban board in its simplest form is a visual representation of a ‘to-do’ list that has three columns: to-do, doing and done. You can make a Kanban board for you and/or your team using markers and sticky notes (see Figure 1).

Of course, there are also many electronic versions available where you drag and drop “cards” as steps in the workflow are completed.

Kanban boards can range from simple to complex, depending on your business needs.

You may choose to have high-level boards that give a big picture of what’s going on across the entire company and additional boards for projects or teams.

As a matter of fact, one of the most enticing features of Kanban is that it is doesn’t impose pre-set workflows or processes onto your business. Take, for example, a CPA firm auditing the internal controls of u

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David Anderson, a thought leader in managing effective technology development, is credited with the first implementation of a Kanban process for software development.

He identified six general practices and four principles of a successful Kanban implementation.

GENERAL PRACTICES OF KANBAN VISUALIZE THE WORKFLOW Marketers typically embrace visual content because 90 percent of information transmitted to the human brain is visual. Not only that, the brain processes visual information 60,000 times faster than text. Kanban takes full advantage of the brain’s visual nature by creating a “picture” of your work. It also helps you see the flow of work as it moves through the Kanban system. Bottlenecks become impossible to ignore because you can actually the see the cards stacking up in one column of the board. For example, tax return preparation is a process that consists of many steps with many people. When a client requests that a firm prepare their taxes, the workflow may look something like this: Scan documents  Prepare returns  Partner review  Return revisions  Partner review  Assemble returns  Partner signature  Client billing  Request client authorization and E-signature  File returns

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FIGURE 2: SAMPLE KANBAN BOARD SOC 1 DBS SOFTWARE

+ BACKLOG

service organizations. The audit team consists of partners, managers and staff accountants.

The firm can take their existing workflow and create a Kanban workflow template for each of its projects. When used in a team environment, cards can be assigned to individuals at each step of the way to create accountability for both the audit team and the client. Many virtual Kanban boards will also allow you to attach files to cards so that all of the information and documentation pertaining to the card is in one place and can be retrieved with just a click.

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CONTROL PLANNING

NEW CONTROLS



�

�

CONTROL REVIEW

IN REVIEW

READY FOR REVIEW

READY FOR APPROVAL

�

?

CONTROL DOC

READY FOR DOCUMENTATION

IN DOCUMENTATION

CONTROL OBJECTIVES IT 453

SJones

IT 444

IT.02 IT Logical Access OPS 447

SJones

DEV 455

IT.01 Transmission of Business Data

JSmith

DEV.01 Program Change Management

RKemp

OPS.01 New Client Onboarding CONTROL ACTIVITIES DEV 503

JSmith

DEV.01.01 Release Notes

IT 487

LScott

IT.02.02 Allow-any Rules OPS 475

DEV 501

JSmith

OPS 496

DEV.01.07 Development Unit Testing

RKemp

OPS.01.04 New Client Record

Figure 2 is a sample board showing of the first few steps of the process. A quick glance at the board lets you know immediately that returns are piling up waiting for partner review, causing a bottleneck in the process.

Armed with that knowledge, the workflow can immediately be improved, perhaps by replacing the first partner review with a peer review.

WORK-IN-PROGRESS LIMITS Multitasking kills productivity. Many studies have proven that the more people switch tasks, the less effective and more error-prone they are when completing work. Kanban helps eliminate these context-shifting penalties by limiting work-in-progress. Work is pulled through the system by available capacity, not pushed through based on supply. In other words, people finish what they are working on before starting something new. Increasing efficiency will ultimately reduce the time it takes for an item to travel through the Kanban system.

MANAGE FLOW

IT 453

•

LScott

IT.01.02 Secure File Transfer

systems provide data that allows you to analyze what is flowing through the system.

Virtual Kanban tools actually capture data points automatically as cards move through the workflow. Days to complete a task, lead time, wait time, rework time and throughput time all give you valuable information about what incremental changes are needed to improve the flow of work. This data is also predictive in nature, allowing you to forecast future performance.

MAKE PROCESS POLICIES EXPLICIT People working together on a team often incorrectly assume that they have the same ideas about things like project methodology, priorities and communication. And, they often find out about their differences the hard way after losing momentum and cohesiveness in the team.

The purpose of explicitly stating process policies is to be sure that everyone knows the “rules of the game.” Once everyone really understands how things work, the team can make decisions that move them in the right direction.

It’s all about continuous improvement. Kanban

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continuous improvement, which is a core tenet of Kanban. Further, the Kanban method encourages the use of a scientific approach to implement continuous, incremental and evolutionary changes. For example, you may decide on a new workflow, set an acceptance criteria and define a test period. Then, you try the new workflow during the test period, after which you evaluate the outcome. Finally, you decide to keep or modify the new workflow.

1. Start with what you know: Implementing Kanban doesn’t require massive changes to your current processes. The point is to start with your current process and then introduce changes based on feedback about the process. Because of the continuous improvement nature of Kanban, the longer you use it, the better your process becomes.

IMPROVE COLLABORATIVELY

WHAT ARE THE PRINCIPLES OF KANBAN?

Kaizen is a word that is often associated with Kanban. Kaizen is another Japanese word that generally means “improvement.” In business, Kaizen is often used to describe a system of

The properties of Kanban describe what you need to do to implement Kanban. There are also four principles to help describe how to think about Kanban.

2. Agree to pursue incremental, evolutionary change: Like everything else that we do in business, change is more effective if everyone on the team is on board. Create a culture of continuous improvement by selling team members on the importance of improving u

IMPLEMENT FEEDBACK LOOPS Feedback loops improve productivity. Using feedback loops, you can compare actual outcomes to expected outcomes in order to understand what happened. Feedback should be obtained from the process itself (metrics like cycle time), participants in the process (employees) and customers of the process (clients). Then you can use that information to make iterative improvements to the process.

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One or more of the CNA companies provide the products and/or services described. The information is intended to present a general overview for illustrative purposes only. It is not intended to constitute a binding contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. The statements, analyses and opinions expressed in this publication are those of the respective authors and may not necessarily reflect those of any third parties including the CNA companies. “CNA” is a service mark registered by CNA Financial Corporation with the United States Patent and Trademark Office. Certain CNA Financial Corporation subsidiaries use the “CNA” service mark in connection with insurance underwriting and claims activities.

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O the processes. This can be done by showing the team the correlation between better service delivery, customer loyalty and ultimately business success.

3. Respect the current process, roles, responsibilities and job titles: Kanban recognizes that it is likely that there is value in the way things are currently done that should be preserved, so it does not prescribe sweeping changes, which often elicit fear in team members. Explicitly stating that the current processes, roles, responsibilities and job titles are respected will help alleviate fear that often accompanies change and will make team members more comfortable to participate in the smaller improvements along the way.

Incremental, rather than sweeping, changes also allow the team to tie results to the change that preceded them which facilitates better decision making.

4. Encourage acts of leadership at all levels of the organization: Team members at all levels need to feel safe to introduce change into the process.

There is tremendous value in the perspectives of individuals throughout the organization. Everyone involved, regardless of their pay grade, should feel empowered to show leadership.

