Disclosures: July/August 2014

BROUGHT TO YOU BY THE VIRGINIA SOCIETY OF CPAs

Auditing Virginia’s Big Data

JULY/AUGUST 2014 I VOL. 27 NO. 4 I WWW.VSCPA.COM

The Punch-In Clock Is Dead

Meet the VSCPA Member of the Year

IT’S A GREAT BIG WORLD OF DATA The Tech Issue

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INSIDE this issue

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Imagine all the information housed in databases across the Commonwealth. Big Data helps the Virginia Auditor of Public Accounts to test application controls, ensure rules are followed and look for riskier transactions.

ARTICLES

FEATURES ORDER FROM CHAOS

COVER STORY >>

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Virginia’s Office of the Auditor of Public Accounts harnesses Big Data to find the answers it needs.

TECHNOLOGY

AD INDEX 10

Beth A. Berk, CPA Digital Benefit Advisors Nationwide Insurance PNC Bank Poe Group Advisors

Great smartphone apps for smart CPAs.

TAXATION

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Get tax reporting for grantor trusts right.

PAST THE PUNCH-IN

11 25 40 2 39

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Learn the ins and outs of a new application that can help you track time like a pro.

SECTIONS BACKTALK

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DATA DRAFT

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PROFESSION’S PAST

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VSCPA NEWS

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VSCPA EDUCATIONAL FOUNDATION

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CLASSIFIEDS

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I AM THE VSCPA

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

Our mission is to enhance the success of CPAs.

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BACKTALK you said it

VIRGINIA SOCIETY OF CPAs

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

FROM VIRGINIABUSINESS.COM >>

disclosures http://disclosures.vscpa.com EDITORIAL STAFF Jill Edmonds Managing Editor disclosures@vscpa.com Chip Knighton Contributing Editor cknighton@vscpa.com

TURNING GREAT BUSINESS IDEAS INTO REALITY There are more financing sources than ever for early-stage companies. But identifying the ideal source(s) of capital for your business can be tricky.

Although early-stage companies may view a windfall of venture capital as the grand prize, we encourage early-stage companies to explore other sources of capital until venture capital funding is more likely.

ALEX CASTELLI, CPA, CohnReznick, Tysons Corner

Jenny Chu, CAE Marketing & Communications Director jchu@vscpa.com EDITORIAL TASK FORCE Joan D. Aaron, CPA Lindsay S. Andrews, CPA Adam G. Chaikin, CPA David L. Cotton, CPA Gary D. Dittmer, CPA Elizabeth M. Helle, CPA Clare K. Levison, CPA Kevin S. Matthews, CPA David R. Peters, CPA George D. Strudgeon, CPA Thomas L. Visotsky, CPA

From the

TWITTERSPHERE >> Just led a panel for @VSCPANews w/ @KirkCoxVA & Vivian Watts. Both sides uncertain how Medicaid standoff will end.

— @RYANOBLES

DEADLINES

Colette Wilson celebrates with her family after being sworn in as VSCPA chair in May. Back row: Maxine Wilson (Colette’s mother-in-law), Marcus Wilson (Colette’s husband), Colette, Louvenia Webb (Colette’s mother). Front row: Olivia and Brandon Wilson (Colette’s children).

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

VIA FACEBOOK >>

Sept./Oct. 2014 Nov./Dec. 2014 Jan./Feb. 2015 March/April 2015 July/Aug. 2015 Sept./Oct. 2015

July 7, 2014 Sept. 1, 2014 Nov. 3, 2014 Jan. 5, 2015 March 2, 2015 July 6, 2015

Congratulations Colette! You’re going to be a great chair.

BRADFORD R. JONES, CPA, PBMares, Fredericksburg

Congratulations Bob Baldassari Outstanding Member of the Year #VSCPA @VSCPANews — @THOUGHT2EXECUTE How do CPAs support our farms? This article from @VSCPANews profiles finance professionals in VA’s largest industry.

— @VAAGRICULTURE Congrats Sr. Mgr Mike Wagner, named atlarge board member for @VSCPANews — @GTCAREERSUS

BLOG: www.cpacafe.com

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.

CONNECT: http://connect.vscpa.com TWITTER: @VSCPANews, @FinancialFit LINKEDIN: http://tinyurl.com/VSCPALinkedInGroup FACEBOOK: www.facebook.com/VSCPA INSTAGRAM: www.instagram.com/VSCPA

VSCPA ENDORSED PARTNERS

Get in touch

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DISCLOSURES

At the Virginia Society of CPAs, we love to hear from you.

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

+ Your one-stop resource for the CPA industry.

The VSCPA Career Center

All services are FREE to Job Seekers... the VSCPA Career Center is your connection to finding your dream job.

Attract top talent! We are your recruitement portal to highlyqualified CPA professionals.

Post your jobs today.

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Search hundreds of local and nationwide openings

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Find the best product and price to meet your staffing needs

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Build your own in-depth profile to market your skills and talent

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Search qualified candidates based on job specific qualifications

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Upload your resume and update it as often as you want (confidentially, if you prefer)

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Create an online Resume Agent to email qualified candidates right to your inbox daily

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Set up a personal Job Search Agent and be alerted when new jobs are posted

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Utilize the Career Learning Center to take control of your career selfmanagement

Get help with government compliance, job posting tips, assistance writing job ads and other resources

Upload Your Resume Post Your Jobs Use the Career Learning Center Access Employer Resources Set up Job Alerts Create a Resume Agent

Upload your resume or post your jobs today at CAREERCENTER.VSCPA.COM... and be sure to visit us often!

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Why DATA matters

The other week, my boss came back from a VSCPA conference and stumped me with a function I had never heard of that is new to Excel 2013. The new function, Flash Fill, can be used to replace many of the functions that I have covered in this column to date. For example, if you have First Names in column A and Last Names in column B, you can add a header to column C and then type out the top First Name (Ryan) and Last Name (Morgan) into the row just under the new header in column C (Morgan, Ryan). The magic of Flash Fill occurs when you start typing the next First and Last Name combination in column C.

Raw data is one thing,

but when it’s federal spending data, fiscal accountability is on the line. In May, President Barack Obama signed the Digital Accountability and Transparency Act (DATA Act) to help taxpayers and policy makers more effectively track federal spending.

The direct expenditures of federal agencies will link federal contract, loan and grant spending information to federal programs. Better yet, the DATA Act requires the U.S. Department of the Treasury and the U.S. Office of Management and Budget to establish common federal data standards and adopt a non-proprietary, platform-independent data standard, such as eXtensible Business Reporting Language (XBRL), for the reporting of federal budget and spending information.

Sen. Mark Warner (D-Va.) was a congressional co-sponsor, and the VSCPA commended his commitment to government fiscal responsibility.

Want to see spending now? Scan the QR code with your smartphone or visit USASpending.gov. n

GOOD-BYE 1992, HELLO 2013

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>> EXCELLENT EXCEL: FILL IT ALL IN A FLASH

The function will use some type of predictive analytics and give you a preview of how it thinks you want the names combined in the remainder of column C. If you like what you see, hit enter and bam! In a flash, the rest of names in columns A and B are filled into column C — just the way you like it. If you want see some demos on this magical function and maybe, while not recommended, you can stump your boss (instead of the other way around), check out the videos at http://tinyurl. com/FlashFillDemo. n

GEORGE D. STRUDGEON, CPA, CGFM, is an audit director at the Virginia Auditor of Public Accounts in Richmond. He is a member of the VSCPA Editorial Task Force.

Email him if you have Excel topics you want him to cover. * george.strudgeon@gmail.com. connect.vscpa.com/GeorgeStrudgeon

On Dec. 15, 2014, the 2013 Internal Control —– Integrated Framework from COSO will supersede the 1992 version. Among the changes: A LOT more technology references addressing risk assessment, control activities, communication and monitoring.

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A new kind of crisis: Employability What happens when, even though many people are

unemployed, employers cannot find the skilled workers they need? It’s a mismatch in the labor market.

“Addressing the Employability Crisis: Reconnecting Education, Skills and Jobs,” a new Chartered Global Management Accountant (CGMA) report, says: “While there is an oversupply of people with low-level skills, there is a shortage of those with advanced, high-level skills.”

The crisis is particularly hitting young adults hard, with many new college graduates finding themselves saddled with large student loan debt and a degree that doesn’t prepare them for the working world. The report investigates the crisis and offers solutions for students, working adults and employers. For example, professionals must consistently keep their technical skills up-to-date, because those skills are perishable.

Find the report in full on the CGMA website at www.cgma.org.

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>> TECH CPE ON THE BRAIN You can find a lot of tech-related CPE from the VSCPA this fall, whether it is from the technology workshop at the Professional Development Conference, a seminar cluster or online. There’s something for everyone:

DATA BREACHES NO MORE

PROFESSIONAL DEVELOPMENT CONFERENCE TECHNOLOGY WORKSHOP

After conducting a risk assessment of its computer system, a CPA firm should develop a written information security plan that:

Oct. 22–24, 2014, Westfields Marriott Washington Dulles Content from K2 includes a tech update on the most effective technologies, plain tech talk for your office and productivity application alternatives.

>> Outlines the specific ways the firm will protect data

TECHNOLOGY SEMINAR CLUSTERS

>> Sets forth policies, procedures and staff responsibilities, including what staff members required to do and report and what they are not allowed to do >> Covers areas such as the Internet, social media, email usage and record retention and destruction >> Details the reporting and other requirements of the states in question and the state agencies to which breaches are to be reported. Some states require firms to be compliant with the state’s privacy laws if the firm has the privacy data of a resident of that state. Some states require a written security plan by law.

Make sure you teach the written plan to staff. New laws or regulations should be reflected in changes to the plan. Training sessions to update staff on such changes will make the plan a dynamic, living document that staff uses and relies upon.

Oct. 27–31, Richmond; Oct. 27–30, Fairfax; and Oct. 31, Springfield Content from K2, Judy Borsher and CPA Crossings will cover business analytics, Excel advanced productivity features, Microsoft Office 2013, Windows 8, advanced QuickBooks and much more.

ONLINE CPE All summer long K2 provides online CPE courses in July and August on mobile device management, Excel tips, QuickBooks, pivot tables and more.

Find it all at www.vscpa.com.

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Source: CAMICO. For more information and guidance about CPA firm insurance issues, visit www.camico.com. n

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DATA draft

Virginia versus the rest

FARM PRODUCTS: GOING UP

The Tax Foundation has a wealth of information comparing the states on different benchmarks.

Here’s how Virginia ranks in a few tax areas, with No. 1 being most favorable or highest:

CPAs serving Virginia’s

>> No. 26 for small business tax climate: How each state’s tax laws affect economic performance. The Commonwealth ranked highly for corporate tax and sales tax (at No. 6 on both). The best? Wyoming. >> No. 35 for state revenue per capita: $4,841. Alaska wins by far at $19,686. >> No. 9 for state individual income tax collections per capita: $1,254. Connecticut collects the most at $2,054. >> No. 31 for state and local sales tax rates: 5.3 percent. This includes the mandatory local add-on sales tax of 1 percent. California’s comes in highest at 7.5 percent.

Want more? Visit http://taxfoundation.org.

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farms have more numbers to crunch.

