May/June 2012 - Florida CPA Today | Volume 28, Number 3

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contents Volume 28, Number 3

CEO-EXECUTIVE DIRECTOR Deborah L. Curry, CGMA SR. DIRECTOR OF MARKETING & COMMUNICATIONS Jan Dobson, CAE EDITOR Suellen D. Wilkins GRAPHIC DESIGNER Loleta K. Bolden PUBLICATIONS COORDINATOR Dianne Dearduff EDITORIAL COMMITTEE Douglas Day, CPA, chair Walter C. Copeland, CPA, vice chair Lynda M. Dennis, CPA • David Hochsprung, CPA Michael Kridel, CPA • Troy Y. Manning, CPA Pat Murphy, CPA • Laura Prevratil, CPA William C. Quilliam, CPA, Ph. D. All articles submitted to Florida CPA Today are subject to technical review, Editorial Committee review, space availability and editing requirements and restrictions. Please contact the editor before submitting unsolicited manuscripts.

Florida CPA Today publishes letters to the editor in its Members’ Forum. For information about the guidelines, visit www.ficpa.org/Content/Members/Tools/Publications/FCT/ LettersToEditor.aspx.

Statements expressed herein are those of the identified authors and not necessarily those of the Florida Institute of Certified Public Accountants, Inc., nor should statements be considered endorsements of products, procedures or otherwise.

The FICPA reserves the right to reject any editorial material or paid advertising that does not meet Florida CPA Today’s qualifications or detracts from its ethical and professional standards.

Florida CPA Today is published bimonthly by the Florida Institute of Certified Public Accountants, Inc., P.O. Box 5437, Tallahassee, FL 32314. Telephone: (850) 224-2727 or (800) 342-3197. (Street address: 325 West College Ave., Tallahassee, FL 32301.) Visit our website at www.ficpa.org.

This magazine is provided to members of the FICPA. No specific amount of your dues, either expressed or implied, is for this publication. This magazine is not available for purchase by either FICPA members or nonmembers.

For display advertising information, contact the FICPA Marketing Department at (850) 224-2727. © 2012 by the Florida Institute of Certified Public Accountants, Inc. All rights reserved. Reproduction in whole or part is prohibited without the express written consent of the FICPA.

PRESIDENT’S MESSAGE

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5 Making way...

And following dad’s example of advocacy

COVER STORY 8 Florida wraps up 2012 Session

FICPA enjoys legislative success

FEATURES 12 CPAs play vital role in IRS

examinations 16 Auditor’s report to undergo major changes 19 To the rescue TAS helps unravel taxpayer issues 22 Simple? Maybe not.

Use caution with requests for third-party communications 26 Understanding FUPMIFA New law affects NFPs 34 FICPA membership works for you

DEPARTMENTS

7 DOR update 14 FICPA NewsFlash digest 30 News briefs 32 Student outreach 38 Educational foundation 42 New members 44 Marketplace 46 On the move

36 Meet Paul Brown, CPA 40 FICPA applauds outstanding CPE discussion leaders 41 CPAs see better times on the horizon Caution remains over hiring

Mission Statement

ON THE COVER: FICPA CEO-Executive Director Deborah L. Curry, CGMA; Gov. Rick Scott; and Florida Board of Accountancy Chair Cynthia Borders-Byrd (left to right) met recently in Gov. Scott’s office at the Florida Capitol.

Cover photo by Mark Wallheiser

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Florida CPA Today is an award-winning, professional publication for more than 18,500 members of the Florida Institute of CPAs. Our magazine: Allows members to share their professional expertise on technical issues Keeps members informed about FICPA events and advocacy Highlights the people and issues that affect Florida CPAs Recognizes the professional accomplishments of our members

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ADVERTISERS’ INDEX: Accounting Practice Sales....................45 ADP.............................................................2 AON.................................................. 28, 47 CGMA .....................................................24 CPS Investment Advisors (CPAlliance™)........................................13 IDEA® - Data Analysis Software .........4 Nova Southeastern University............36 PNC............................................................6 Soreide Law Group...............................20 Space Coast Credit Union...................17 Trugman Valuation Associates, Inc.......14 Connect with your Florida accounting professional targets with magazine display advertising.

Florida CPA Today, the FICPA’s four-color magazine, is distributed bi-monthly to more than 18,500 members.