Kanban’s usefulness has been recognized in industries like supermarkets, manufacturing and software development, just to name a few.

Given the right attitude and culture, a Kanban approach can also help accounting firms.

A Kanban system can help track work being done by providing a visual representation of what has been done, what is being worked on and what still needs to be done. It can also help with the distribution of work.

On a Kanban board, work that needs to be done is kept in a backlog column and can be prioritized. Swim lanes can also be added in order to categorize work (e.g. individual vs. business returns) within a single board.

When an accountant is done with what they

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are working on, they can go to the backlog column and pull the next highest priority task that fits within their skill set. Kanban can also help a firm track the resources spent on each client.

Most importantly, Kanban will facilitate continuous process improvement so that firms can give their clients an amazing experience that will keep them coming back for more. n

1. Anderson, David J. “The Principles & General Practices of the Kanban Method.” Lean Kanban Services. Dec. 10, 2010. services.leankanban. com/principles-general-practices-kanbanmethod 2. Wester, Julia. “What is Kanban?” Everyday Kanban. everydaykanban.com/what-is-kanban/

JENNIFER EVERSOLE, CPA, is co-founder and partner at Management Stack, LLC, a CPA firm and digital consultancy in Roanoke. She is a member of the VSCPA Board of Directors and serves on the Disclosures Editorial Task Force. jeversole@managementstack.com connect.vscpa.com/JenniferEversole @JennEversoleCPA linkedin.com/in/jenniferduffcpa managementstack.com

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Keep CPA Businesses Thriving When you contribute to the Virginia Society of CPAs Political Action Committee (VSCPA PAC), your voice joins thousands of Virginia CPAs, ensuring that you are heard at the Virginia General Assembly.

Contribute to the VSCPA PAC today, and help keep CPA concerns in front of Virginia state and local officials.

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Virginia Society of Certified Public Accountants Political Action Committee

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Visit vscpa.com/PAC or (800) 733-8272.

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Attention CPAs:

Whether A Decision Maker Looking To Upgrade Your Talent, Or A CPA Looking to Upgrade Yourself/Your Skills, Ask Yourself: Who really chose who in joining your company?

Are you/your professional staff really at the right level where you should be/you need them to be?

Are you/your staff in a position that truly suits your/their personality, values, and professional and personal needs?

Why leave your future to chance?

If you’re seriously interested in making the “right” move for your next hire, I can help you.

I am an actively licensed CPA in Maryland and Virginia with over 20 years of experience including public accounting (E&Y) and consulting (KPMG), financial accounting (American Cancer Society), internal audit (Moneyline Telerate), and recruiting (Acsys, formerly Don Richards). As a networker who truly enjoys helping others and sharing my career experiences to guide fellow professionals, here is how I can help you: Decision Makers:  Ask you questions, and most likely ask many more questions than other recruiters about your company, duties involved, skills required, corporate culture and more  Work with you on finding the “right” professional that is the “right fit”  Provide you with valuable information about the professionals I work with, the marketplace, what your competitors pay, and more Career Seekers:  Guide you on career paths available in public accounting and industry  Enable you to capitalize on your strengths  Coach you on how to put your best foot forward to find the “right fit”  Advise you when to stay in your current position if that is the right move If you’re interested in working with a recruiter who understands your background, skills, and is genuinely interested in helping you find the “right fit”, then I welcome meeting you!

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Phone: 301-767-0670 Email: BethABerk@msn.com

Specializing in CPA Firm, Accounting & Finance Positions in Metropolitan DC & Nearby Suburbs/Baltimore/Richmond/Tidewater Connecting You To Your Next Hire

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TAXATION

UPS AND DOWNS Help your clients navigate the roller coaster of divorce taxation

BY CHERI G. DAVID, CPA, CVA

Divorce can be like a stomach-turning roller-coaster ride. For me, it started in the Hanover Circuit Court, headed up to the Virginia Appellate Court and then all the way to the top — the Virginia Supreme Court — with an explosive win. And then, I came all the way back down the court chain again with a grand finale of more than $250,000 in legal bills (just for my side). David v. David 287

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VA. 231 (2014) was most certainly not my favorite roller-coaster ride, but one that has shaped my perspective on what clients may be experiencing during separation and divorce.

While most clients’ divorce journeys will not land them in front of the Supreme Court, it is important to recognize how we as CPAs can play significant roles in helping our clients and their families survive the ride.

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THE INITIAL PHASE CLIENT CONTACT Amicable or not, the first very important stage of any divorce is a separation agreement.

Hopefully your clients will, at minimum, consider this less litigious agreement, collaborative law or mediation first. However, sometimes emotionally charged divorcing couples will skip these steps completely and head straight to divorce court by way of filing a divorce complaint with full-blown litigation to follow. CPAs will often find that their clients only show them a separation agreement or divorce decree after it has been signed, agreed upon and approved by the judge. Moreover, these final agreements may or may not leave room for the CPA to provide the most tax advantageous scenario to the formerly happy, now not-so-happy, couple. In effect, the CPA is left with the daunting task of working through tax situations “after the fact.”

But CPAs can take a proactive role in assisting their clients before the agreements are drafted, signed and approved by helping them (and their lawyers) include very important elements in the final, legally binding documents.

CLIENT REPRESENTATION CPA firms that prepare joint tax returns for separated parties often find themselves in a precarious situation. Considering whether to retain both clients, one client or none after the separation should meet the state professional codes of conduct. To retain both clients, the separating spouses should be amicable and the firm must disclose to the clients that a conflict of interest could exist if the parties do not agree on their tax matters. Be sure to have two separate engagement letters, each containing a reference to the potential conflict of interest, if preparing both parties’ tax returns. Anything less will open your firm up to significant risks of malpractice, as well as distrust and the potential loss of both clients.

If the clients are anything less than amicable,

immediately disengage from working with at least one of the parties or maybe both.

From that point forward, it’s advisable that all future communications regarding agreements between the parties be made in writing and preferably ask the disembarking client if it is okay to communicate with their new CPA directly. Remember, divorce is a roller-coaster ride. One day everything is fine between the parties and the next it is not! Don’t jeopardize your firm’s professionalism by trying to keep both clients in this tentative type of situation.

THE SEPARATION PHASE Understanding the separation agreement as well as referencing the guidance in U.S. Internal Revenue Service (IRS) Publication 504, Divorced or Separated Individuals, will help in the tax preparation and planning for the divorcing couples. Depending on the each of the party’s individual circumstances, the tax return may be very simple or somewhat complex. Collect the facts and be proactive.

Ask a lot of questions, such as: 1.

What are the living arrangements?

2.

How are the children’s expenses paid?

3.

Who pays the household living expenses?

4.

Did either party move out?

5.

What are your plans for the marital residence (keep or sell)?

6.

What are your plans for handling the division of your assets?

7.

Have you retained or are you thinking about retaining a lawyer?

Early intervention in the drafting of the agreements is critical — the separation agreement is essentially the beginning framework for a final decree. Think of a separation agreement like a trial-run agreement as to how the couples are able to follow the terms of the agreement in their new paradigm, as co-parents or as independent

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living members of society. If the separation agreement is missing certain elements of tax law clarification, the parties will hopefully be afforded another opportunity to make modifications before the final court-ordered decree. Parties are often in a flurry of emotional trauma, and are not thinking about how dependents will be claimed or how the Affordable Care Act (ACA) will affect their taxes. A CPA who is able to work with attorneys and clients during this first phase can clear up potential tax-related pitfalls in those written agreements between the parties.