According to the 2012 Census of Agriculture, products from Virginia farmers saw a 29 percent jump in market value between 2007 and 2012 — equating to a $1 billion increase.

That reflects a national trend showing a $395 billion boost during that time period.

Virginia’s farms need CPAs too! If you missed the feature on VSCPA members working in agriculture in the May/June issue of Disclosures, check it out at http://disclosures.vscpa.com. n

Don’t be a cyber target Is your info in cyber space? According to the Identity Theft Resource Center (ITRC), there have been 4,579 recorded data breaches from 2005 through June 5, 2014. That equals 630,870,450 exposed records. What’s out there? Info that could potentially lead to identity theft, such as Social Security numbers, financial and medical information and email addresses and passwords. Visit www.idtheftcenter.org for more stats, information for consumers and businesses and victim help.

8 PERCENT: The number of large global companies using Big Data to stop security breaches 25 PERCENT: The number of companies by 2016 expected to enlist Big Data to stop breaches, according to a report from Gartner n

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>> BY THE NUMBERS

23.4 percent The increase in the number of criminal prosecutions by the U.S. Internal Revenue Service during the Obama administration over Bush administration levels. This number is still lower, however, than prosecution levels in 1993. n

PROFESSION’S past 25 YEARS AGO >>

Predictions from the 1990s you’ve known. Whether or not this was a positive development for the profession is, perhaps, a good topic for someone’s master’s dissertation or doctoral thesis.

BY DAVE COTTON, CPA

It is easy to take for granted the way the profession is today — and assume it’s always been that way. Ours is an evolving and dynamic profession. This column looks at the way we were a quarter-century ago.

The January 1990 issue of Disclosures featured an executive update by Robert J. Neuland, CPA. It took a look at the “challenges” the VSCPA faced going into the final decade of the millennium. His five focus areas reveal a great deal about the state of the profession 25 years ago.

CPE Bob pointed out that 1990 was the first year that continuing professional education (CPE) became mandatory for all members of the VSCPA. All members were required to have met the new requirement’s goals by 1992. Bob summed up: “The CPE program must grow in future years, which will require additional staff by the Society.”

In 25 years, CPE has become a major VSCPA endeavor. In 2013, the Society had seven staff dedicated to planning and providing CPE, and conducted hundreds of educational events and conferences.

QUALITY REVIEW

IN-HOUSE DATA PROCESSING Yes, in-house computing was a novel, exciting and challenging development for the VSCPA (as it was for many businesses) 25 years ago. As Bob pointed out, the widespread use of PCs and the prospect of networked PCs came just in time: “With the onset of QR, additional CPE requirements, and assistance to chapters in billings, mailing lists, etc., it has become clear that there’s a need for additional staff to provide in-house computer technical support.”

Today, VSCPA has a dedicated technology director and continues to look for ways to leverage technology to improve the member experience.

LEGISLATION The VSCPA was actively involved in advancing the profession’s interests legislatively 25 years ago. The Society was tracking the following issues in 1990: manadatory CPE requirements, the 150-hour requirement, quality review and legal liability laws.

As we all know, the VSCPA remains very active today with the VBOA and the state legislature.

Bob’s concluding paragraph is as relevant today as it was 25 years ago:

The Society had conducted just six quality reviews in 1989 and planned to conduct 110 reviews in 1990. To meet the needs of this new requirement, the VSCPA was adding “a technical reviewer and a scheduler” to the staff and this new requirement was expected to require $53,000 in 1990 for the direct cost of the reviews.

The issues above will affect the quality and image of the profession, which continues to grow in stature. Your involvement and awareness of the issues is in your very best interest, and your commitment of time to the profession is needed. As we enter the new decade, the challenge to us will be to continue to build on the foundation of the past.

Quality review has become a way of life for firms and an important endeavor for the VSCPA. In 2013, VSCPA had a dedicated peer review committee, a staff member devoted to peer review and a peer review budget of more than $70,000.

Bob is retired and living in Vienna. When you see him at upcoming VSCPA events, make sure to thank him for his leadership in our profession’s past. n

150-HOUR REQUIREMENT

DAVE COTTON, CPA, is partner at Cotton and Company, LLP, in Alexandria. He is a former VSCPA Board of Directors member and currently sits on the VSCPA Editorial Task Force.

He joined the VSCPA in 1981. * dcotton@cottoncpa.com connect.vscpa.com/DavidCotton

When Bob wrote his 1990 column, “the Society [was] developing its position regarding the nature and form of the 150-hour education requirement.” He said that while “it may seem that the year 2000 is a long time away … it is really quite short” due to the need for colleges and universities to have programs in place by 1995.

If you entered college after 1994, the 150-hour requirement is all

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TECHNOLOGY

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Get app savvy

NOTE TAKING Whether it’s an important detail or a brainstorm on the go, a good note-taking app helps make sure none of your thoughts need to slip away undocumented. Like with file-sharing apps, synchronization is key — information is shared across multiple devices, allowing you to share your findings or insights quickly and seamlessly. Evernote is an industry leader in this category, along with Microsoft OneNote and Springpad.

Great smartphone applications for busy CPAs.

COMMUNICATION

Smartphones can help you get the most out of your practice by enabling you to be productive — no matter where you are.

If you have Internet access, you can work. Accounting research firm Bay Street Group estimates that the added productivity generated by a bestin-class smartphone package could yield more than $30,000 annually for a small or mid-sized firm.

“If you’re a smaller firm, a lot of these tools can help you become more competitive,” said Kim Mahan, founder and CEO of MAXX Potential, a Richmond-based technology support company. “They can make you faster. You can compete on a more level playing field with the big guys if you’re willing to take on that risk.”

The most useful mobile apps for CPAs fall into several categories. Here are the ways to get the best bang for your buck, as well as the top apps in those categories.

FILE SHARING File-sharing apps allow users to share files across multiple devices by synchronizing documents placed in a shared folder to a secure location in the cloud. Any user with access to the folder can view and make changes to shared files. Dropbox is the gold standard for this category of apps, and Microsoft OneDrive and SugarSync have their devotees.

Google Drive, like all Google apps, integrates seamlessly with Android devices.

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A must for auditors working offsite, a phone alternative can help you make phone calls in foreign countries and places where calls are impossible or cost-prohibitive. If you have access to WiFi, Voice Over Internet Protocol (VOIP) apps can save money when you’re outside your network. Skype is the most popular of these apps, but Google Voice gets points for its integration with other Google apps and Android devices and can centralize multiple phone numbers into one number.

CONNECTION You can even take the VSCPA with you on your phone. MemberCentric, available for Apple and Android devices, is your mobile gateway to Connect, the VSCPA’s interactive, members-only directory. If that’s not enough networking for you, LinkedIn also has a mobile app on the Apple and Android marketplaces, and Twitter (or third-party clients like Hootsuite and Tweetdeck) helps you keep abreast of news and connect with industry leaders.

DO YOUR DUE DILIGENCE How far you dip your toe into the mobile/cloud waters is going to depend on your appetite for risk. Mahan stresses the importance of doing your homework regarding the services you plan to use, but urges firms to give the cloud a chance.

“The key is understanding the risks and the security,” she said. “There are people who [say] “yes or no” [to] clouds without a lot of data, and if you look at the security policies of Amazon, it can be more secure than doing it yourself.” n

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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!

BETH A. BERK, CPA, CGMA Independent Recruiter

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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Contingency & Retained Staffing Solutions

matching skills, experience & values with needs Serving clients and professionals as an Independent Recruiter since March 2005

TAXATION

Protect Your Clients’ Nest Eggs Get tax reporting for grantor trusts right

BY ROBERT C. MILLER, ESQ.

We have seen more and more grantor trusts being used in recent years for various purposes.

What are grantor trusts, how they are being used and how can the income and deductions be reported?

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WHAT ARE GRANTOR TRUSTS?

WHY ARE THE GRANTOR TRUST RULES IN THE IRC?

Grantor trusts are simply trusts in which the person who contributed the assets to the trust (the “grantor”) is treated for income tax purposes (but not for estate tax purposes) as if he owned the assets. Therefore, the income and deductions get reported on the grantor’s tax returns. The rules that determine if a trust is a grantor trust are found in Sections 671 through 679 of the U.S. Internal Revenue Code (IRC).

In the late 1960s, Congress enacted the grantor trust rules in response to a concern that parents were using trusts to shift income from themselves to their children in lower-income tax brackets. The “fix” took the form of highly complex rules which, if violated, resulted in the parent-grantor being taxed on the income of the trust instead of the beneficiary-child.

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TAXATION WHAT ARE TYPICAL USES OF GRANTOR TRUSTS? Grantor trusts are commonly used for various estate planning purposes.

Two grantor trusts are:

REVOCABLE LIVING TRUSTS Perhaps the most common grantor trust is the revocable living trust (RLT). As the name implies, the grantor can revoke it or terminate it at any time. The purpose of this type of trust is primarily to avoid probate in the state court system at the grantor’s death. Generally, only assets that are controlled by a decedent’s will are subject to probate. If assets have been placed into a RLT before death, they are not controlled by the will. “The RLT doesn’t die just because the grantor dies” is how I sometimes express this concept to clients. Under the rules, a RLT is considered a grantor trust because the grantor reserved the right to revoke it and take the assets back, and because all of the income can be distributed to the grantor without anyone else’s consent.

INTENTIONALLY DEFECTIVE GRANTOR TRUSTS Another common type of grantor trust is the “intentionally defective” grantor trust. When the grantor trust rules first went into effect, it was considered important not to violate them. Violating the rules would result in income being taxed to the grantor instead of to the trust. At that time, the grantor (typically a parent) was often in a higher income tax bracket than the trust. Later, however, the tax brackets for trusts changed dramatically so that trusts hit the top income tax bracket at relatively modest amounts of income — currently about $12,000 per year. Consequently, planners began to look at having the trust income taxed to the grantor who may not have been in the top tax bracket. When this occurred, planners began to refer to such trusts as “intentionally defective” since the grantor trust rules were intentionally being violated. These trusts became popular as an estate planning device for wealthier clients because assets with good appreciation potential could be sold to the trust in exchange for a note — which would not appreciate in value. In other words, it is an “estate freeze.”

Under Revenue Ruling 85-13, 1985-1 CB 184, since the trust is treated as owned by the grantor who sold the asset, the sale was ignored and no gain is recognized.

REPORTING THE INCOME FROM GRANTOR TRUSTS THE BASIC REPORTING REQUIREMENT Even though all of the income, deductions and credits of a grantor trust are treated as “owned” by the grantor, the trust is still subject to the general rule that a trust has to file an income tax return (IRS Form 1041) if (1) it has any taxable income; (2) it has gross income in excess of $600; or (3) any beneficiary of the trust is a nonresident alien.

However, the items of income, deduction and credit that are treated as owned by the grantor are not actually reported on Form 1041. Instead, they must be shown on a separate statement attached to Form 1041.

Under this approach, a statement should be placed on the first page of

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Form 1041 reciting that the items of income, deduction and credit of the trust are shown on an attached statement and are being reported on the return of the grantor.

There are two alternatives to filing Form 1041. However, note that these alternative methods are available only if all of the trust is treated as owned by one grantor. For example, if two individuals contributed assets to form the trust, then not “all of the trust” would be treated as owned by one grantor and these alternative methods would not be available.