Frequency discounts are available when you advertise three or more times per year. For more information, contact FICPA Corporate Sales Manager Drew Miller at (800) 342-3197 (in Florida); (850) 224-2727, Ext. 270; or millerd@ficpa.org.

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President’s message

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Making way…

And following dad’s example of advocacy

My dad was a family-practice physician in Bradenton. Back in the early 70’s, he took our family to visit Russia and Germany, then known as the communist countries behind the Iron Curtain. Visiting the region gave us Westerners a rare glimpse of life as it was in the Eastern Bloc, and gave my dad the opportunity to observe the system of socialized medicine first hand. As we toured several hospitals and medical facilities, we couldn’t help but be taken aback by the impersonal, assembly-line process of socialized health care.

As a family practitioner, my dad was old school, in a good way. His patient care focused on quality, individual service and the occasional house call. He was a proud member of the American Medical Association (AMA) and supported the AMA’s tenet that physicians – rather than the government and private interests – should decide the future of medicine. Dad’s medical license meant everything to him. It was his calling, his livelihood.

Thanks to lessons learned from dad, I’m a long-time and passionate supporter of the Florida CPA/PAC and of the FICPA’s lobbying efforts on our behalf. I invest in the PAC because being a CPA is more than just a job, and we are far more than bookkeepers. Our professional duty is to serve the interests of our public, business and government clients. To accomplish this, we must remain ever-vigilant in protecting our licenses, and fight to avoid becoming mired in undue regulation. Renewing your FICPA dues and supporting the Florida CPA/PAC are two effective steps you can take to protect your license.

While we’re on the topic of licensure, one of the provisions in our CPA streamlining legislation allows for licensees from other states, who have maintained active licenses for at least 10 years prior to applying to the Florida Board, to be exempt from submitting their education transcript(s) and documentation verifying the one-year work experience requirement. Read more about it on page 8.

This past year has been the opportunity of a lifetime for me, as well as a period of positive change for the Institute.

Working with FICPA CEO-Executive Director Deborah Curry has been a pleasure. She and I have spent much time traveling together, building friendships with CPAs and demonstrating how the Institute takes a personal interest in our members’ lives and success.

Finishing the year closes another page in the book for me and for the Institute. I won’t miss living out of my suitcase, but I’ll miss the privilege of representing Florida’s accounting profession and serving you. Cliché as it is, it soon will be time for me to move on, making way for new people including Scott Price, the FICPA’s first Board chair, and Ken Strauss, 2012-2013 chair-elect. Between their years of experience and Deborah Curry’s leadership, I’m confident that the Institute is in exceptionally capable hands.

I can’t close without thanking you for your membership; extending kudos to the Board of Governors for its collaboration and bold governance moves; and sending a hug to my Dad for all he taught me in the short time we had together.

Those we love don’t go away, they walk beside us every day. Unseen, unheard, but always near; still loved, still missed and very dear.

This column is dedicated in memory of Kyle R. Thomas Aug. 7, 1991-April 1, 2012.

Stam Stathis, CPA

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DOR update

By Renee Watters, DOR public information officer

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One-stop registration portal to simplify Florida business

Florida is one step closer to a one-stop business registration portal. The 2012 Florida Legislature passed HB 5501 and 5503, which charged the Department of Revenue (DOR), in cooperation with other state and local entities, with establishing and implementing the portal. State and local governments will use it to register, license, qualify and issue permits to Florida businesses.

For several years, individual state agencies have tried to simplify the registration process and eliminate duplication. The Department of Business and Professional Regulation streamlined registration requirements; DOR implemented onestop registration for taxes and fees; and the Department of State created a single-business identifier format that all state agencies can use. All three agencies implemented online registration.

The one-stop portal will provide new businesses with a single place to submit applications, licenses, permits or other authorizations; pay fees; and submit

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documentation. Through a phased approach, new businesses will be able to use the online portal to register with and pay fees to, among others, the departments of Business and Professional Regulation; Economic Opportunity; Financial Services (Workers’ Compensation); Lottery; Revenue; and State.

The goal of the portal is to expand to existing businesses and additional agencies, and link to local government licensing and permitting requirements. The portal is expected to promote a business-friendly environment in Florida, and to foster new business development by expediting start-up times. It also will facilitate understanding of and compliance with state and local registration, permitting and other requirements.