FILING STATUS Marital status is decided as of the last day of the year — Dec. 31. For those parting couples who can be somewhat agreeable, married filing jointly (MFJ) will likely yield the best tax result (though it is not a slam dunk filing status in all cases). For example, if the parties have split homes and there are children involved, a Head of Household (HOH) status should be considered. The HOH rules indicate that if, in the last six months of the year, the taxpayers maintained separate households with a qualifying child, HOH status may be available and will almost always yield the best tax advantage for both parties.

In high-conflict divorces, parties often will ask to file their returns separately. Sometimes, it really doesn’t matter that the tax result will be better under a MFJ status. These types of couples may not only despise the air the other party breathes, but the thought of having their name listed with their soon-tobe-ex is incomprehensible. In some cases, it’s absolutely necessary to prepare a married filing separate (MFS) return if there are past tax liabilities, debts or late tax filing issues to consider by either spouse.

Keep in mind that preparing MFS returns has some twists. The MFS filing status claimed must be the same for both parties’ returns.

Additionally, the spouse who files first gets to pick whether they want to itemize or claim a standard deduction. The spouse who files u

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last is stuck with having to file in the same fashion, including using the same itemized or standard deduction as the first spouse. Let your client know the MFS filing ramifications before filing season, and that mix-andmatching in the MFS returns will earn them unwanted IRS attention.

LIVING UNDER THE SAME ROOF More than ever before, divorcing couples are living together while their divorces are pending — and even sometimes during high-conflict litigation. Be extra careful when couples are in this situation. Support agreements may indicate spousal support, child support and other directives. However, if the couple is still living together, the normal exemptions, deductions, child tax credits, dependent care credit and income allocation rules are modified and may not apply. For example, the dependent care credit is not available for MFS returns.

WHO GETS TO CLAIM THE KIDS? There used to be an old saying: “He who files first gets to claim the kids.” Although to some degree that remains true, if both parties claim the same kids, the IRS will eventually review both parties’ returns and send letters to your clients asking who has the right to claim the children. Several examples are itemized in IRS Publication 504. However, it simply boils down to this: Whichever parent provides more than half the support is entitled to the deduction. If both parents provide equal support, then the exemption goes to the parent with the higher Adjusted Gross Income. If the non-custodial parent provides more than half the support, then the custodial parent needs to release the exemption by completing IRS Form 8332, Release of Claim to Exemption for Child by Custody Parent, and file it with the return.

Have a directive as to who will be signing the Form 8332 and for which years included in the parties’ agreements and decree. The IRS can disallow the deduction to the noncustodial parent without this form attached

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to the return — regardless of what the court order states about exemptions.

There are a few exceptions when neither parent can claim the children. This mostly happens if the child is being supported by another provider, grandparent, foster care or family member. Sometimes the parents are receiving significant aide from public sources, such as Social Security or government aid.

Thorough client inquiry and communications will help in the accurate tax preparation and proper dependency exemptions reporting.

ALIMONY OR SPOUSAL SUPPORT Transfers of marital property between spouses as a result of divorce or separation are generally not taxable. However, payments required by a legally binding separation agreement or decree to spouses for maintenance can be considered alimony.

Unlike alimony, which is taxable income to the receiving spouse and a deduction to the paying spouse, child support is not alimony and not taxable or deductible. Parties can also agree in their agreement or decree that support or certain payments (i.e. auto expense, insurance, utilities) will not be designated as alimony. If the parties wish to exclude support payments from their tax return, a legal binding document (separation agreement or decree) must be filed and attached to their returns to qualify for the exclusion.

Parting spouses — even if living in the same home in separate bedrooms and with a legal separation agreement or decree — cannot claim support payments as alimony unless one of the spouses leaves no later than one month after the date of the payment. In other words, it’s not enough to just have an agreement that includes a party’s requirement to pay expenses for the other spouse. The couples must live in separate residences to claim this tax deductible obligation.

Be careful of alimony recapture rules. It’s often difficult for couples to fathom writing checks to their soon-to-be ex. While the courts,

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bound by state laws, may require mandatory payments under certain circumstances, a crafty lawyer may draft spousal support agreements that include a reduction of those payments when the kids turn 18. Even though this fact may not be identifiable in the agreement, the mere dropping of payments in the future should raise caution flags for potential recapture. Specifically, if the alimony/spousal support decreases by more than $15,000 or decreases significantly in years two and three from the first, the parties likely may have to recapture that alimony.

AFFORDABLE CARE ACT (ACA) PROVISIONS The ACA is now adding additional layers of complication for divorcing couples. The ACA provisions consider that households with incomes from 100 percent to 400 percent of the poverty level are eligible for the advanced premium tax credits (PTC) for payment toward their health insurance premiums. This means there are incentives to how couples divide children dependency exemptions and allocate income. If a higher-income spouse makes alimony payments to the lower-income spouse, then essentially there is a shift of income to the lower-income spouse. In some states, like Virginia, a minimum household income in 2016 of $11,880 is required to be eligible for the PTC. Therefore, in some circumstances alimony and/or spousal support that meet a minimum income threshold for ACA purposes may increase the couple’s chances to save significant tax dollars, combined with correctly reporting the PTC between the returns.

The PTC is essentially a subsidy tied to the taxpayer and their dependents. The parent who claims the child gets claim the credit if within the eligible income limits. The parent who doesn’t claim the child but receives the subsidy (PTC), may have to pay a portion or the entire subsidy back. This subsidy is reconciled between the parties’ returns and hopefully it is referenced in the parties’ legally binding agreements. If the unhappily divorcing couple does not communicate

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with one another about who is claiming the dependent exemptions and who will be carrying the health insurance policy, but one or the other holds the policy, the parties may be out of luck in being able to claim the credit — or worse, they may have to pay it back.

This is due to another mismatch between the party’s returns, one claiming the dependency exemptions and the other receiving the PTC subsidy. Further guidance of the PTC and the interplay between divorcing couples’ tax return filing statuses, as well as dependency exemptions, can be found in IRS Instructions for Form 8962, Premium Tax Credit.

THE FINAL DECREE For divorcing couples, a final divorce decree is the pathway to the future. Divorce decrees

come in all shapes and sizes. Hopefully, the clients have worked with their CPAs during the process and the final decree clearly identifies directives based upon the couple’s mutual agreements or the finality by a highly litigated court decision. The decree should include concise and specific directives of how the marital and separate assets are divided or sold, how IRAs are to be transferred, who makes which payments and for how long, child support, alimony and various other support requirements.

Divorcing couples are often battle-worn by the time they get to the final decree stage. They will find themselves in a “just get through it” attitude. It’s okay to assert your knowledge and help them from “just” signing off on a legally binding document that does not

Game Change.

We just broke the mold in the benefits industry. We’re offering the

include necessary tax planning objectives.

Fundamentally, once a court order of final decree is entered, it can take a tremendous amount of time and financial resources to have it changed later.