FIRST ALTERNATIVE TO FILING FORM 1041 Under the first alternative, the trustee must furnish the name and taxpayer identification number of the grantor (not the trust) and the address of the trust to all income payers during the taxable year.

In addition, unless the grantor who is treated as owning all of the income, deductions, etc. is a trustee, the trustee must furnish the grantor with an information statement which (1) shows all items of income, deduction and credit of the trust for the year; (2) identifies the payer of each item of income; (3) provides the grantor with the information necessary to take the items into account in computing the grantor’s taxable income; and (4) informs the grantor that the items of income, deduction, etc. must be included in computing the taxable income of the grantor.

SECOND ALTERNATIVE TO FILING FORM 1041 Under the second alternative, the trustee is allowed to furnish all income payers the name, tax identification number and address of the trust itself. In addition, under this alternative, the trustee must file with the IRS the appropriate Forms 1099 reporting the income paid to the trust during the year and showing the trust as the payer and the grantor as the payee. Unless the grantor is a trustee, the trustee must also furnish to the grantor a statement which contains information similar to the statement described above under the first alternative.

PRACTICAL POINTERS In the case of a revocable living trust, the first alternative would normally be available because the grantor would own all of the trust and is almost certainly going to be a trustee. Thus the trustee/grantor would not have to generate the information statement described above for him or herself. In the case of a sale to a grantor trust, the first alternative would also likely be the most convenient method. In that scenario, typically only one asset is being sold to the trust and thus only one payer would have to be furnished with the tax identification number of the grantor and other information described above. n

ROBERT C. MILLER, ESQ., is an attorney in Newport News.

*

rmiller@rcmillerlaw.com

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ORDER FROM

CHAOS

How Virginia’s Office of the Auditor of Public Accounts harnesses Big Data to find the answers it needs.

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BY GEORGE D. STRUDGEON, CPA, CGFM APRIL V. CASSADA, CPA/CITP, CISA DEANN B. COMPTON, CPA, VCCO KAREN KYTE HELDERMAN, CPA, CISA, PMP ERIC M. SANDRIDGE, CPA, CGFM

Borrowing from the old “Keep It Simple, Stupid” (K.I.S.S.) principle, at the Office of the Virginia Auditor of Public Accounts (APA) we teach new staff, during our integrated auditor training, I.T.S., which stands for “In The System!” Many of the Commonwealth’s official records and controls reside “in the system.” To illustrate this point, we share this story with new auditors: An agency that we audit provides handson training on one of the Commonwealth’s systems. The training covers how the system creates documentation and processes transactions. A group of us from the Auditor of Public Accounts attended this training.

During the training, we entered a transaction; however, before hitting release on our transaction, the trainer informed the group that after we hit release we would not be able to change any of the information in the transaction, nor would we be able to print a paper copy of the transaction for filing (which also was required to be signed by a supervisor). Additionally, the trainer said that auditors would be looking at the printed copy for proper coding and approval.

At that point, the trainer must have forgotten that he was talking to a group of auditors, because we all quickly realized that we should never trust the paper version of the transaction! Yes, the paper had the coding; however, the information in the system could be changed after it was printed but before the transaction is released for subsequent approval. Additionally, no one goes around the state summarizing all the information on each piece of paper to do any type of reporting. Individual transactions are summarized by the system based only on what is in the system, not the paper. While yes, the paper had signatures for approvals, even

without a signature on a piece of paper the system would only process the transaction if the right person approved it in the system.

Big Data helps the

You get the hint: The official information and approvals were not on the paper that was being printed and stored, but in the system.

The system is the only thing that truly matters.

The APA uses an agency’s official records contained within their systems to cover three broad objectives. First, did the application controls enforce the business rules as designed? Second, if there are no application controls enforcing the business rules, is the entity still following the rules? And third, are there transactions that appear riskier that require further scrutiny?

Virginia Auditor of Public Accounts to test application controls, ensure rules are followed and look for riskier transactions.

To illustrate our I.T.S. principle, below are a few examples of how auditors at the APA are using the Commonwealth’s Big Data sets to test application controls, ensure rules are being followed and look for riskier transactions.

TESTING APPLICATION CONTROLS SYSTEM INTERFACES When systems are fully automated, the data in the financial reporting system is often a result of the originated entry occurring in a different system and passed along through several different system interfaces. Collectively, these originating systems could contain millions of individual transactions that all roll up together into the financial reporting system. If these interfaces are not working properly, errors could occur in the transmission of data, which could result in errors within the final financial statements. To verify that system interfaces are working properly, we obtain data from each of the originating systems. We then u

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The Office of the Auditor of Public Accounts serves as the Virginia General Assembly’s eyes and ears, monitoring and reporting how state agencies and institutions spend taxpayers’ money. create queries to test that details in each of the originating systems agree to the financial reporting system. This provides assurance that the interfaces between the systems are functioning properly and the financial statements are complete.

user access data from the security tables, we examine all individuals to ensure none have access combinations that could result in a vulnerability.

SEPARATION OF DUTIES

University systems charge students for tuition and fees based on their residency status, enrolled hours and degree program. If incorrect tuition and fees values are loaded into the system tables or an individual manipulates a student account, some students could be charged an incorrect amount or not be charged at all, and this could materially affect the financial statements. To obtain evidence that tuition and fee revenues are materially correct in the financial statements, we use data from the student accounting system to verify that all student accounts were assessed the correct tuition and fee amounts.

This validates the tuition revenue line item and provides assurance that the system is functioning properly.

The Commonwealth Accounting and Reporting System (CARS) records the system IDs of the person who keys in a transaction and the person who approves it. If the same person keys and approves the same transaction, it would represent a violation of the separation of duties principle and would be a weakness in the internal controls of the Commonwealth. While the comptroller of the Commonwealth does not assign IDs that would allow the same person to key and approve the same transaction, we validate that this critical control is working as designed by using the data within CARS to test every transaction to ensure that no single user ID was used to key and approve a transaction.

Modern accounting systems allow entities to efficiently manage user access by assigning individuals to group roles, such as the Accounts Payable Clerk role, thereby eliminating the need to assign access individually. While this creates efficiencies, it is possible for an individual to be assigned to multiple roles that could create separation of duties issues. Although entities review user access annually, separation of duties issues can be overlooked because reviewers are not familiar with all the capabilities assigned to every group role. To automate this process and make our audits more efficient and effective, we gain an understanding of the systems’ key controls and consider which control combinations should be separated. Using

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information from the accounting system, we can evaluate the effectiveness of this control by ensuring voucher amounts do not exceed purchase order amounts except within the prescribed tolerance set by management.

CORRECT CHARGES

VALIDATING ACCOUNTS PAYABLE MATCHING CONTROLS College and universities often establish tolerance thresholds within their accounting systems to aid in automatically matching invoice documents to purchase orders and receiving information. When accounts payable receives an invoice, it is common to perform a matching process to ensure the invoice information and the items received do not exceed the original purchase order.

By establishing tolerance thresholds, the institution can use automated thresholds that automatically match and pay invoices that fall within a certain tolerance of the original purchase order. By comparing purchase order data from the purchasing system to voucher

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ENSURING RULES ARE BEING FOLLOWED COMPLIANCE WITH ELIGIBILITY REQUIREMENTS University financial aid offices are required to use student grade and course registration information as their foundation for awarding individuals federal financial aid. The federal government requires us to test to ensure that ineligible students are not receiving federal financial aid. Rather than sampling students for this eligibility test and looking up their courses and grades, we can use data from the student accounting system to verify that all students receiving federal financial aid met the eligibility requirements set by the U.S. Department of Education.

PROPER ACCOUNT SETTLEMENT When an agency receives a contribution on behalf of a participant in a Commonwealth program, the agency is required to apply these contributions to the participant’s account and invest them within three days. If application and investment does not occur within three days, it creates an opportunity for fraud and the participant is losing potential earnings on their investment. To validate that the agency is applying and investing contributions within three days, we use the dates located within the system to calculate, for each contribution, the difference between the receipt and the corresponding settlement.

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COMPLIANCE WITH TIMELY DEPOSIT REQUIREMENTS The state comptroller requires all agencies to deposit their cash receipts daily. In a decentralized organization with many cash collection points, such as universities, ensuring compliance with this internal control is challenging. As deposits are made, most accounting systems track activity such as deposits by organization or department ID. To automate this audit procedure, we used department ID data to schedule all collection point deposits and apply a calendar to ensure that each deposited their cash receipts daily.

We were able to further refine our test by eliminating weekends, holidays and times when the university was closed due to breaks before we select our samples for ensure that deposits are intact.

VERIFICATION OF RECEIVABLES University systems assess various fees and other receivables to students throughout the year. Depending on the status, these receivables are reported on the financial statements at year end. To be included on the financial statements, the receivable must be valid and related to a student account. If the school does not receive payment within a set amount of time, a hold should be placed on the student account. We validate that a receivable is valid and related to a student account by comparing the receivables to the student listing, as well as verifying that a payment was subsequently made on the account. If a payment has not been made, we verify that a hold has been placed on the student’s account to ensure future services are not provided.

VALIDATING REVENUE ON REIMBURSEMENT GRANTS Universities primarily obtain federal funding through a reimbursement process, which requires the expenditure of university funds prior to reimbursement by the federal agency.

Revenue related to these federal grants is not considered earned until the expense has been incurred by the university. University

accounting systems typically include a billing process that automatically creates a revenue entry based on the corresponding unreimbursed expenses in the system. We can validate the federal revenue recorded by the university by comparing expenditure data for federal grant funds to the corresponding revenue that is generated each time the billing process runs.

LOOKING FOR RISKIER TRANSACTIONS DETECTING INEFFICIENT CELL PHONE USAGE The Commonwealth has contracts with multiple cell phone providers in Virginia. State agencies and institutions of higher education are responsible for ensuring that they use these contracts to provide cell phone services in the most economical way for staff who need cell service to do their jobs. We analyze the detailed billing data from the service providers to find inefficient usage, such as phones that are unused for an entire year, pooled minute plans with large amounts of unused minutes and phones that constantly incur overage charges. We then question management if there are legitimate reasons for why their phones would have these types of patterns.

HIGHLIGHTING UNALLOWED VENDOR TRANSACTIONS AND EXCEEDING TRANSACTIONS LIMITS The Commonwealth has a small purchase charge card program. Employees of the Commonwealth have the ability to obtain one of these cards to make purchases on behalf of the state agency as it relates to their job duties.

The Virginia Auditor of Public Accounts is a CPA, of course!

Martha Mavredes, CPA, has worked at the APA for 30 years and was appointed to a four-year term beginning in 2013. She is a long-time VSCPA member.

There is a risk associated with certain types of vendors, and as a result, the Commonwealth maintains a list of unallowed vendor types from which small purchase charge card holders are not allowed to purchase goods without prior approval. To verify all purchases from unallowed vendors have obtained the proper approval, we obtain data from the bank and use a query to report all transactions for vendors on the unallowed list. Once u

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Last year, audits by the Office of Public Accounts discovered embezzlements and improper handling of funds totaling more than $10.4 million. these transactions are identified, they are researched at the individual agency level to determine if there is a justifiable reason for the purchase.

For example, alcohol purchased to study its effect on lab rats in a research setting could be allowable, whereas purchasing it for a party would be unallowable.