Cooperation and collaboration among state agencies and local governments will

save money for businesses and the State of Florida. The savings will continue through future consolidation of processes such as receiving payments, conducting criminal-background checks and reducing registration redundancies.

The State of Florida has issued an Invitation to Negotiate, soliciting vendors to develop the first phase of the project.

This includes establishing the portal; the single-business identifier; and a system framework with a guided activity path – which DOR will host – to help businesses choose the route that best fits their needs.

This phase also will include establishing a common payment-processing system.

For more information about the one-stop business registration portal, contact Renee Watters, DOR public information officer, at (850) 617-8214, or wattersr@dor.state.fl.u

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Florida wraps up 2012 Session FICPA enjoys legislative success

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By John Johnson, FICPA director of governmental affairs

During the 2012 Legislative Session, the FICPA Governmental Affairs Team strived to ensure that the FICPA’s legislative and regulatory policies were upheld. The FICPA legislative team monitored 211 of the 1,747 general bills that were filed during the 2012 Session. Whether it was uniting with other business groups to push for greater legal reform, or collaborating with the Department of Business and Professional Regulation to ensure the Board of Accountancy (BOA) was properly funded, the FICPA Governmental Affairs team looked out for the accounting profession’s best interests.

House and Senate consider numerous bills Here’s a summary of the bills that were filed and passed during the 2012 Legislative Session.

Senate & House Bills

Filed

Passed Both Chambers

Concurrent Resolutions

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1

Resolutions (one chamber)

106

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General Bills

1747

238*

Accountancy bill passes Florida Legislature

Local Bills

106

42

Joint Resolutions

48

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More than 2,000 bills were filed during the 2012 Florida Legislative Session, and

Memorials

38

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2052

292

Totals

Photo by Mark Wallheiser

Gov. Rick Scott was wearing his custom-made cowboy boots during the FICPA’s recent visit to his office at the Florida Capitol. Scott said he’ll get a new pair soon, and schoolchildren throughout Florida agreed the new boots should feature an alligator.

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about 15 percent of those actually passed both chambers. The Governmental Affairs Team, with the support of our members, worked hard and is excited to share the success of our efforts on your behalf.

Senate Bill 1656 (SB 1656), sponsored

by Sen. Jack Latvala, R-St. Petersburg, and its House companion Bill 769 (HB 769), sponsored by Rep. Clay Ford, R-Gulf Breeze, unanimously passed their respective chambers. Together, the Legislation streamlines licensure and renewal requirements set forth in Chapter 473. One of several significant requirement changes relates to initial licensure and license reactivation.

Here is a summary of five streamlining actions: • Amends 473.308(4), F.S., to allow CPAs to obtain the one-year work experience licensure requirement through verification by another CPA, versus direct supervision of a CPA (current law).

• Streamlines the licensure-byendorsement requirements, as set forth in 473.308(7), F.S., for CPAs who

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*HB 769 & SB 1656

have held a license in another state for at least 10 years prior to application.

• Creates a one-time amnesty to reactivate a license by allowing CPAs to notify the BOA of their intention

by Dec. 31, 2012, and complete 120 hours of CPE by June 30, 2014.

• Amends 473.313(3), F.S., by creating a 75-day window to submit a renewal application, without having to apply for reactivation, for licensees who had completed the required CPE by Dec. 31, but failed to report.

• Provides for a BOA report to the Legislature on the potential cost savings of privatizing or outsourcing some Board functions.

The legislation still has one more stop before it becomes law. It now awaits Gov. Scott’s signature.

Sine Die short lived Gov. Scott calls Special Session As Gov. Rick Scott, House Speaker >>> PAGE 10 Dean Cannon and Senate www.ficpa.org

Overseeing the profession The Florida governor is required to appoint individuals to serve on the Florida Board of Accountancy (BOA). The BOA consists of nine members, seven of whom must be CPAs, and two of whom must be laypersons (consumer members) who are not and have never been CPAs. Once appointed by the governor, BOA members are subject to confirmation by the Senate.

The BOA meets approximately 10 times each year to carry out their statutorily mandated responsibilities to oversee the profession.

With a membership of more than 18,000 CPAs, the FICPA’s mission is to promote the value of its members and serve their diverse needs; enhance members’ competency and professionalism; support professional standards; and advocate on behalf of the profession.