A NEW CHAPTER A CPA is often the most trusted and neutral advisor between divorcing couples. Whether you helped your client navigate through the process of preparing taxes or provided them with just an empathetic ear, a proactive approach can save your client much agony and dispute through the divorce process. CPAs are in a unique position to supply sound advice in the early stages from the separation agreement all the way through to the final decree.

While it sounds contrarian, divorcing couples who can work together are far better off — not just as it relates to their tax savings, but for their kids and their future economic statuses as well. CPAs who add value by helping their clients stomach the rollercoaster ride will land sincere loyalty and a long-trusting relationship for years to follow. n

single most critical benefit for you and your clients — advice. Sound, actionable advice. This changes

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everything.

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SEPTEMBER/OCTOBER 2016

CHERI G. DAVID, CPA, CVA, has nearly 20 years of experience in tax, financial and small business consulting. She is an owner and managing partner at Clarkson David, CPA, and is also a partner at Valuation One, LLC, a firm specializing in expert witness testimony and divorce litigation matters. She is a member of the Disclosures Editorial Task Force. cheri@clarksondavid.com linkedin.com/in/cheridavidcpa @clarksondavidcpa connect.vscpa.com/CheriDavid

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EDUCATION

TEACHER TALK: EDUCATOR ROUNDTABLE online learning case studies Exam

technology

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critical thinking

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EDUCATION

As the school year kicks off, the VSCPA likes to take

(PICTURED ABOVE, LEFT TO RIGHT)

the pulse of the world of accounting education in Virginia’s colleges and universities. In the past, we’ve spoken with students about their accounting experiences, but this year, we wanted to talk to the professors about incorporating everadvancing technology, keeping up with changes to the CPA Exam and more.

HOLLY CALDWELL, CPA Bridgewater College, Bridgewater BOB COCHRAN, CPA Longwood University, Farmville CINDY EASTERWOOD, CPA Virginia Tech, Blacksburg GABRIELE LINGENFELTER, CPA Christopher Newport University (CNU), Newport News

We spoke to some students, too, and you can read their responses at vscpa.com/StudentRoundtable. But here’s what our educators had to say about their experiences in the accounting classroom in 2016. We spoke with:

HOW HAS NEW TECHNOLOGY CHANGED THE WAY YOU TEACH YOUR CLASSES? HOLLY CALDWELL: Technology has allowed me to better connect with my students. Through the use of online learning centers provided by publishers to using Moodle to post documents for students to access, I have been able to use class time in a more efficient manner. Many students are using multiple technology tools in high school, so I think it is important for college professors to keep to the technology level that they have been accustomed to.

CINDY EASTERWOOD: New technology has primarily allowed me to have more resources available for students online.

Students have access to my PowerPoint slides and sample problems with solutions.

I can assign more homework because the homework is completed online and automatically graded. Students also have access to videos that explain the course material.

JILL MITCHELL: New technology allows me to be more flexible in teaching and use my time more efficiently. For example, publishers’ online learning systems, like

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JILL MITCHELL Northern Virginia Community College (NVCC), Annandale

McGraw-Hill’s Connect or WileyPLUS, grade students’ homework and provides resources to help them when they are working on an assignment. They receive detailed, customized feedback immediately. With over 200 students, I am not able to provide that kind of feedback on every assignment. Now when I do meet one-on-one or in the classroom, we can zero in on the areas or topics on which students need additional guidance or support. We spend the precious class time we have together to focus on problems that involve higher-level thinking. u

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EDUCATION

WHAT CAN COLLEGES AND UNIVERSITIES DO TO ENCOURAGE STUDENTS TO BECOME CPAs? BOB COCHRAN: The faculty needs to constantly stress the importance of the credential. I do this in a variety of ways. I begin in the principles classes by stressing the variety of career opportunities available to accounting majors, especially those who get the CPA. In upper level classes where all the students are declared accounting majors, I require membership in the VSCPA and the AICPA. I set aside at least one class day each semester to introduce students to a variety of websites available to assist in preparing for and passing the CPA Exam.

It is important for the faculty to live the CPA culture by being CPAs. The dean of the College of Business and Economics is a CPA. We have three full-time faculty. Two are CPAs and the third is in the process of obtaining the CPA. All of our adjunct faculty are CPAs.

GABRIELE LINGENFELTER: I believe that having an accounting faculty that is active in the profession is important. Faculty members need to maintain their CPA license and need to be involved with professional organizations at either the local, state or national level. Additionally, inviting various CPA organizations, such as the VSCPA and the Virginia Board of Accountancy (VBOA), and CPAs from industry, public practice and government to speak to the Accounting Club or in accounting classes helps promote the profession. Universities can also put the spotlight on successful accounting alumni who are CPAs, whether on the department’s website or featured in promotional material.

JM: The key to encouraging students to become CPAs is to share with students the many career paths that the CPA license can

CE: I try to incorporate new technology into my teaching in order to address student’s different learning styles and increase student engagement. I make the textbook videos available to students in case they need extra help. I have also used iClicker response systems in the classroom to increase student involvement. This is especially helpful in very large classes where students are not comfortable speaking up. I am also trying to increase student engagement and make the classes more personal by incorporating examples that students can relate to.

BC: I have always stressed critical thinking in my classes. I constantly relate the details to the big picture. I ask students to explain and interpret material, not just master debit/credit fundamentals.

GL: The new CPA Exam will test higher-level skills and will place more emphasis on critical thinking, problem solving and professional skepticism.

JM: At NOVA in our accounting classes, there has always been an emphasis on student learning outcomes. We know what our students need to know when they leave our classes and transfer. The AICPA’s Future of Learning has an emphasis on the backward design process.

This emphasis has reaffirmed for us that we are doing what we should be doing in the classroom.

In order to better prepare my students for the revised Exam, I am developing a new course. Likely, the best way to improve these higher level skills is through case studies. The new course will use case studies and be the mandatory capstone course for the accounting majors. Students will be required to analyze some of the cases individually, others in teams. The learning objectives and related questions will ask students to analyze and evaluate and apply their accounting knowledge from previous accounting classes.

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SEPTEMBER/OCTOBER 2016

provide them. Students come to accounting classes with the misconception that accounting is all about math. Colleges and universities need to change that mindset by exposing students to CPAs who have experience in all industries. If a student is interested in working in sports, for example, he or she can enter that industry as a CPA. Students need to be made aware of these opportunities.

HOW HAVE THE AICPA’S FUTURE OF LEARNING RECOMMENDATIONS PLAYED INTO YOUR TEACHING AND PLANNING?

HOW ARE YOU CHANGING YOUR COURSES TO HELP STUDENTS BETTER PREPARE FOR THE NEW CPA EXAM?

26

associations

To be successful in accounting, you must constantly learn. I’ve always felt that as a professor, one of my responsibilities was to teach students how to learn and get them excited about learning. The AICPA’s Future of Learning recommends that we “ignite a passion for learning.”

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DISCLOSURES.VSCPA.COM

EDUCATION

WHAT DO YOU DO IN YOUR CLASSROOM TO KEEP STUDENTS ENGAGED IN YOUR LESSONS? HC: I have moved to a lecture, practice problem, lecture, practice problem format that seems to be working well.