Additionally, each card is assigned a transaction limit that stipulates how much the cardholder can spend in one transaction. Vendors have the ability to split transactions if it appears they will exceed their transaction limit to avoid obtaining additional approval for the transaction. To validate that cardholders are not splitting a transaction to avoid card transaction limits, we run a query that reports instances in which multiple transactions have occurred in the same day to the same vendor that collectively exceed the cardholder’s transaction limit.

With this information, we ask management why employees appear to be circumventing the transaction limit control for their card.

IMPROPER OVERTIME OR BONUS PAYMENTS In state government, payroll overtime and bonus payments require additional approvals and/or supporting documentation. Some Commonwealth agencies even have policies that do not allow overtime or bonus payments for employees. If documentation and approvals are not available to support the payments, improper payroll payments could result. To validate that all overtime and bonus payments have proper supporting documentation and approval, we query the statewide payroll system for individuals with overtime or bonus pay. We use a ratio to determine which individuals to review in detail at specific agencies.

GEORGE D. STRUDGEON, CPA, CGFM, member of the VSCPA Editorial Task

SUMMARY

Force. Contact him at george.strudeon@apa. virginia.gov.

One of our office’s IT auditors has a sign at his desk that reads, “There are only 10 kinds of people: Those who understand binary and those who don’t.”

APRIL V. CASSADA, CPA/CITP, CISA, VSCPA Leadership Academy

The same thing can be said for auditors. There are those who understand that many of today’s business transactions are governed by the controls built into the applications, and those who don’t understand it. As you can tell from our list, we fully embrace using our auditees’ data to ensure application controls are working, entities are following the rules and no stone is left unturned when it comes to taxpayers’ money. n

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Auditor of Public Accounts’ audit directors who contributed to this article, pictured clockwise above, are:

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instructor

ERIC M. SANDRIDGE, CPA, CGFM, VSCPA Leadership Academy participant

DEANN B. COMPTON, CPA, VCCO KAREN KYTE HELDERMAN, CPA, CISA, PMP

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Membership on the Go!

The grocery store. The doctor’s office. The Metro. Wherever you go, the VSCPA is right there with you.

Last year, we redesigned VSCPA.com for mobile devices, including a simpler layout with buttons replacing most text links. The menus were simplified to keep the options our members use most.

The old VSCPA.com is still there for you to access on your laptop or desktop computer. But remember — wherever you are, the VSCPA is just a touch away.

Virginia Society of Certified Public Accountants

Past the Punch-In How a great app can help you track time like a pro.

BY ADAM G. CHAIKIN, CPA/CITP, CGMA

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The days of punching a time card may be long gone, but tracking time is getting more high-tech than ever.

From time to time, we all come across an app or a program that just works so well we want to share it with everyone. Over the last six months I had such an experience, and did some further investigation to share with the readers of Disclosures. I own a small consulting practice that specializes in areas where accounting, finance and technology meet. My work includes the use of subcontractors where necessary. All of my projects are billed on a time and materials basis. For that reason, the accurate capture of time for me, my employees and my subcontractors is very important.

I first stumbled upon Harvest (www.getharvest.com) as a subcontractor to a Tysons Corner consulting firm called Synaptitude Consulting. On this contract, I was a project manager for an important client that needed a web-based dashboard to be created. Upon joining, I was provided with log-in credentials to Harvest to track my time.

I became hooked shortly thereafter.

The most appealing aspect of the app is its ease of use. At the start, keeping accurate time records should not be the difficult to begin with. The user interface is crisp and clean and achieves the task without any introduction.

Further, the menu-driven access is intuitive and easy to follow. As a project manager, I have access to reports and dashboards that give me instant insight to what my team is working on.

I was also impressed by the app’s accessibility.

I can log in through my web browser or on a phone or tablet. In addition, I can record time in the Google Chrome browser plug-in.

This is one of the coolest features I have seen in a long time — you can record time without

leaving your current browser page. And you have two options: You can either enter a number of hours that you have worked or you can start a timer to track time of what you are doing.

After using the app on the job at Synaptitiude, I adopted it for my firm. I currently use it across a half dozen projects. In addition to time capture, I use it for creating estimates and billing my customers. I have reduced the amount of time spent on both of these tasks by using Harvest, which is why I feel more people can get a productivity boost out of the system.

Harvest is integrated with a number of useful applications, including Trello (https://trello.com) and JIRA. I use both of these applications in my daily work. Trello is a cloud-based organization tool that is closely aligned with Agile project management. JIRA is part of the Atlassian (https://www.atlassian. com) toolset, which is commonly used by software developers. Both of these tools are worthy of further investigation.

Having enjoyed Harvest so much, I interviewed Harvest co-founder Danny Wen to learn more about the app and how it can help CPAs.

CAN YOU TELL ME A LITTLE ABOUT YOURSELF AND YOUR ROLE AT HARVEST? My name is Danny Wen and I’m the cofounder of Harvest. My good friend Shawn Liu and I started Harvest in 2006 as an offshoot to our small design and technology consultancy. Our background is in computer science but we both love design, so we founded a company centered on design and technology, which allows us to practice both

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crafts. Because of the traction Harvest was able to gain in its first year, we stopped our consulting business and for the last seven years have focused 100 percent on nurturing and growing Harvest.

We’re now a company of over 30 people spanning around the world (see http://www. getharvest.com/made-on-earth) and my dayto-day is focused on supporting our teams on a variety of things, from product to marketing to recruiting.

WHAT IS THE IDEAL CLIENT FOR HARVEST — IS THERE A CERTAIN MARKET YOU ARE TARGETING? HOW MANY USERS DO YOU HAVE? We focus on building a great product for businesses that have between five and 50 employees. This focus allows us to keep things simple and lightweight, but build enough sophistication to really make things more effective for teams. That said, we’re fortunate to attract customers on either end of that spectrum. Freelancers and really small businesses like using Harvest because they see it used by their slightly larger and more established counterparts. They know it’s a service that can grow with them. Larger companies are drawn to the simplicity and speed that smaller companies get to have, and they want to bring that ease to their staff.

Asking people to track or enter time is never a fun thing, but if large employers can make that easy on their staff, they’ll end up with better data and reports.

WHAT ARE THE VARIOUS PRICE POINTS FOR HARVEST? It’s basically $10 per user, per month. u

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The only exceptions are if you’re on our solo plan (it’s $12 a month) or if you subscribe to our yearly plans, you receive a 10 percent discount off all our prices. And if you are a large company, we also work with you on volume discounts.

HAVE YOU THOUGHT ABOUT FOCUSING ON THE MARKET OF CPAs OR THEIR CLIENTS?

Asking people to track or enter time is never a fun thing, but if large employers can make that easy on their staff, they’ll end up with better data and reports.

— Danny Wen, Harvest co-founder

We’ve definitely looked into it. CPAs play an important role in our customers’ businesses.

What we’ve found so far is that if a CPA practice has a lot of professional services clients, which tends to be a great fit for us just because those are the workflows our offerings really optimize. We’re open to working with more CPAs directly and welcome folks to reach out if they want to talk more about that.

HOW DOES HARVEST DETERMINE WHAT PROGRAMS IT INTEGRATES WITH? SOME OF THE INTEGRATIONS THAT WORK BEST FOR ME ARE RELATED TO AGILE PROJECT MANAGEMENT, SUCH AS TRELLO AND JIRA. HOW DID YOU IDENTIFY THESE PARTNERS AND WHAT IS NEXT FOR YOUR APPLICATION? We look at what our customers are using.

Our goal is to be a seamless part of our customers’ ecosystem. We’re not going build every function that a small business needs, so we simply want to make sure we’re integrated into the right places so we can offer a smooth experience all around.

One important thing to mention is that we work hard to provide not just an integration, but a great integration experience. That means really understanding what the workflows are for our customers and creating an integration experience that maps to that reality. We don’t want to just import or export a few things via an API and call that an integration; it’s important that we consider the user experience and identify what our customers really need out of that integration.

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As for what’s next, we’re working on two major things. The first is helping Harvest customers get an even better grasp of how effective and profitable their projects are. We’re doing this by introducing a new set of reports and ability to track costs associated with a project.

The second major thing we’re doing is creating a new product called Harvest Forecast (www. getharvest.com/forecast). If you’re running a consulting or professional services team, we want you to have a truly effective way to plan your team’s schedule and utilization.

We’ve created a visual and seamless way to coordinate who’s working on what and when.

It’s time planning for the modern age. With it connected to Harvest, you have a powerful combination to plan and track projects.

Our ultimate goal here is simple: If you are using Harvest tools to run your professional services business, we want you to operate with insights that were previously really difficult to get with any solution [such as]: How profitable are my fixed fee projects? Which clients are my best clients? How are we doing against our estimates and budgets? Who is overbooked and when do we need to hire?

Both of these initiatives are in beta and we’re looking forward to sharing them with all our customers soon.

HARVEST IS VERY ACCOMMODATING FOR THE MOBILE USER. I USE IT ON BOTH MY IPAD AND MY IPHONE, NOT TO MENTION THE GOOGLE CHROME PLUG-IN. CAN YOU TELL ME A LITTLE ABOUT YOUR MOBILE STRATEGY AND WHO YOU HOPE TO TARGET WITH IT? Our mobile strategy is simple. Just about everyone in the modern workforce has a smartphone now, so we want to make available some of the core Harvest features right on mobile devices so it’s available to them anywhere anytime.

With things like time tracking, we aim to build a tool not just for the managers or business

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anticipating this one.

ARE YOU CONSIDERING ANY INTEGRATION PARTNERS IN THE PAYROLL PROCESSING ARENA? Most of our customers rely on salaried employees with occasional contractors, rather than part-time employees, so we haven’t seen a huge need on the payroll front. That said, we know there’s something to consider here, so we welcome input from CPAs on this.

AS YOU CAN TELL I AM HOOKED ON HARVEST FOR MY BUSINESS. HOWEVER, IS THERE FUNCTIONALITY YOU THINK HARVEST HAS THAT I MAY HAVE OVERLOOKED?

The Harvest app time-tracking interface is easy to use.

owners, but also the end users who have to actually enter time. These are the people who have to do this tedious thing and we want to make it really easy for them. Sometimes that’s on the desktop, but sometimes they forgot to enter something and being able to do that on their smartphone when they have a free moment is simply very useful.

So our target is simply anyone who appreciates using modern technology to make their lives easier.

ON APRIL 17, YOU ANNOUNCED THE INTEGRATION OF HARVEST WITH QUICKBOOKS ONLINE. WHO IS YOUR MAIN COMPETITOR IN THAT MARKET? WHAT ADVANTAGES DO YOU HAVE? There are a couple very timesheet-focused players who have built on top of QuickBooks.

I think where we’re different [is] in three areas.

First, we’ve been around for eight years now, and in that time have put tremendous focus on design and ease-of-use for our users. This is reflected in how we’ve made this easy for the user: from tracking time on the web to mobile to other applications, it really is as convenient as possible. The second area is the focus on helping customers turn that time into meaningful, actionable reports so they can better plan their next project or better converse with their clients about budget by supporting it with data. Lastly, we’ve built invoicing to allow our users to manage client relationships that have different billing rates easy. The sum of these key areas really make Harvest a truly solid service for small businesses. Currently, and it’s been less than a month so far, thousands of customers are using our QuickBooks integration. The uptake was fast as many customers have been eagerly

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Harvest does a great job of creating invoices that you can send online. We call these Web Invoices. The great things about Web Invoices is that you can enable online payment as well.