During its 106-year history, the FICPA always has maintained a strong and professional relationship with the BOA. We continue to work together to serve the diverse needs of the accounting profession in Florida.

Gov. Richard L. “Rick” Scott Gov. Rick Scott, Florida’s 45th governor, was sworn into office Jan. 4, 2011. Gov. Scott was born in Bloomington, Ill. and raised in Kansas City, Mo. After graduating from community college, Gov. Scott enlisted in the U.S. Navy, where he served on active duty as a radar man aboard the USS Glover. The G.I. Bill enabled Gov. Scott to earn a degree in business administration from University of Missouri-Kansas City, as well as a law degree from Southern Methodist University.

To read more about Gov. Scott, visit www.flgov.com/ meet-governor-scott/.

Florida Board of Accountancy Chair Cynthia Borders-Byrd was appointed to the BOA in 2008 and Gov. Scott recently reappointed her for a second term. Borders-Byrd was educated in Florida schools and earned an associate in arts degree at Chipola Junior College, a bachelor’s degree in accounting at Florida State University; and a master’s of business administration at Florida Atlantic University.

Borders-Byrd has been a practicing, licensed Florida CPA since 1983. She has worked for the State of Florida, Office of the Auditor General; Broward County, Florida; Arthur Andersen; and Ernst & Young. In 2005, she started C. Borders-Byrd, CPA, LLC. In December 2011, she was elected chair of the BOA. To read more about Cynthia Borders-Byrd, visit her firm’s website at http://cborderscpa.com/.

Deborah L. Curry, CGMA

Photo by Mark Wallheiser

Cynthia Borders-Byrd, CPA

Gov. Rick Scott; Cynthia Borders-Byrd, Florida Board of Accountancy Chair; and Deborah Curry, CGMA, FICPA CEOExecutive Director (left to right) discuss the FICPA’s legislative priorities, BOA oversight and issues affecting the CPA profession.

FICPA CEO-Executive Director Deborah Curry became the FICPA’s fourth CEOExecutive Director in October 2011. She is a CPA in Georgia and Texas, and is in the process of becoming a Florida CPA. Before coming to the FICPA, Curry worked with the Georgia Society of CPAs for six years, serving first as chief financial officer, then as the chief operations officer. A graduate of Texas A&M University, Curry’s previous experience includes finance positions with Turner Broadcasting System, Time Warner and Pacific USA Holdings Corporation.

To read more about Deborah Curry, see the September/October 2011 issue of Florida CPA Today. www.ficpa.org

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The first map won the unanimous support of the House’s Republican caucus.

However, members of the Miami-Dade delegation joined with Democrats to oppose the second Senate plan. They argued that the growth of the Hispanic population in Miami-Dade County justified a fourth Hispanic majority district. But the Senate map created only three protected seats.

The attorney general has 15 days to ask the Florida Supreme Court for a second review of the revised Senate map. The Court has 30 days to approve or reject the new map. If the Court rejects, the Court will have 60 days to draw the map.

State budget includes BOA program funds On March 9, the House and Senate passed the FY 2012-13 Budget. It includes important funding for the BOA. >>>

Photo credit: Florida House of Representatives archives

President Mike Haridopolos gathered on March 9 – the last day of the 2012 Session – for the traditional Sine Die celebration, there also was the sobering news that they must return to the Capitol to redraw proposed Senate district boundaries.

The Florida Supreme Court ruled that the Senate maps failed to adequately comply with Florida’s new voterapproved constitutional amendments.

The amendments were designed to block gerrymandering of legislative and congressional districts, which have to be redrawn every 10 years. The Florida Supreme Court offered a split decision on the Legislature’s redistricting plan, ruling unanimously that the plan for the House seats was constitutional, but that the plan for the Senate lines was not.

Although the Court ruled 7-0 that the House districts were constitutional,

five Supreme Court justices ruled against the proposed Senate map. Two justices – Chief Justice Charles Canady and Justice Ricky Polston – supported the lines the Legislature passed.

After the ruling, House Speaker Dean Cannon, R-Winter Park, praised the House redistricting team. Incoming Speaker Will Weatherford, R-Wesley Chapel led the redistricting process for the House.

The two-week Special Session began March 14 and was scheduled to end March 28. The Legislature ended the session one day ahead of schedule, sending a redrawn map of new Senate districts to the Florida Supreme Court. The new proposal appears to create more visually compact districts, and one less Republican majority seat, than the first map. At press time, the Supreme Court had not yet ruled on the new Senate maps.