Instead of lecturing on a chapter for two days straight and then going over homework during class time, I have adjusted the format of the course which has allowed students to be directly immersed in the learning objective after a mini-lecture of the topic. I have also seen test averages increase by 10 points due to this new class format.

GL: Fortunately, classes are small at CNU. It is much easier engaging a class with 19 students than one with 35 or more. I am not a big fan of following a detailed lesson plan. I have certain topics and concepts that I have to cover each class period but I let the dynamics of the class determine on how I will cover a specific topic.

For example, in my accounting principles class when explaining the difference between a periodic and perpetual inventory system I may ask students to explain how Walmart versus a small country store will track inventory of Iams lamb and rice dog food. In another class I may work an example for both methods and then ask the class to come up with an example for both. In Auditing I use a lot of short cases or critical incidents.

I will put students in small teams, have them discuss the questions and then lead a discussion in class.

JM: To keep my students engaged, I lecture briefly, share relevant stories (either from my own professional experience at Ernst & Young or current events), and then we do hands-on practice right away. Relevance is the key to keeping the students engaged.

HOW HAS YOUR UNIVERSITY REACTED TO ONLINE LEARNING? WHAT NONCLASSROOM LEARNING METHODS DOES YOUR UNIVERSITY OFFER? HC: We have implemented online options for some of our courses offered in during the summer.

However, I use online learning centers which are provided by publishers for the completion of all homework and chapter quizzes. By moving the completion of these two areas to outside the classroom, I have been able to free up more time to working with the “takeaways” from each chapter. In addition, it has afforded me the time to work with students individually during class.

Using electronic means for homework and quiz completion provides students with instant feedback on the assignment and instant grading for the professor.

BC: I think the demand for online delivery of content will intensify. Institutions such as Western Govenors University offer entire degrees using online delivery and credit for life experience. As more institutions adopt on-line delivery students will inevitably migrate to them. They provide a degree of schedule flexibility unavailable with traditional classroom delivery. Courses and entire degrees can be offered at a lower cost due to the lack of brick-and-mortar overhead.

JM: NVCC is a leader in online education. Our Extended Learning Institute (ELI) has offered online classes for over 40 years, and we enroll over 9,000 students in online classes each semester.

Students can complete our Accounting Career Studies Certificate which provides students the accounting credits they need to meet the requirements of the VBOA to sit for the CPA Exam in Virginia.

In addition, we offer hybrid, or blended, classes. For example, I teach a six-week Principles of Accounting I class in the hybrid format. We meet in person once per week and the rest of the work is completed online. Students can then take the Principles of Accounting II class in the second six-week semester so that they can complete the two Principles requirements in one semester. This format has been beneficial for our students who need greater flexibility with scheduling classes.

WHERE DO YOU SEE NON-CLASSROOM LEARNING METHODS GOING IN THE FUTURE? CE: I think there will be an increased emphasis on hybrid/blended learning methods because students have different learning styles. Some students learn effectively by viewing lectures online and working problems in the classroom. Some students prefer the traditional live classroom lecture while other students prefer a combination of online and in-class lectures.

GL: For accounting students and business students in general, internships will be essential. The experience from the internship will close the gap between school and work. Most employers already expect that potential new employees will have had at least one internship. I believe that this requirement will continue to grow.

JM: I believe there is a great opportunity for students to learn while on the go. In publishing, the term, “chunking” is used. The AICPA discusses “microlearning” or “just in time” learning. We can create engaging, meaningful content in short amounts that students can use where, when and how they need it. I am working on a master’s degree in instructional design and technology because I need to stay current in learning methods if I want to provide the best experience for my students whether I see them in person in a classroom or only meet them virtually online. u

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27

EDUCATION

The CPA is your goal.

The Exam is not an obstacle to overcome, rather an opportunity to demonstrate what you have accomplished.

WHILE CONVERGENCE WITH INTERNATIONAL ACCOUNTING STANDARDS HASN’T TAKEN PLACE AT THE RATE SOME PREDICTED, DO YOU FEEL THAT INTERNATIONAL STANDARDS ARE STILL IMPORTANT FOR TODAY’S STUDENTS? HC: Yes, although I do not place a heavy emphasis on the details involved in international standards in my courses, we do discuss their existence. We live in a world where there are no geographic lines for business and they need to know these types of initiatives are in the works.

BC: The world continues to shrink and businesses continue to become more global, so the need for some knowledge and familiarity of International Financial Reporting Standards (IFRS) is necessary. However, just as accounting programs do not focus on industry specific accounting issues, I do not think accounting programs need to focus on IFRS as an individual stand-alone topic.

GL: Yes. They are tested on the CPA Exam and most students at one point in their career will audit or work for a multinational company that uses IFRS. Additionally, students will gain a better understanding of U.S. GAAP when they are required to discern the differences between GAAP and IFRS.

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IF YOU COULD GIVE ONE PIECE OF ADVICE TO STUDENTS ENTERING COLLEGE WHO WANT TO BECOME CPAs, WHAT WOULD IT BE? HC: To stick with your goal. It is not an easy accomplishment, but carve out time in your lives early on to get this significant goal completed. You may have to separate yourself from family and friends for a bit, but you will reap significant dividends for the future.

BC: Be sure to understand the challenge you are undertaking. The CPA is your goal. The Exam is not an obstacle to overcome, rather an opportunity to demonstrate what you have accomplished.

Approach your studies with the same energy you would approach a job. Your learning is your job and the harder you work at it the greater the success. Understand that the stronger the ground work you lay the better the career. A great GPA opens the best doors, a mediocre GPA, not so much.

CE: Going to college is not just about learning accounting and other academic subjects. It is about learning how to write and think critically. Students should take advantage of the opportunity to develop their critical thinking skills and writing skills in college because these skills will help them become successful CPAs. GL: Students need to a have a plan in place that includes their four years of undergraduate education, how to obtain the additional hours for the 150 requirement and a time frame for taking the CPA Exam.

JM: For students entering college who already know they want to be CPAs, I recommend that they build relationships with their professors and join the VSCPA. These relationships lead to future career connections and recommendations for scholarships and job opportunities.

WHAT DO YOU SEE AS THE MOST IMPACTFUL TRENDS IN ACCOUNTING EDUCATION TODAY? HC: Many times I feel that I am teaching students for jobs that do not yet exist.

Providing them with the ability to solve problems, think critically, plan strategically, reflect on their actions and communicate effectively are all areas that need to be focused on in an education in business and accounting.

BC: I think technology will have the greatest impact on the future of accounting education. Technology evolves at a logarithmic pace. Students will demand that the education environment take full advantage of new technologies. Those environments that do will remain relevant the rest will fade away.

GL: The focus that is now being placed on critical thinking and hands-

SEPTEMBER/OCTOBER 2016

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on learning. Both will require that we change the way we teach. The typical lecture style classroom will not suffice.

Educators will have to employ case studies and collaborative learning and will have to encourage students to seek internships.