When you have this turned on, we found that most of our customers see their invoices paid twice as fast versus having to wait for a check in the mail. By offering that convenience to their clients, it speeds up their collection time which means better cash flow. That’s an awesome feature that sometimes people overlook just because they don’t know about it or haven’t tried it yet.

HOW MANY PAYING CUSTOMERS DO YOU CURRENTLY HAVE? As a private company, we don’t share specifics here. What I can tell you is that we have, and appreciate, the tens of thousands of paying customers now in over 100 countries.

A CUSTOMER TESTIMONIAL Having had such a good discussion with Danny, I also spoke to another user of the system: John Karanikolas, managing partner at Synaptitude Consulting. I wanted to make sure the readers had a fair and balanced report. u

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CPAs play an important role in our customers’ businesses. A CPA practice has a lot of professional services clients, which tends to be a great fit for us. Those are the workflows our offerings really optimize.

— Danny Wen

DID YOU EVALUATE ANY OTHER TIME CAPTURE SOLUTIONS BEFORE USING HARVEST? Yes, we evaluated a number of other products. We were looking for products that would integrate directly with Google Apps and be easy to use. We searched in the Google App marketplace for contenders and did “tryouts” for the finalists.

Yes, timesheets can only be submitted by the week. For billing purposes, it would be helpful to allow timesheets to be submitted at the end of the month, even if that day does not come at the end of the week. It would also be helpful to enable project managers to mark specific time as being billable or non-billable, instead of only allowing the person recording the time to make that determination.

WHAT LED YOU TO CHOOSE HARVEST?

WHAT INTEGRATIONS WOULD YOU LIKE TO SEE IN THE FUTURE, IF ANY?

It had the simplest interface that would make it the most straightforward for our staff to enter their time. We wanted to ensure that we wouldn’t be putting roadblocks in place for people to record their time accurately. We didn’t need an enormous feature set — we wanted simple and easy to use.

We are happy with the level of integration that exists presently. It would be nice to have a Windows desktop widget to record time. Currently you can do that with a Chrome plug-in, but having a taskbar icon would be great. n

DID THE INTEGRATION WITH THE ATLASSIAN TOOL SET OR ANY OTHER SOFTWARE FACTOR IN YOUR DECISION?

Disclaimer: Thought2Execution LLC has a paid subscription for the Harvest application for five users. I have received no compensation from Harvest or any vendor in this article. These opinions are my own.

The integration with Google Apps was the major factor. We did not integrate with Atlassian until after Harvest had already been in place.

WHAT DO YOU THINK IS THE BEST FEATURE THAT HARVEST HAS TO OFFER? The simplicity. It is easily understood with virtually no learning curve.

The simplest solution is just to write your time on a piece of paper and hand it in at the end of the week. This was the closest we could get to that in an integrated format.

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Thought2Execution LLC, a Virginiabased consulting firm specializing in finance, project management and ERP systems implementations. * Adam.Chaikin@ Thought2Execution.com connect.vscpa.com/AdamChaikin linkedin.com/in/adamgchaikin

IS THERE ANY BIT OF FUNCTIONALITY THAT YOU JUST DON'T LIKE?

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ADAM CHAIKIN, CPA/CITP, CGMA is founder and principal of

@Thought2Execute

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VSCPA news

CPA Day of Service Is Sept. 19 We want you to serve! Join your colleagues in

Volunteers from Kositzka, Wicks & Company on the CPA Day of Service in 2012.

representing the CPA profession and making a difference in the community on Friday, Sept. 19. Hundreds of CPAs and employees of accounting firms volunteer statewide 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. Please volunteer by Sept. 18. Visit www.vscpa.com/DayofService or contact VSCPA Member Relations Specialist Laura Cobb at lcobb@vscpa.com. n

Are you ready for health care reform changes?

IT’S MAP TIME How does your firm stack up against others in the profession? Curious about the latest technology trends in firms around the country? How are you and others leveraging staff in the current economy? Find out by taking part in the CPA profession’s premier benchmarking study — the American Institute of CPAs (AICPA) Private Companies Practice Section (PCPS)/Texas Society of CPAs (TSCPA) National MAP Survey.

The survey covers key practice management issues that will allow your firm to compare its financial performance and operations to other firms, as well as gain strategic insights into building a more profitable and rewarding practice. Additionally, survey results will help accounting firms benchmark themselves against same-sized firms regionally and nationally.

Your dedicated Digital Benefit Advisors team of experts will guide you through how to make the most sound benefits decisions for your business and your clients.

The survey will be open through mid-July.

For more information, visit www.aicpa.org/ MAPSurvey. n

>> YOU TOLD US!

Brian Marks, Executive Director P: 877.998.7272 www.digitalbenefitadvisors.com/vscpa

According to legend, an ostrich

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probably not the best approach.

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According to the 2014 VSCPA Communications Survey, 91 percent of members say the VSCPA provides the right amount of information to members. Visit www.vscpa.com/2014CommSurvey for the full results. n

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'WE LOVE BOB' >>

Member of the Year: Bob Baldassari, CPA Baldassari’s brain had been going through demyelinzation, in which the protective sheath surrounding his neurons was damaged. The damage led to the mass on his brain and his other cognitive issues.

“They don’t know what had caused it to deteriorate,” he said. “They’ve done all sorts of testing. They know that it was not cancerous. They know it was not a stroke. They checked for Lyme disease, they checked for encephalitis, they checked for multiple sclerosis and some other things. Even to this day, they don’t know what cause the demyelination.

They know what it was, but they don’t know what caused it. They think that it could have been some sort of a virus, but they don’t know.

“When I first got out of the hospital, the neurologist said it could take months before I got back to where I was. Then she said it could be up to a year. At about the one-year mark, in March or February, I went back and she said it could be years. They added this ‘S’ on the end.”

It’s been a tumultuous year for Bob Baldassari, CPA, but his commitment to the accounting profession and the VSCPA never wavered.

That’s why Baldassari, a partner at Matthews, Carter & Boyce (MCB) in Fairfax, is the VSCPA’s 2014 Outstanding Member of the Year.

That honor, and Baldassari’s return to MCB, was nearly unthinkable a year ago, three months after he entered Fairfax Hospital with balance and memory problems.

“Once, I had forgotten how to make the ‘R’ when signing my name,” he said. “It was very strange. Another time, I forgot how to make the question mark. All of these things happened within a week, but I thought I was tired and it was nearing the end of tax season. When they all happened, I decided to go into the hospital and get checked out.”

The problem was more grave than Baldassari could have imagined.

When asked further questions, he said it was 1983, and he could not name the president of the United States. After an MRI revealed a mass on his brain, his doctors determined he needed to get into surgery as soon as possible.

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Baldassari estimates that he’s about 80 percent recovered from a physical standpoint, and his cognitive abilities came back enough for him to return to work part-time in June. He still struggles to do math in his head, but fortunately, his tax knowledge never went away.

“I’m still as good as I ever was,” he said. “When it comes to putting things on a spreadsheet, sometimes it looks like just all numbers and I can’t understand it. They call that ‘working memory.’ We have different types of memory — short-term memory, long-term memory, things like that. Working memory involves several bits of information that you have to manipulate.

“Bob loves his partners, as well as all of the people he works with, and we love Bob.”

— Jude Covas, CPA

“I can be sitting here in my office discussing tax law, history of tax law, how things work and different ratios. I can’t calculate the bottom line, but I know how it works, so to speak.”

Baldassari got plenty of help from his coworkers at MCB, both during his absence and today. Their support and the messages he got from clients were a major part of his psychological recovery.

“When clients would call and staff would explain, ‘Bob’s out on medical leave now,’ some clients would call me at home,” he said. “I enjoyed feeling that somebody cared about me.”

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Baldassari can also get around well enough outside of work — for one cognitive test, he went to a mall, then left through a different door and found his car. He rarely drives when he has someone to drive for him — usually his wife, Sue.

2014–2015 VSCPA Board of Directors

“Fortunately, she does not work outside the home. She was able to be with me the entire time,” he said. “Two or three kids were at home the entire time, so if I want to do something, they would be at home with me.

The balance issues have also robbed Baldassari of his other favorite method of transportation, motorcycles. He’s considering getting a threewheeler to help fill the void.

That’s just one of the small adjustments that constitute Baldassari’s reality 16 months after his hospitalization. He’s doing what he can, professionally and personally, and relying on small changes and help from others to fill in the gaps.

“When this happened, my partners really went above and beyond any expectation,” he said. “They contacted clients, they looked at what my workload was and re-allocated my workload to the other partners.

“I love my partners — they’re so great. I don’t think I got a single call when I was in the hospital. I’m sure that there were questions, but they were able to handle questions and talk to clients.”

“Bob loves his family, and his family loves Bob,” MCB managing partner and VSCPA member Jude Covas, CPA, said. “Bob loves his clients, and his clients love Bob. And I believe Bob loves his partners, as well as all of the people he works with, and we love Bob.” n

Left to right: JamieWohlert, CPA; Dian Calderone, CPA; Lisa Germano, CPA; Susan Ferguson, CPA; Victoria Jones, CPA; Mike Wagner, CPA; Colette Wilson, CPA; Gary Thomson, CPA; Staci Henshaw, CPA; A. Marshall Northington, CPA; Andrew Martin, CPA; Richard Groover, CPA; Stephanie Peters, CAE; Marc Filer, CPA; William Hardy, CPA. Not pictured: Bradley Haun, CPA, and Bradley Nicklin, CPA.

CHAIR Colette Y. Wilson, CPA

VSCPA PRESIDENT & CEO Stephanie R. Peters, CAE

CHAIR-ELECT Lisa C. Germano, CPA

BOARD OF DIRECTORS Dian T. Calderone, CPA Susan Q. Ferguson, CPA Richard E. Groover, CPA William E. Hardy, CPA Bradley S. Haun, CPA, MACCT Victoria W. Jones, CPA Bradley P. Nicklin, CPA A. Marshall Northington, CPA Gary R. Thomson, CPA Mike Wagner, CPA, CGFM

VICE CHAIRS Marc E. Filer, CPA Staci A. Henshaw, CPA Andrew T. Martin, CPA Jamie C. Wohlert, CPA

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Meet the Top 5 Under 35 “I don’t see myself ever going anywhere,” he said. “You never know what’s out there in the future, but I’m comfortable where I am.”

DAN GEORGE, CPA Senior Auditor, Cotton & Company, Alexandria Dan George didn’t set out to be an accountant, but the profession found him. He was working with grants and budgets at Meridian International, a Washington, D.C., nonprofit, when the company’s CFO asked him if he’d rather be on the accounting side.

George, 31, decided to make the move, and he’s been making up for lost time ever since. He spent three years as an accountant at Meridian while getting his required classes in order and studying for the CPA Exam, which he passed in June 2013. He now works as a senior auditor at Alexandria firm Cotton & Company, where he spends his time on a financial consulting engagement with the U.S. Securities and Exchange Commission.