Rep. Clay Ford, R-Gulf Breeze, sponsored FICPA legislation in 2012.

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Photo credit: Florida Senate archives

Sen. Jack Latvala, R-St. Petersburg, sponsored FICPA legislation in 2012.

With support from the FICPA, Florida’s 2012-13 budget includes $100,000 to fund the BOA’s Minority Scholarship Program and $60,000 for the Unlicensed Activity Campaign. Both programs are funded by a portion of CPA license fees: • •

Three dollars from each license fee is earmarked for minority scholarships.

Five dollars from each license fee is earmarked to combat unlicensed activity.

In 1998, FICPA-supported legislation created the Minority Scholarship Program.

Since then, the BOA has approved $981,000 in scholarhips for 188 students who were enrolled in their fifth year of an accounting-education program. www.ficpa.org

appoint a successor to that position.

2012 Session fallout Gov. Scott reviewed each of the 415 Senate snubs hundreds appointments the Senate did not take up. of governor’s appointees The Florida Senate snubbed hundreds of Gov. Rick Scott’s appointments to state agencies and local governing boards when members adjourned the 2012 Session without confirming the appointees. Those who were not confirmed included not only the heads of several state agencies, but also five BOA members who either were appointed to their first term or reappointed to a second term.

According to s. 114.05 (1)(e), F.S., if the Senate takes no action on an appointment during the regular legislative session, the governor has 45 days from the end of session to either make a reappointment or

He reappointed the five BOA members, who now must be confirmed by the Senate during the next legislative session.

To see a complete list of appointments the Senate did not confirm during the 2012 Legislative Session, visit the Florida Senate’s website at http://flsenate.gov/Session/ ExecutiveAppointments/.

For more information about the 2012 Legislative Session, contact John Johnson, FICPA director of governmental affairs, at (800) 342-3197, Ext. 203 (in Florida); (850) 224-2727, Ext. 203; or govaffairs@ ficpa.org.

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CPAs play vital role in IRS examinations

By Manuel E. Pravia, CPA

You receive an envelope with the Internal Revenue Service’s return address. Inside is a letter that says, “Your federal return for the period(s) shown above has been selected for examination.”

It’s a moment that many dread, but few experience. For Fiscal Year 20111, the IRS selected about 1 percent of all individual

all business returns are examined, entities with assets of more than $10 million (which fall under the jurisdiction of the IRS’s Large Business & International Division) have almost a 1 in 5 chance of being selected for examination.

Although each IRS audit is unique, there are some commonalities in managing

returns for examination (whether field or correspondence). But the odds increase to almost 4 percent for returns reporting income of $200,000 and higher. For individual returns reporting income of more than $1 million, the examination coverage has more than doubled during the past four years: from 5.57 percent in 2008 to 12.48 percent in 2011.

The statistics regarding business returns are similar. Although “only” 0.63 percent of

the examination process, regardless of the taxpayer or the type of issue that may come up. Taxpayers often call on CPAs to help navigate this potentially treacherous process.

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For correspondence exams, keep it simple Many individuals’ only contact with the IRS will be through the mail. Notices

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advising of math errors on tax returns, or of mismatches with information (such as the 1099 series), aren’t really “examinations.”

However, they require the same timely response as a notice to provide information supporting a claimed deduction. Some practitioners have power of attorney (Form 2848) on file for key clients, so they also receive IRS correspondence and can proactively advise clients about how to proceed.

Responses should be organized and logical.

The best outline to follow is the information document request (IDR). The response to each item should be specific, and should concisely provide only the requested information.

Never provide original documents – only copies.

The initial request usually pertains to supporting items on the tax return. So, as Joe Friday would say, “Just the facts, ma’am.”

When transmitting the requested documentation, include a cover letter as an index. This will show the examiner that all items on the notice were addressed.

Sending the response with tracking (such as certified mail or return receipt) will prove the taxpayer’s timely response.

If all items are properly documented and the response is complete, the next IRS communication may indicate the exam is closed and no adjustment was made.