JM: The most impactful trend in accounting education is the profession understanding the importance of building a pipeline of qualified professionals. Instead of just focusing on college graduates, the profession understands that the message of opportunities that a career in accounting can provide starts in the high schools and community colleges. Accounting educators and accounting professionals have a responsibility to connect with those groups. n

DISCLOSURES.VSCPA.COM

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VSCPA news

Moving up through volunteerism Visit the VSCPA LEAD website at vscpa.com/ LEAD.

chapter level, including VSCPA conferences and leadership events, as well as networking opportunities that the VSCPA sponsored.

Partnerships often developed once these relationship-building opportunities were established.

HENRY DAVIS III, CPA

BO GARNER, CPA

In this installment

of the LEAD Round, we’re quizzing two VSCPA members — a seasoned CPA and a young professional — about their views on leadership issues affecting the profession and how they would (or do) deal with those issues. This month’s participants are a pair of very involved VSCPA volunteers — HENRY DAVIS III, CPA, of Virginia Commonwealth University in Richmond, and BO GARNER, CPA, of PBMares in Newport News. With the VSCPA’s new volunteer system launching in October, we decided to talk to them about what volunteering has done for their career.

How has volunteering contributed to your career advancement? What leadership skills have you gained from getting involved?

HD: Volunteering has contributed directly to my career advancement.

The biggest contribution it did for me was it expanded my personal and professional network. Volunteering with the VSCPA at both the state and chapter level has given me an opportunity to meet people in the CPA field who at one time or another provided me information on several things such as job openings, organizations I needed to know about and other people I needed to meet and get to know. In addition to expanding my network, another benefit of volunteering was that having volunteer work on my resume helped me be able to stand out.

Volunteering is especially beneficial to people who are pursuing jobs in the nonprofit area. Hiring managers in the nonprofit area consider volunteer experience an important criterion in selecting candidates.

The biggest area where I gained leadership skills by volunteering was relationship building. Building my network of valuable long-lasting relationships with people not only in the CPA field but with insurance agents, bankers and lawyers helped me to be successful in both the short and long term. These relationship-building opportunities came about through taking on leadership opportunities at both the state and

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BG: Volunteering has not only contributed to my career, but also a more fulfilled life. Giving back in the form of time is something that has been ingrained in my life from a very early age. My parents taught me to be thankful for what I have, to take nothing for granted and to give back to those who are less fortunate and need help the most.

I began volunteering early on in my life, and once I decided on a career in public accounting, I was introduced to the VSCPA. I quickly realized how much of an uphill battle the CPA Exam was and how unique the industry is. I could not imagine how others could succeed without the resources the VSCPA and coworkers provided. One of my first volunteer roles for the VSCPA involved speaking to college students about the profession. It was very rewarding to be able to talk to them about what they could expect, as well as all the reasons why choosing the profession was the right move for me.

My volunteer efforts continued to expand with the VSCPA into various other committees and one-off opportunities. I have also volunteered with other community organizations in Hampton Roads, which has also been very rewarding. This lifestyle has become synonymous with my daily responsibilities at work. Being involved in the nonprofit community my whole life, and being able to partner with many nonprofits at work, has given me a sense of accomplishment and has been a calling for me. It’s rare that a day goes by in which I did not do something to help one of my nonprofit clients or a nonprofit that I serve personally.

I would not be where I am in my career without the leadership skills developed through my involvement with the VSCPA. I’ve become a better listener through my volunteer involvement. All my work with the VSCPA has either involved teams, committees or at least an audience.

Being able to work with and adapt to different people, personalities and audiences is an important skill. And my involvement with the VSCPA has helped me refine my time management, organization and delegation skills. With each committee position and volunteer opportunity at the VSCPA, we work together to allocate and delegate tasks to maximize efficiency and effectiveness of the task at hand. n

DISCLOSURES.VSCPA.COM

VSCPA news

Members win CFO Awards

NEW VOLUNTEER SYSTEM NOW ONLINE We’ve changed the way you can manage your volunteer responsibilities.

Like our MentorMatch program, the new volunteer manager is run through Connect, the VSCPA’s members-only online community.

The Virginia CFO Award winners were (from left) Mike Griffin, Dave Keltner, Julie Hovermale, CPA, Jeff Reed and René Chaze, CPA.

VSCPA members RENÉ CHAZE, CPA, and JULIE HOVERMALE, CPA, were among the winners of the 11th annual Virginia CFO Awards, held by Virginia Business magazine June 23 at the Jefferson Hotel in Richmond.

The new system makes it easier for you to find volunteer opportunities, sorted by activity, expertise needed and time commitment. Short-term opportunities are more prominent and easier to find.

And once you’re in our volunteer pool, we’ll be able to notify you when an opportunity that meets your criteria comes open.

Visit connect.vscpa.com/Volunteer to take the new system for a spin, and if you want to, go ahead and sign up to volunteer. We’re currently seeking volunteers for the following opportunities: • Legislators’ Tax Guide Task Force (closes Sept. 30) • VSCPA Board of Directors • VSCPA Educational Foundation Board of Directors • VSCPA PAC Board of Trustees • Young Professionals Advisory Council • VSCPA Accounting & Auditing Advisory Committee (opens Oct. 1) • VSCPA Peer Review Committee (opens Oct. 1) • VSCPA Professional Ethics Committee (opens Oct. 1) • VSCPA Tax Advisory Committee (opens Oct. 1)

The VSCPA is a founding sponsor of the awards, which honor Virginia’s top CFOs and those holding equivalent positions in several business categories. Eleven VSCPA members were nominated and six were selected as finalists.

Chaze, chief operating officer at Edelman Financial Services in Fairfax, won in the Large Private Company category. In an unrelated awards program, he was also honored as CFO of the Year by the Washington Business Journal.

Hovermale, CFO of the Better Housing Coalition in Richmond, won in the Small Nonprofit Organization category.

The VSCPA’s other finalists were: >> STEPHANIE BRYAN, CPA, of MDARVA at Stony Point Surgery Center in Richmond (Large Private Company) >> STEPHEN HUBER, CPA, of Birdsong Peanuts in Suffolk (Large Private Company) >> BRAD HUNGATE, CPA, of Groome Transportation in Richmond (Large Private Company) >> DWIGHT SHELTON, JR., CPA, of Virginia Tech in Blacksburg (Large Nonprofit Organization) n

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Visit vscpa.com/VolunteerSchedule to learn when you can sign up for your desired opportunity. n

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VSCPA news

THE LEADERS’ INSTITUTE TURNS 10

Day of Service is almost here!

Sept. 19–23, 2016, is Virginia CPA Week

, when the VSCPA and the Commonwealth recognized CPAs for the vital role they play in the Virginia economy. All week long, we’ll be promoting the profession in the media and to businesses and taxpayers.

The best way you can celebrate Virginia CPA Week is by signing up and participating in CPA Day of Service, the annual event that sees CPAs and their coworkers take a day to make a difference in the communities where they live and work. This year, CPA Day of Service is set for Friday, Sept. 23. Hundreds of CPAs and employees of accounting firms across Virginia volunteer each year as part of CPA Day of Service, working at volunteer locations for a variety of organizations and causes and including both indoor and outdoor projects. We’d love to have a record of your participation, so please sign up at vscpa.com/DayofService!