From left to right: Andrew Grossnickle, CPA; Dan George, CPA; Brent Simer, CPA; Kristin White, CPA; Roy Emmons, CPA.

While George was happy at Meridian, he knew he needed to branch out to get the most out of his career. For him, that meant public accounting and joining the VSCPA as soon as he took the job at Cotton.

ROY EMMONS, CPA

“You’re around more experts,” he said. “You have access to a much bigger quantity of knowledge and institutional memory than when you’re working in a finance shop for a nonprofit. It’s the people and the knowledge and the expertise that they bring. I can tap into that. You can access it more and more in public accounting.”

Bruce, Renner & Company, Winchester Bruce, Renner & Company in Winchester is a small firm in a small town, and that’s just fine with Roy Emmons. He’s lived in Winchester his entire life — including college, where he got his bachelor’s degree from Shenandoah University — and savors the laid-back atmosphere and close relationships with his clients.

That corporate culture is why Emmons, 35, is the only member of the 2014 Top 5 Under 35 without a title next to his name.

“We don’t get bogged down with the politics of titles,” he said. “We just try to work hard and provide the best service for our clients. Titles, ranks and all that stuff just doesn’t fit our firm.”

Emmons provides tax services, financial statement review and compilation for individuals and businesses. At the VSCPA, he serves on the Tax Advisory Committee and the Online Programs Planning Task Force and was in the inaugural class at the Society’s Leadership Academy for young professionals.

Another reason Emmons loves his job is the bond he has with his boss, Larry Renner. Both are motorcycle enthusiasts, and they take time off each year to take a long ride together. Last year, they went to Colorado, New Mexico and the Sturgis Motorcycle Rally in South Dakota.

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George always had that financial background — he worked in financial management at the U.S. State Department when he was a student at George Washington University. He’s nearing his master’s degree from St. Joseph’s University. And he got involved with the VSCPA as soon as he got the job at Cotton & Company and has written for Disclosures magazine and volunteered for the Speakers Bureau.

“There’s so much tunnel vision when you’re doing one thing for one client all the time,” he said. “Being new to public accounting, being able to get out and see everybody in the profession and get that perspective was valuable.”

ANDREW GROSSNICKLE, CPA Member, Robinson, Farmer, Cox Associates, Fredericksburg People enter the accounting profession for different reasons — financial, intellectual, even emotional in some cases. Andrew Grossnickle became an accountant, at least in part, for reasons of fashion.

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VSCPA news “Growing up on a farm background, I was intrigued by wearing a shirt and tie every day to work,” he said. “Over time, that has lost its luster, but when I was in school, I wanted to dress up every day and go to work.”

Grossnickle, 33, grew up on a farm in western Maryland with a family that pushed education and continues to do so. His father, Larry, died in 2011, and soon after, Andrew and his family started the Grossnickle Family Scholarship Fund through the Community Foundation of Frederick County for students who from farming backgrounds or want to pursue an agriculture-related degree.

Grossnickle, though, left the farm to attend Bridgewater College and obtain a master’s degree in forensic accounting from Florida Atlantic University. He parlayed that education into an internship with Robinson, Farmer, Cox Associates (RFCA) after his junior year at Bridgewater.

After graduating, he took a full-time job in RFCA’s Charlottesville office. He moved to Fredericksburg when the firm opened an office there in 2006, and he’s been there ever since. He’s taken to the area and currently serves as president of the VSCPA’s Battlefield Chapter. But he hasn’t forgotten his farm roots.

“Growing up on a farm is where I got my work ethic,” he said. “The kind of work we do as accountants is much different from what we do on the farm, but we both do a lot of work. My dad set an example on the importance of personal connections, whether it be farming or another kind of work. It’s good to develop a good relationship with your clients, whether you’re selling them hay or doing tax work.”

BRENT SIMER, CPA Regulatory & Public Policy Manager, Deloitte, Washington, D.C. It’s the eternal question in the accounting profession: Tax or audit? For Brent Simer, the answer is “neither.”

Simer is the regulatory and public policy manager at Deloitte’s Washington office, where he focuses on the firm’s relationships with regulators such as the Public Company Accounting Oversight Board (PCAOB) and the U.S. Securities and Exchange Commission (SEC).

Simer, 29, got into the lobbying field almost by accident. He was a finance and marketing major at Miami University in Ohio and upon graduation worked at Veris Consulting, a small accounting firm in Columbus, Ohio. He was in the process of sitting for the CPA Exam when the firm closed his office and transferred him to corporate headquarters in Reston.

He left Veris two years later to join Deloitte and focused on forensic accounting for a year before moving to the firm’s regulatory and public policy group. He found that his work at Veris on litigation cases related to securities law made him a natural success in his new position.

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“It was a perfect fit,” he said. “I came over with the understanding of the SEC and the PCAOB to focus on our relationships with the SEC and the PCAOB.” “It’s a way to practice public accounting but not actually be in audit,” he said. “There’s nothing wrong with audit — I spent a few years aggressively auditing auditors. It’s a great profession, a great career. It’s just not the one that I choose. This fits my personality. It’s very close to the profession, but it’s a support role.”

Simer is active in the VSCPA’s government affairs initiatives and also serves on the Young Professionals Advisory Council. While he’s happy with his Big Four position, he sees the need for CPAs to band together as a profession.

“It’s very important that we as CPAs give back to the profession ourselves,” he said. “It’s not a profession segregated by big firms, small firms, medium-sized firms. It’s a profession in general. Everyone has a duty once they become a CPA to give back and make a difference in the profession.”

KRISTIN WHITE, CPA Senior Accountant, Wells, Coleman & Company, Richmond VSCPA members volunteer with the Society for a variety of reasons. For some, it’s that they want to use their skills to help better the profession.

For others, it’s an opportunity to add new tools to their toolbox.

Kristin White falls into the latter category. The senior accountant at Wells, Coleman & Company in Richmond is a member of the VSCPA Educational Foundation Board of Directors and has found her biggest challenge in making donor calls.

“I’m not that good at it, but I’m getting better,” she said. “I enjoy working with the other board members and getting different perspectives. There are people on there who are at different points in their career, from young CPAs to those getting on toward the end of their career. It’s interesting to get that perspective.”

White, 34, has been at Wells Coleman since finishing graduate school at the College of William & Mary in 2003. (She got her bachelor’s degree from Radford University.) She manages audits — mostly of nonprofits and homeowners’ associations, along with some businesses — and reviews the majority of individual tax returns that the firm prepares.

While she doesn’t necessarily enjoy making cold calls, she’s more than willing to put herself out there in other ways. She’s been a stage actress for the New Kent Stagehands for nine years, playing the lead role in “Murder on the Rerun” and the villain in her most recent performance, “Christmas Bells.” Not surprisingly, she puts her accounting expertise to good use, sitting on the troupe’s board of directors in addition to her work under the lights. n

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Meet your new chair: Colette Wilson, CPA better if there was more diversity along the way.”

Wilson, 43, has spent her entire professional career at Cotton & Company in Alexandria, although she recently stepped away from the firm to focus on her family and her VSCPA duties. The firm’s small size — fewer than 50 employees when she joined — made it an easy transition from years of small classes in militaryrun schools and what was then Mary Washington College in Fredericksburg.

At Cotton, which deals largely with governmental agencies and programs, Wilson focused on audit and advisory services to federal agencies. She stayed with the firm for nearly 20 years because of the family atmosphere and her passion for the company’s mission.

“We audit[ed] the federal government itself. It is, to me, one of the highest levels of public service,” she said. “We were advising and auditing federal agencies on their dollars, on their funding, on their financial statements, on their audits of how they’re spending taxpayers’ money. I feel like it very much was a public service.”

Colette Wilson, CPA, is in uncharted

territory as the first African-American female chair of the VSCPA Board of Directors. Fortunately, uncharted territory is a place where she has plenty of experience.

Growing up in an Air Force family meant that Wilson did a lot of moving around as a child. She lived in Germany, Guam and several different states. Her itinerant childhood instilled in her a love of travel and drummed out any shyness.

“I love to travel. I love to meet new people,” she said. “I like to be engaged with a variety of people. I have no problem meeting new people and trying to help them as well.”

Helping people will be a major priority for Wilson as she takes over from outgoing chair Jim Shepherd, CPA. Another focus will be diversity and telling her own story.

“Thinking back to when I started out in my career, the number of African-Americans, the number of women in leadership positions, I can’t honestly say that I’ve seen a whole lot more,” she said. “I think that’s one area where I’ve taken the opportunity to step into various roles that people have introduced me to. It’s great being the first at accomplishing something and paving the way, but it would be even

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That’s behind her now for the time being as she focuses her energy on her children, Brandon and Olivia.

Originally, she hadn’t planned to continue on the VSCPA Board when she stepped away, but she soon discovered that the extra time lent itself perfectly to volunteer activities.

“At first, I had a lot of nervous energy,” she said. “I was used to getting up and traveling and commuting and being tied up at all times. Once I got past that nervous energy, I think that work ethic still has come back to me. I feel like I’m just as busy now with my kids and homework, but I’m able to spend more time with them at school, at their activities, being there for all their events.”

Part of Wilson’s focus as chair will be dealing with members of the generation just older than her own children. Increasing the diversity of the profession is a priority for her, and one way she can do that is by being visible in her role as the leader of the VSCPA Board.

“I’d like to see more diverse young professionals joining the accounting association, becoming certified and looking for those leadership positions,” she said. “I think that some people, if they don’t see people like them at higher levels, they do not pursue those higher levels. I think that those young professionals need to take opportunities, seek out opportunities and pave a way for themselves, looking for mentors and coaches along the way.” n

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49 members receive Life Member Award

>> VOLUNTEER OPPORTUNITIES Thanks to all the VSCPA members who have signed up to volunteer for the 2014–2015 membership year! The Society is now accepting volunteers for various opportunities at different times throughout the year, although some opportunities are open yearround. Volunteer opportunities currently open are:

At the VSCPA Leaders’ Summit on May 16, 49 members were

recognized with the prestigious Life Member Award. The award recognizes those who have been members of the VSCPA for at least 40 continuous years. Including this year’s inductees, only 420 members have received the Life Member Award in the VSCPA’s 105-year history. Recipients have their annual VSCPA membership dues waived and will continue to receive all benefits extended to VSCPA members, including all services and publications. They are also honored with a special lapel pin and certificate of recognition. This year’s honorees are: John F. Ames, CPA Michael R. Andrews, CPA Martin R. Atwood, CPA John P. Baber, CPA Richard S. Badger, CPA William T. Bartelme, CPA Jane P. Birckhead, CPA Douglas L. Bowles, CPA James R. Burnett, CPA Nelson L. Castner, CPA Peter N. Chase, CPA Edward N. Coffman Michael L. Cranston, CPA Paul M. DesJardins, CPA Wayne L. Edmunds, CPA Mary A. Fanshaw, CPA Errol R. Flynn, CPA Thomas R. Frantz, CPA Roger R. Fulton, CPA

Willard F. Robins III, CPA Gerald W. Rosson, CPA Russell E. Shipe, CPA Ronald E. Shuey, CPA James E. Spitler, CPA J.M. Todd, CPA Richard G. Troup, CPA Charles E. Walton, CPA Donald R. Watson, CPA C. Frederick Westphal Jr. William E. Winn, CPA n

Edward Muse Gantt, CPA Gary S. Ginsberg, CPA Russell L. Griffin, CPA David A. Gruber, CPA Gerald L. Hagen Jr., CPA Herman W. Hale, CPA James Hammond, CPA Edward I. Hardy Jr., CPA Bruce C. Holbrook, CPA Richard B. Kleese, CPA, Jeffrey A. Kohne, CPA Sen. Kevin G. Miller, CPA Alvin L. Moss, CPA F. Heath Myers Jr., CPA J. Randall O’Neal Gary D. Okes, CPA James V. Poti, CPA Barry L. Reisig, CPA Lloyd B. Ritter, CPA

DISCLOSURES

• Editorial Task Force (closes July 31) • Management of an Accounting Practice Task Force (closes July 31) • CPA Day of Service (closes Sept. 18) • Media Ambassadors • Legislators’ Tax Guide Task Visit www.vscpa.com/ VolunteerSchedule to learn when you can sign up for your desired opportunity. n

THANK YOU, 100% FIRMS! Due to space constraints, the list of VSCPA 100% Member Firms has been omitted from this issue. A 100% Member Firm is simply a Virginia CPA firm or company that has all of its CPAs enrolled as members in the VSCPA. These firms show their commitment to their employees, the profession and the association.