However, if there are items that are not supported, or if the IRS’ interpretation of the law and regulations leads to a different result, the taxpayer will receive followup written communication. As with the initial correspondence, responses should be written, complete and timely, and should address the specific issue. >>> www.ficpa.org

Field exams involve other issues

In some instances, the IRS wants taxpayers to appear at the local IRS campus. In the case of larger businesses, they may want to visit the taxpayer’s location. Although the request/response process is similar to a correspondence exam, there are other things to consider.

An office exam will require taxpayers to take the requested information to the IRS location. Assemble and label the information for quick access. Avoid the temptation to take something along “just in case.” If it is not directly related to the IDR, don’t present it to the examiner. This includes planning memos, analysis of uncertain tax positions and other documents that may provide more than “just the facts, ma’am.”

The IRS usually reserves field exams for cases that may be more time consuming and have broader reach.

Although taxpayers still must assemble the information before the agent’s visit, a field exam could be seen as giving the taxpayer “home field” advantage. On the contrary, it may be a greater inconvenience, and even a disadvantage.

A visiting examiner will take up office space that may be at a premium. The examiner could overhear information that likely is irrelevant to the audit and may lead to additional inquiries. And the examiner may request information or ask questions, expecting a quick answer.

This may leave the taxpayer little or no time to have an experienced practitioner analyze and filter the response.

In either type of exam, it’s preferable that all contact take place with the CPA present. The CPA’s office can also be used as an alternative field location after the examiner’s initial meeting at the taxpayer site. The CPA >>> PAGE 15

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In the know

Practitioners should be aware of items the IRS currently considers issues of importance.

• Foreign/international issues: areas where the risk of non-compliance is high. One of the mandatory IDRs for businesses relates to payments to non-resident aliens and foreign companies that may be subject to U.S. income-tax withholding at the source. Also, the IRS’ recent Offshore Voluntary Disclosure Initiatives have highlighted the importance of compliance with forms such as TDF90-22.1 (Foreign Bank Account Reporting) and new Form 8938 (Statement of Specified Foreign Financial Assets), among others.

• Unreported income: cash receipts that may be kept “off the books,” or side ventures that may be unreported (such as hobbyists selling their wares on EBay). New Form 1099-K attempts to address the latter by requiring payment-settlement entities to report merchantcard payments.

• Small-business expenses: perceived instances of abuse in which small businesses could serve as the owners’ personal pocketbook, paying for expenses that may not have the appropriate businesspurpose substantiation.

• Contractor versus employee classification: although the payment still would be deductible for income-tax purposes, there is the potential for unreported payroll taxes (and potential different treatment for payees). Practitioners should perform an analysis to determine how payors can fully comply – either proactively, through the current IRS amnesty program or, at the time of examination, through the safe harbor of IRC §530.

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FICPA NewsFlash digest To bring FICPA members the most current news and information in today’s fast-paced business environment, the FICPA compiles NewsFlash, a timely assortment of news events happening in the profession. The newsletter is e-mailed every two weeks, typically on Thursday afternoons.

Here are some of the most popular recent FICPA NewsFlash features. To view the full stories and other NewsFlash briefs, visit our archives at www.ficpa.org/members/newsflash.

April 19, 2012 2012 License Renewal Update

The following information contains important details about your upcoming license renewal for the Jan. 1, 2011 through Dec. 31, 2012 cycle, and the CPE requirements for your re-establishment period ending June 30, 2012. **IMPORTANT** Effective with the re-establishment period ending June 30, 2012, CPAs no longer are required to submit a detailed CPE reporting form to renew a current active license (or report that they completed the

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80 hours by July 15). However, as part of the license-renewal process (DBPR will mail by Oct. 1 to all licensees renewing in 2012), you will have to “Check-A-Box” attesting that you completed your CPE based on the following.

April 5, 2012 New Mega Conference Announces Contest Winners Ten Attendees Receive Free Registration!

The FICPA’s most dynamic event of the year – the Mega CPE Conference – will be held June 11-13, 2012 in Orlando and Tampa. On Valentine’s Day, the FICPA launched the “Like” Us Now! Love Us Later!

Contest to give away a free registration to the conference, and the optional ethics course, to 10 lucky people in the city of their choice. The registrations were divided by city and selected at random.

Congratulations to our 10 winners!

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March 22, 2012 2012 Legislative Wrap Up: FICPA Celebrating Passage of Accountancy Bill More than 2,000 bills were filed during the 2012 Florida Legislative Session, and about 15 percent of those passed both Chambers – including Senate Bill 1656 (HB 769), better known as the Accountancy Bill.