For more info, visit vscpa.com/DayofService or contact VSCPA Member Engagement Manager Laura Cobb, CAE, at lcobb@vscpa.com. n

Your case studies needed for VSCPA Ethics course The VSCPA wants to include real-life ethical dilemmas in the upcoming 2017 Virginia-specific Ethics course, and we want your help! Anyone who takes the 2016 course is eligible to submit his or her own case for inclusion in the 2017 course. If your case study is chosen, you will receive a free 2017 Ethics class from the VSCPA in the format of your choosing.

We’re seeking case studies from all practice areas, not just public accounting. Your submissions from industry, government, nonprofit and other areas will help ensure the 2017 course is relevant to all practice areas.

Visit vscpa.com/CaseStudySubmissions to submit your case study. Include a title, background information, executive summary, a description of the ethical challenges raised and results, including leading questions that will help guide discussion. Remember to remove personal or identifying information. Thanks for helping us make the best Ethics course we can! n

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We’d like to thank all the sponsors, speakers, panelists and attendees who made the 10th annual Leaders’ Institute such a success. The 2016 edition, held June 17–18 at the University of Richmond, drew 49 of Virginia’s top accounting students.

The VSCPA would like to thank founding sponsor BAKER TILLY and the rest of the Leaders’ Institute sponsors:

BECKER BROWN EDWARDS CHERRY BEKAERT COTTON & CO. DELOITTE DIXON HUGHES GOODMAN JOHNSON LAMBERT KEITER KPMG MITCHELL WIGGINS & CO. PBMARES PRICEWATERHOUSECOOPERS U.S. GOVERNMENT ACCOUNTABILITY OFFICE VIRGINIA AUDITOR OF PUBLIC ACCOUNTS VSCPA EDUCATIONAL FOUNDATION WELLSCOLEMAN n

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

DISCLOSURES.VSCPA.COM

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A new designation representing accomplished professionals that drive and deliver business success, worldwide.

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VSCPA news

Congratulations to the following members!

Left to right: Zachary Bucklen, CPA, Julie Gustavsson, CPA, Howard Kramer, CPA, Terri McKnight, CPA, Gary Thomson, CPA

NEW HIRES >> ZACHARY BUCKLEN, CPA, has joined Updegrove, Combs & McDaniel in Leesburg as a staff accountant.

EMMETT PEPE, CPA, has joined GSE Systems in Sykesville, Md., as chief financial officer.

JOSH TAYLOR, CPA, has joined Meadows Urquhart Acree & Cook in Henrico as a tax manager.

PROMOTIONS >> Alexandria firm KWC has named HOWARD KRAMER, CPA, principal and promoted SAMANTHA BELL, CPA, to supervisor, EMILY JACKSON, CPA, to manager and RACHEL JONES, CPA, to senior.

OLGA PAMFILOVA, CPA, was named a senior accountant at Burdette, Smith & Bish in Fairfax.

LAURA SPROUSE, CPA, has been named partner at Brown Edwards in Roanoke.

APPOINTMENTS & AWARDS >> JULIE GUSTAVSSON, CPA, of Keiter in Glen Allen, and KYLE VIELE, CPA, of Capital One in Richmond, were honored with the American Institute of CPAs’ (AICPA)

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DISCLOSURES

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Standing Ovation award for the Information Management and Technology Assurance specialty area.

JENNY HERRERA, CPA, of Rubino & Co. in Bethesda, Md., was installed as president of the Greater Washington Society of CPAs for fiscal 2017.

TERRI McKNIGHT, CPA, of Gelman, Rosenberg & Freedman CPAs in Bethesda, Md., was appointed to the Christopher Newport University Board of Visitors by Virginia Gov. Terry McAuliffe.

GARY THOMSON, CPA, of Dixon Hughes Goodman in Glen Allen, was appointed to the Virginia School Readiness Committee.

FIRM NEWS >> Tysons firm BAKER TILLY was named a Best Place to Work for 2016 by the Washington Business Journal.

Fairfax firm HOMES, LOWRY, HORN & JOHNSON celebrated its 60th anniversary Aug. 1.

KLAUSNER BENDLER + ASSOCIATES has moved to Arlington from its previous office in Bethesda, Md., and has changed its name to KLAUSNER & CO., PC. Richmond firm MITCHELL WIGGINS & CO. was honored at ChamberRVA’s ninth Annual Icons and YP Workplace Awards for

SEPTEMBER/OCTOBER 2016

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fostering an environment that attracts, retains and develops young professionals.

Fairfax firm THOMPSON GREENSPON was named as a winner of the Greater Washington 2016 Top Workplaces award by The Washington Post.

PHILANTHROPY >> Tysons Corner firm BAKER TILLY celebrated its firmwide stewardship day Thursday, July 14. Employees performed hunger-related community service at the Arlington Food Assistance Center, the Capitol Area Food Bank, the D.C. Central Kitchen, Martha’s Table and Miriam’s Kitchen.

Bethesda, Md., firm COUNCILOR, BUCHANAN & MITCHELL (CBM) held its annual Charity Fishing Challenge in conjunction with the 35th Annual Pro-Am Fishing Tournament in Chesapeake, Md. CBM entered two boats in the tournament and donated a total of $2,500 to the Salvation Army World Service Office.

DIXON HUGHES GOODMAN completed its fifth annual Count the Cans campaign, tallying 593,464 pounds of donated food and more than 1,150 service hours to hunger relief organizations nationwide.

Falls Church firm MJW was a sponsor of the Joyce-Gillespie-Harrington Educational & Charitable Foundation’s 36th annual Black and Gold Scholarship Ball. n

DISCLOSURES.VSCPA.COM

VSCPA news

Nominate a distinguished CPA Do you know a Virginia CPA

who deserves to be honored as one of the VSCPA’s best? Don’t let exceptional work go unnoticed. Nominate a worthy colleague for a VSCPA Distinguished CPA Award.

TOP 5 MEMBERS UNDER 35: Nominate a young CPA member (35 or younger as of April 30, 2017) who has shown excellence in one or more of the following: professional achievement, VSCPA or local VSCPA chapter accomplishment, community contribution or dedication to the CPA profession.

OUTSTANDING MEMBER OF THE YEAR: Nominate a VSCPA member who has provided outstanding service to the profession through participation in VSCPA activities, civic engagement and charitable activities that further a positive image of accounting and the CPA profession.

Nominations are due by Friday, Dec. 2. Nominate online at vscpa.com/ Awards or email VSCPA Member Engagement Manager Laura Cobb at lcobb@vscpa.com. n

THE VSCPA MOURNS THE LOSS OF...

JOSEPH LATELLA, CPA, of Springfield. A U.S. Army veteran and a former Washington Metro police officer, he graduated from American University and the FBI National Academy in Quantico.

ROBERT WARREN, CPA, of Virginia Beach. He was a graduate of the University of Virginia and a partner with Warren & Bandy.

He was a founding member of the Oceanfront Jaycees, belonged to the Lynnhaven Rotary Club and served as treasurer of the Virginia Beach Sertoma Club. n

APPLY NOW FOR LEADERSHIP ACADEMY Are you a young professional looking to take the next step in your accounting career? The VSCPA’s fourth annual Leadership Academy will help you build on your innate talents and let your leadership abilities shine through.