Check www.vscpa.com/100Percent for a complete, up-to-date list. n

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Congratulations to the following members!

NEW HIRES >> CAROL BASSETT, CPA, has joined Christopher Enright, CPA, in Richmond, as an accounting supervisor.

MANDY BELYEA, CPA, has been named director of finance in Shenandoah County.

STEVE PERRY, CPA, has been named to the board of the Dinwiddie County Chamber of Commerce. He is a sole proprietor in Colonial Heights.

ZACHARY BURROWS, CPA, has joined McPhillips, Roberts & Deans in Glen Allen as a senior accountant in the firm’s assurance practice.

CHIPPER STARK, CPA, has joined Capitol One in Glen Allen as principal auditor in the corporate audit services division.

MARTHA MAVREDES, CPA, received a special leadership award from the Richmond Times-Dispatch for her work as the head of the Virginia Auditor of Public Accounts.

BRIAN WILKINS, CPA, an accountant at Gregory & Associates, PLLC, in Petersburg, has been named to the Petersburg Chamber of Commerce Board of Directors.

Mandy Belyea, CPA

PROMOTIONS >>

JOSEPH WITT, CPA, senior vice president at Old Point National Bank in Hampton, has been named treasurer of the Old Point Financial Corporation Board of Directors.

MICHAEL BELL, CPA, was named managing partner of Anderson & Reed in Roanoke.

FIRM NEWS >>

NELLIE GREEN, CPA, ALI GUNBEYI, CPA, and CATHY NADEAU, CPA, have been named shareholders at Strickland & Jones in Virginia Beach.

Alexandria firm HALT, BUZAS & POWELL has been named a finalist for the Helios Apollo Awards, which honor organizations in the Washington, D.C., area that promote employee development as part of their culture.

KAREN JOHNSON, CPA, CATHY PENNINGTON, CPA, and ANDREW YOUNG, CPA, were named shareholders at Renner & Company in Alexandria.

Glen Allen firm Keiter has promoted PETER THACKER, CPA, to senior manager in its valuation and forensic services practice.

BECKY YEATTS, CPA, has been promoted to assistant vice president at American National Bank in Danville.

Peter Thacker, CPA

KPMG has been named “Best Overall Consultancy” by Operational Risk & Regulation magazine.

LISA TAYLOR, CPA, has opened an office at 400 W. Gordon Avenue, Suite B, in Gordonsville.

MERGERS & ACQUISTIONS >> COUNCILOR, BUCHANAN & MITCHELL has acquired Washington, D.C., firm STOKES & COMPANY. n

>> FIND THE CPE TEST ONLINE

APPOINTMENTS & AWARDS >> STEPHEN ADAMS, CPA, principal of The Pomoco Group in Hampton, has been appointed to the Old Point Financial Corporation Board of Directors.

DREW BARRINEAU, CPA, a tax accountant at Norfolk Southern Corporation in Roanoke, has been elected chairman of the Roanoke County School Board for the third time.

Looking for the Self-Assessment Exam for 1 CPE Credit?

We are no longer printing the test questions in Disclosures to save space, but it is still available online for credit at www.vscpa.com/July2014DisclosuresExam.

BRUCE ELLIOTT, CPA, of D’Amelio, Cohen & Associates in Baltimore, received the 2014 West-Whitelow Humanitarian Award from Bridgewater College.

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Martha Mavredes, CPA

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Staff news

From left to right: Rocio Gibbs; Molly Wash, CAE; Brenda Fogg, CAE; Darshae Dabney; Laura Cobb; Zane Urtane

Member Relations Coordinator ROCIO GIBBS celebrates her 16th anniversary with the VSCPA on Aug. 13. Academic & Career Development Director MOLLY WASH, CAE, celebrates 10 years with the VSCPA on July 26. Member Relations Director BRENDA FOGG, CAE, marks her ninth anniversary with the VSCPA on July 11.

Technical Services Specialist DARSHAE DABNEY celebrates her seventh anniversary with the VSCPA on July 9. Member Relations Specialist LAURA COBB celebrates two years with the VSCPA on Aug. 6. Online Education Specialist ZANÉ URTANE marks her first anniversary with the VSCPA on Aug. 12. n

>> STAFF SPOTLIGHT: LINDA NEWSOM-MCCURDY BIRTHPLACE: Richmond FAVORITE VACATION SPOT: That is tough. I have not traveled extensively around the world, but I can tell you one place that is NOT my favorite … Taiwan. It was too hot! One place that I dream about going is the Malta Coast in Italy.

RECENTLY READ BOOK: “Sycamore Row” by John Grisham FAMILY: I was married June 23, 2014, to my wife, Lori. We live with our two dogs, Woody and Sawyer, and our cat, Theo.

PREVIOUS JOB: Immediately before my role here, I worked at Capital One and managed their enterprise reservation system for their meeting rooms and their WestCreek conference center.

WHAT DO YOU LIKE TO DO OUTSIDE OF WORK? I love to cook and garden. But my newest passion is my rescue Bernese Mountain Dog, Sawyer, a 5-year-old puppy mill mother. I love to watch her learn new things and find her doggie confidence.

WHAT’S YOUR FAVORITE PART OF YOUR JOB? The challenges of the up-and-coming trends in learning and figuring out how to reshape our programs to meet those trends and our attendees’ needs.

WHAT’S SOMETHING PEOPLE DON’T KNOW ABOUT YOU? My mother and I learned to ski at the same time. She was 50 and I was 25. We went on a mother-daughter ski trip together and got stuck on the ski lift and had to rappel down. n

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>> WHO’S WHO? 5

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VSCPA leaders visited Virginia Gov. Terry McAuliffe (center) on April 18. Stephanie Peters, CAE, is fourth from left; Jim Shepherd, CPA, is fifth from left; and Patrick Cushing, VSCPA legal counsel from Williams Mullen, is far right.

2.

Bruce Holbrook, CPA, at the CPA Honors & Awards on May 15

3.

Sam Derieux, CPA; Jamie Walker, CPA; Whit Broome, CPA; and Larry Samuel, CPA at the Leaders’ Summit

4.

New licensee Esinam Nduom, CPA, with her husband, Nana Kweku Nduom, at the CPA Honors & Awards on May 15

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Bob Baldassari, CPA, and Larry Samuel, CPA, at the CPA Honors & Awards n

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VSCPA educational foundation MEET THE FOUNDATION CHAIR >>

Monique Ford, CPA, aims for firm support she gained in those positions should help her in raising funds for the Foundation.

“The experience I gained from being the chair of the VSCPA will help me as the chair of the Foundation,” she said. “It will also open doors in getting me in to see some of the larger firms. Being a past chair of the VSCPA, people know me, and I think that will help.”

Raising funds is a major priority for Ford, who wants to maintain the Foundation’s financial stability. And a lot of that depends on help from firms.

CPAs are taught to avoid risk. One of their

main roles in many organizations is to help manage the risk a company takes on. Careful planning and due diligence are ingrained in the typical accountant; spontaneity and impulsiveness, not so much.

So don’t be too surprised when you hear about the details of the trip new VSCPA Educational Foundation Chair Monique Valentine Ford, CPA, took to Las Vegas in March. Don’t be put off by the fact that she arrived in the city with a boyfriend and left with a husband, or even that she got married in a teepee in a canyon. The careful planning was still there — she just outsourced it to her new husband, Mike.

“I was in Las Vegas for our annual convention for work,” she said.

“Mike and the kids had planned to come out and help me celebrate my birthday. The night after we celebrated, we did a helicopter ride over Las Vegas, where he proposed. He had already gotten the paperwork done for a marriage license. He had a minister lined up, a location lined up.

He had everything planned from beginning to end. All I had to do was say, ‘Yes.’” Ford, the chief financial officer (CFO) at Associated General Contractors of America (AGCA) in Arlington, may have a new name, but she should feel right at home in her new role with the VSCPA. Along with new VSCPA Political Action Committee (VSCPA PAC) Chair Elsie Rose, CPA, Ford is the first member to serve as chair of all three major VSCPA boards — the VSCPA and Foundation Boards of Directors and the PAC Board of Trustees — since the Society split the leadership of the three organizations.

Ford chaired the VSCPA Board in 2007–2008 and the PAC in 2005– 2006. Even though she now has a new name, the experience and cachet

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“The only way we’re going to grow the Foundation with any significant amount of money is to reach out to member firms,” she said. “The bulk of our contributions still come in form individual donations. We’re still growing, dollar by dollar, and every dollar is important. But to make any significant headway, we really need to get firms to commit to funding the Foundation on an annual basis.”

While Ford is leading the Foundation to support the future of the profession, there’s a personal side to the decision as well. Her oldest daughter, Sara, is in the process of choosing a college. She won’t be going into accounting, a decision Ford attributes in part to her own hectic springs.

“I wish I could convince my own children to go into accounting,” she said, “but they’ve seen firsthand how hard I work, and they don’t want to work that hard. I lead by bad example — it doesn’t need to be that way, but that’s the way I am. It doesn’t need to be an 80-hour-a-week profession. That’s a message we need to get out to students who are choosing their major.” n

>> SUPPORT THE FOUNDATION Your tax-deductible donation to the Educational Foundation is an investment in the future of the CPA profession. Make a difference for students today!

Donate now at www.VSCPAFoundation.com.