The 2015 Leadership Academy is set for Nov. 14–16. Applications are due Friday, Sept. 9. Visit vscpa.com/ LeadershipAcademy to apply! n

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VSCPA news

THE VSCPA’S NEWEST CPAs MATTHEW ASSENAT DANIEL BERLIN DANIEL COLONNA MICHAEL DOOBIN NADIA FAROOQI REBECCA FLOREK THOMAS GILLESPIE JAMES GREEN AUSTIN HALE ANDREW HILL RYAN HOLLOWAY STEPHEN HUFFMAN THOMAS JAMISON JACQUELINE JONES MUNKULI KATAMPI BRADLEY KILKOWSKI JOAN KIMM SAMUEL KLAUSNER KATSIARYNA KRASUTSKAYA RICHA KUMRA KYSHA LEBRON NICHOLE LEVESQUE JUNFENG LI FANGYUAN LIAO MARYNA LINDSEY JARED LIPSCOMBE MATTHEW LOVE PENGFEI LUN NICHOLAS MATHIS KRISTI MCCAIN STEVEN MICHAELIS LAUREN MIETKIEWICZ OLGA PAMFILOVA DANIEL PARRA EARL RICHARDS TARA SPRUILL-JONES MARY STEWART JESSICA STEWART JOHN VAN DRUNEN EVAN WRINKLE List from June and July. Compiled July 27, 2016. n

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Members appointed to VBOA

Left to right: Jim Holland, CPA, Stephanie Saunders, CPA, Laurie Warwick, CPA.

Virginia Gov. Terry McAuliffe made his appointments to fill out the

Virginia Board of Accountancy (VBOA), with VSCPA members STEPHANIE SAUNDERS, CPA, and LAURIE WARWICK, CPA, claiming spots.

Saunders, a partner with Saunders & Saunders in Virginia Beach, was appointed to a second term on the VBOA. She served as the 2015–2016 chair of the VBOA, but will return to an atlarge position on the board. JIM HOLLAND, CPA, a sole proprietor from Chesterfield and an accounting professor at Virginia Commonwealth University, will serve as chair in 2016–2017.

Warwick, executive director at Ernst & Young in Ashburn, was appointed to the board for the first time. Matt Bosher, a partner at the Hunton & Williams law firm in Richmond and the public representative on the board, was appointed to a second term. n

Staff news

Left to right: Jane Hayes, David Bass, Julia Henderson, Kathy Suddarth

Membership Services Coordinator JANE HAYES celebrates her 13th anniversary with the VSCPA on Sept. 22. Public Relations & Communications Director DAVID BASS marks his fourth anniversary with the VSCPA on Oct. 2.

Membership Marketing Manager JULIA HENDERSON celebrates three years on Oct. 29.

Education Coordinator KATHY SUDDARTH celebrates her second anniversary with the VSCPA on Sept. 22. n

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DISCLOSURES.VSCPA.COM

CLASSIFIEDS GROWTH, SALES & ACQUISITIONS WHAT IS YOUR CPA FIRM WORTH? Please download our free Practice Value Report by visiting http://poegroupadvisors. com/value. Find out why Poe Group Advisors is the premier accounting practice brokerage firm by visiting us at http://www. poegroupadvisors.com.

SALE/MERGER OPPORTUNITY — Well–established and diversified small Burke VA CPA firm seeks sale/merger opportunities.

Practice clientele includes annual reviews, compilations and monthly accounting services. The firm has a significant individual income tax practice as well as a variety of business tax returns. The firms enjoys a long-standing on-site and unqualified or pass peer review history.

In 2014 the firm’s only two audit clients were transitioned to a review level service. The firm is that of a sole practitioner seeking retirement or semi-retirement over the next 18 months. Growth and referral opportunities are excellent. Reply in confidence to #99, VSCPA, 4309 Cox Road, Glen Allen, VA 23060, or email disclosures@vscpa.com.

Please put “Blind Box 99” in the email subject line.

MERGER OPPORTUNITY — Well-established 2 partner Northern Virginia CPA firm is seeking a similar sized CPA firm or sole practitioner who is interested in merging with and eventually managing the firm. The firm specializes in individual income taxation but also has small business tax, payroll and compilation clients and prepares a significant number of trust tax returns. The ideal firm would have the ability to assist with the firm’s current workload. Reply in confidence to #100, VSCPA, 4309 Cox Road, Glen Allen, VA 23060, or email disclosures@vscpa.com. Please put “Blind Box 100” in the email subject line.

Classified ads are a great way to reach VSCPA members — 94 percent rate the information in Disclosures as excellent or good. What are you waiting for? Contact us at classifieds@vscpa. com or visit vscpa.com/Classifieds for rate information. Members receive a discount.

Support Accounting Students & Future Leaders By donating to the Educational Foundation, you help accounting students pay for college and reach their academic and career goals.

Ameera Choudhury and Miranda Melton 2016 Scholarship Recipients and Leaders’ Institute graduates

“Receiving the Kearney and Company scholarship is more than a recognition of my past achievements—it has given me the opportunity to continue my success and invest in my future.”

- Ameera Choudhury, Member since 2016

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Donate today at vscpa.com/DonateFoundation

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I AM the vscpa TRUSTED ADVISOR >>

Two minutes with Ali Gunbeyi, CPA Ali Gunbeyi, CPA, is a shareholder at Jones CPA Group in Norfolk. He obtained his bachelor’s degree in economics from Istanbul University, Turkey, and his master’s in business administration from Old Dominion University. He has served on the VSCPA’s Management of anCPA Accounting Practice Task GARY THOMSON, >> Force and wasCPAs’ recently installed to as a member Extending influence of the VSCPA Board of Directors.

the government arena.

I AM PASSIONATE ABOUT… Supporting local businesses. It is a great feeling to see your neighbor or someone in your community taking a risk and succeeding in the business world. They are the true catalysts and unsung heroes of our economy.

PEOPLE DON’T KNOW THIS, BUT… I was a graduate teaching assistant at Old Dominion University while pursuing my MBA degree.

I carried 2–4 classes every semester for several semesters. I don’t think I will ever do that again, but it was a great experience.

IF I WEREN’T AN ACCOUNTANT, I WOULD BE… An engineer or a youth soccer coach. I love the analytical and problem-solving aspects of engineering. At the same time, coaching and mentoring young athletes is so rewarding — you can show these young minds the value of hard work and discipline while having fun and enjoying the sport.

MY ADVICE TO FELLOW CPAs IS… Trust in your abilities to lead in business matters other than the traditional accounting and tax areas.

We are trained to be problem solvers and critical thinkers and we can apply these traits to everyday business decisions. We tend to know more than the debits and credits and we can truly help our clients with their strategic direction and long-term planning.

I NEVER LEAVE HOME WITHOUT… Kissing my wife. I am very fortunate to have a wonderful family and strong support system.

I WISH CPAs KNEW… The value and expertise they bring to the table. After all, studies show we are the most trusted advisors.

I’M A CPA BECAUSE… I enjoy helping individuals and businesses with their everyday challenges. n

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Virginia Society of CPAs 4309 Cox Road Glen Allen, VA 23060

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