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Congrats, 2014–2015 VSCPA Educational Foundation Scholarship Recipients VSCPA GRADUATE SCHOLARSHIP ($1,000)

THOMAS M. BERRY, JR., SCHOLARSHIP ($2,000)

Katy Bergey of Harrisonburg, University of Virginia Jake Marshall of Virginia Beach, Old Dominion University Rose Muratore of Reedville, College of William & Mary

Kaitlin Caubo of Phoenix, Md., University of Virginia Christine Gimbar of Blacksburg, Virginia Tech

VERUS FINANCIAL PARTNERS SCHOLARSHIP ($2,000) Andrew Yoder of Harrisonburg, Eastern Mennonite University

VSCPA MINORITY SCHOLARSHIP ($1,000) Chanell Harris of Philadelphia, Hampton University Raven McGriff of Lancaster, S.C., Virginia State University Shai Sumpter of Newport News, Norfolk State University

VIRGINIA TECH DOCTORAL SCHOLARSHIP HONORING AUSTIN M. CLOYD, MATTHEW G. GWALTNEY & MAXINE S. TURNER ($2,000)

VSCPA PAST PRESIDENTS/CHAIR SCHOLARSHIP ($1,000) Roger Ford of Atlantic, Old Dominion University

Joseph Rakestraw of Christiansburg, Virginia Tech

WALL, EINHORN & CHERNITZER SCHOLARSHIP ($2,000) Paul Fitzsimmons of Lorton, James Madison University

VSCPA PH.D. SCHOLARSHIP ($5,000) Karen Green of Richmond, Virginia Commonwealth University

YOUNT, HYDE & BARBOUR SCHOLARSHIP ($2,000) Jean Sweeney of Richmond, Virginia Commonwealth University

VSCPA UNDERGRADUATE SCHOLARSHIP ($1,000) Madeline Kronberger of Ashburn, Radford University Matthew Rosenbaum of Marion, Radford University Jessica Woodard of Richmond, Longwood University

>>

CST GROUP SCHOLARSHIP ($2,000) Gregory Smith of Vienna, Virginia Tech

2014–2015 FOUNDATION BOARD OF DIRECTORS

The new VSCPA Educational Foundation Board of Directors

DIXON HUGHES GOODMAN SCHOLARSHIP ($3,500)

was installed at the Leaders’ Summit on May 16, 2014.

Emily Babski of Springfield, Virginia Tech

H. BURTON BATES SCHOLARSHIP ($2,000) Anthony Palucci of Blacksburg, Virginia Tech

CHAIR

BOARD OF DIRECTORS

Monique V. Ford, CPA

Courtney S. Barrack, CPA

CHAIR-ELECT

KEARNEY & COMPANY SCHOLARSHIP (2,500)

Randolph Shapiro, CPA

Michelle Ly of Culpeper, George Mason University Marietta Medrana of Virginia Beach, Old Dominion University

VICE CHAIRS Thomas M. Crutchfield, CPA Frederick L. White, CPA

MICHAEL E. MARES SCHOLARSHIP ($2,500) Taylar Cannaday of Forest, Lynchburg College

O. Whitfield Broome, CPA Dale P. Burgess, CPA Brian E. Deibler, CPA Christopher D. Ekimoff, CPA Heather K. Flanagan, CPA Christine C. Goodrum, CPA Nicholas A. Harrison, CPA

SECRETARY/TREASURER

Clare K. Levison, CPA

Tina Lambert, CAE

Thomas J. Lyden Jr.

MURRAY, JONSON, WHITE & ASSOCIATES SCHOLARSHIP ($3,000) Carrie Schalm of Midlothian, Virginia Commonwealth

Kelli P. Meadows, CPA Vugar T. Shahtakhtinskiy, CPA Randall R. Spurrier, CPA Kristin L. White, CPA

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CLASSIFIEDS OFFICE SPACE SPACE SHARING ARRANGEMENT — L.D. Springs, P.C., CPA. Space sharing arrangement with established CPA firm located at 8001 Braddock Rd., Springfield, Virginia. Beautiful space in quiet professional building. Great location right on 495. One or two offices available including phone, internet, and copy/scan/printing services.

Office sizes are 14x12. Conference room shared on a pre-schedule basis.

Kitchen facility shared with occupants. Monthly rental at $1,000 per office. Minimum of one year term. Email: lspring@spring-cpa.com / Fax 703-503-8338 / Phone 703-503-5400 (Ext.17) / Mail 8001 Braddock Road, Suite 320, Springfield, VA 22151

GROWTH, SALES & ACQUISITIONS BUYING OR SELLING AN ACCOUNTING PRACTICE? When you buy an accounting practice from Poe Group Advisors, not only will you get a great practice for your particular talents and skills, you’ll get something far more valuable than knowledge. You’ll get insight.

We take special care to thoroughly understand each practice we sell. That understanding — combined with our years of unmatched experience with successful transitions of accounting practices — helps you get the valuable insight to help you succeed. Selling? Check out our new guide to getting your practice ready for market.

Please visit www.PoeGroupAdvisors.com or email us at info@ poegroupadvisors.com. 888-246-0974 • • • • • • • •

CPA Practice in Richmond VA: Listing ID# VA1053, Asking $450,000 NE of Richmond, VA CPA Practice: Listing ID# VA1052, Asking $295,000 Virginia Beach, VA CPA firm: Listing ID# VA1054, Asking $425,000 Winston Salem CPA practice: Listing ID# NC1085, Asking $725,000 Charlotte, NC Tax practice: Listing ID# 1086, Asking $395,000 CPA practice in the Foothills of NC: Listing ID# NC1079, Asking $1,100,000 Asheville, NC area CPA firm: Listing ID# NC1094, Asking $1,000,000 Charlotte, NC area CPA practice: Listing ID# NC1087, Asking $260,000

NORTHERN VIRGINIA CPA SEEKS TO ASSOCIATE WITH ENERGETIC CPA who is interested in the eventual takeover of the practice. Strong technical skills in both reporting and tax a must. Ideal candidate will be individual who is committed to working in public accounting and has started their own practice. Respond with resume and cover letter to: VSCPA CC #89, 4309 Cox Road, Glen Allen, VA 23060 or classifieds@vscpa.com.

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THINKING OF RETIREMENT OR A CAREER CHANGE? Naab Consulting has been assisting sellers of accounting and tax practices for over 17 years. We specialize in selling only accounting practices and therefore understand the market. We offer no-obligation, confidential on-site personal consultations to discuss your situation personally. We offer a large database full of qualified buyers, financing for your buyer and confidentiality throughout the entire process.

If you like the idea of an experienced professional to guide you through the selling process, please contact us today at 888.726.6282 or Retire@NaabConsulting.com. Mention promo code #24 for additional incentives.

>> CONGRATS TO VIRGINIA’S NEWEST CPAs Robert Aceituno Fadi Alaeddin Nathan Andrew Adam Armstrong David Bouzy Marteen Bryant Shannon Carlton Valeryia Chapman Kenny Chernauskas Stephanie Childress Thomas Coppage Jessica Crippin Rohit Elhance Ken Fown Joseph Greeves Leo Griffin Andrew Grimes William Harrison Edward Herbst Manjit Kaur Javed Khan Hae Kong Daniela Kostyaneva Alison Lee Shondae Legrand Siyu Liu James Long Gao Lu Richard Machamer Romain Mareuil Caitlin Mesich John Michalowski Matthew Mizzell Cara Mongelli Robert Neil

JULY/AUGUST 2014

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Jonathan Nemecek Bach Nhan Vo Eli Orlofsky Michael Ortman Michael Parrish Hong Peng Eszter Polecsak Yuqing Puffenberger Kathryn Racelis Sara Roach Jill Rogan Justice Sakyi Jackeline Sanchez-Herrera Marcello Sandoval Shane Sarver Elizabeth Schaeffer Lauren Schneider Kyle Seymour Shuhong Shi Ryan Shipley Elizabeth Smith Johanna Snader Elisabeth Stein Victoria Tripp Anne-Marie Walker Casey Watson Raymond Wolf III Michelle Wright Hao Wu Lalitha Yallayi Amy Zhang

List from April and May. Compiled June 4, 2014. n

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I AM the vscpa EYE ON THE FUTURE >>

Two minutes with a student member

MARIETTA MEDRANA >>

Pursuing the language of business

Marietta Medrana is a rising senior at Old Dominion University majoring in accounting and finance and will be a summer intern at Dixon Hughes Goodman. She’s no bump on a log: She was treasurer of the Student Government Association, is a past president of Beta Alpha Psi and attended the 2013 VSCPA Leaders’ Institute. She’s also the 2013– 2014 recipient of the VSCPA Educational Foundation’s Dixon Hughes Goodman scholarship and the 2014–2015 recipient of the Foundation’s Kearney & Company Scholarship.

I AM PASSIONATE ABOUT… Experiencing different cultures. I’m a first generation Filipino-American and grew up in a bicultural home. I will be studying abroad at a university in Italy this fall and am excited to learn about the European business model while experiencing the culture and eating delicious Italian food!

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PEOPLE DON’T KNOW THIS, BUT… I spent 10 days kitesurfing in the Dominican Republic. I’ve never played organized sports, much less extreme sports. I fell more times than I want to admit, but it was an exhilarating experience.

MY ADVICE TO FELLOW ASPIRING CPAs IS… Have a mentor. Networking is important and making a strong connection with a mentor can be invaluable. Find someone who you respect and trust. Their knowledge and experience is invaluable. They can help you as a young aspiring CPA and through the different stages of your career.

I NEVER LEAVE HOME WITHOUT… My planner and cell phone. As a college student balancing academics, extracurricular activities and a job, it’s important to be organized. My planner helps me stay on schedule and keep up with my commitments.

JULY/AUGUST 2014

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I WISH STUDENTS KNEW… You don’t have to wait until you graduate to take advantage of opportunities. You can become a student member of the VSCPA and the AICPA. Be involved in an honors organization like Beta Alpha Psi. Joining Beta Alpha Psi was one of the best decisions I’ve made during my college experience. I have made great friends and had great experiences during my term as president, including winning first place in the Best Practices Competition at the 2014 Beta Alpha Psi Regional Meeting in March. There is so much you can learn in addition to the academic curriculum.

I ASPIRE TO BE A CPA BECAUSE… It will allow me to work with a wide range of businesses. As a kid, I loved watching segments on how things are made. It amazed me to see the behind-the-scenes operations.

Accounting is called the “language of business.” As a CPA, I’ll have a variety of clients from all different industries. n

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Looking for a change of scenery?

We will identify suitable candidates to carry on the success of the CPA firm you’ve worked hard to build. When the time comes to breeze into the next phase of life, we’ll be here to support the entire transition with our proven 5-step Seamless Succession™ process.

Thinking of selling? Learn about our unique process by going online to PoeGroupAdvisors.com or by scanning the code with your smart phone.

(Download the free Kaywa Reader in the app store.)

PoeGroupAdvisors.com • 1-888-246-0974 • info@poegroupadvisors.com

PRSRT STD US POSTAGE PAID PPCO

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

Change service requested

In the Nation, exclusive discounts are just the beginning.

Virginia Society of Certified Public Accountants members are rewarded.

As a member of VSCPA, you can save with special discounts on Nationwide® auto insurance. In addition, when you add rewards like Vanishing Deductible® ,* you can take $100 off your deductible for every year of safe driving, for up to $500 in savings.

Doesn’t it feel great to belong?

You wouldn’t be involved with VSCPA if you weren’t passionate about being part of a group that shares your values. We understand that feeling, because we treat customers like members. It’s one of the things that make us a different kind of insurance company.

Call Ronnie Shriner at (877) 683-3364 or visit nationwide.com/cps/pc-affinity-vscpa.htm for a quote today!

+ 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. 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 and Vanishing Deductible are service marks of Nationwide Mutual Insurance Company. © 2014 Nationwide Mutual Insurance Company. AFO-0144AO (06/14)