The FICPA Governmental Affairs Team, with the support of our members and the Florida CPA/PACs, worked hard and are excited to share the success of our efforts on your behalf. To review a short video by Deborah Curry, and to read the legislative wrap up, enter visit the FIPA’s website.

February 23, 2012 Tech Tip: Microsoft Excel – Add Windows Calculator to the Quick Access Toolbar www.groovypost.com Do you like to perform quick calculations using Windows Calculator while working in Excel? If you want to save time, add Calculator to the Quick Access Toolbar.

Enter the following URL into your web browser and learn how.

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effectively will act as a buffer between the client and examiner, so the examiner’s presence won’t significantly affect the client’s dayto-day business. Also, the CPA won’t possess most of the items the examiner may request. Because of this, he or she can also honestly say, “I don’t have that level of detail in my files, so let me put it together and get back to you.”

IRS seeking electronic records Electronic-information management has become the standard in the private sector, and now is being used to enhance the IRS examination process. According to the IRS, obtaining accounting records in electronic format decreases the number of items included in initial document requests, and in follow-up requests. This increases the efficiency of examiners’ analysis and testing of books and records.

In December 2011, the IRS announced that more than 1,100 agents have been trained on several electronic accounting-software packages (such as QuickBooks and Creative Solutions), and are being encouraged to request and accept information in the software format. Taxpayers and practitioners have significant concerns.

However, the IRS has publicly stated that they have and will exercise the full authority the Internal Revenue Code provides to obtain electronic records.

In most circumstances, providing electronic information makes examinations more efficient and less painful for the IRS, taxpayers and practitioners. Many practitioners provide printouts or Excel/text exports of general ledgers, and IRS examiners generally have accepted those formats in the past. However, because of the new initiative, the IRS now states that those files must be “exact copies of the original books of entry” that allow agents to review and test the integrity of the records. This is because other file formats don’t capture metadata, which provides additional detail about transactions.

Under IRC §7602 (as limited by the constraints set by the Powell Doctrine2), the IRS has the ability to summons records it feels are relevant to determining tax liability. In some circumstances, it may be advisable to have the IRS summons the information before providing it, so as not to appear to have voluntarily disclosed the information.

After a summons is issued, the cost to attempt to quash the summons, coupled with the ill will this decidedly antagonistic process may foster, generally is enough to convince many practitioners to provide the requested files. Whether practitioners provide the information on first request or after summons, it’s important that they use appropriate file-management controls, so they provide only relevant information. Practitioners should create files that have only current-year information, to avoid giving the IRS irrelevant data pertaining to non-audit years.

The IRS may concentrate their compliance and examination efforts in different areas for individuals, small businesses and large multinationals. CPAs play a key role in successfully navigating the compliance process, from advance planning through possible defense on examination.

Manuel E. Pravia, CPA, is a director in the Tax and Accounting Department of Morrison, Brown, Argiz & Farra, LLC in Miami. He regularly presents at CPE seminars and is an adjunct professor at the Florida International University School of Accounting. Pravia also serves on the FICPA Federal Taxation Committee.

Endnotes IRS Fiscal Year 2011 Enforcement and Service Results, http://www.irs.gov/pub/newsroom/fy_2011_ enforcement_results_table.pdf 2 IRS Fiscal Year 2011 Enforcement and Service Results, http://www.irs.gov/pub/newsroom/fy_2011_ enforcement_results_table.pdf 3 United States v. Powell, 379 U.S. 48 (1964).

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Join us for the Florida CPA/PAC Inaugural Golf Tournament, being held in conjunction with the FICPA Mega Conferences in Orlando and Tampa. Take part in this great opportunity to raise support for the PAC’s advocacy efforts and have a fun day of golf.

June 11

Tampa & Orlando SCHEDULE OF EVENTS 7-8 a.m.

8 a.m.

Noon-1 p.m.

1-1:30 p.m.

Registration/Warm Up Shotgun Start (Team Scramble Format) Players Finish Lunch/Awards Presentation

Entry Fee: Early Bird: (Team - thru May 28)............................... $450 Individual: ....................................................................$125 General Team: ............................................................ $500 Each entry includes: • 18 holes of golf • Golf cart • Free range balls • One ticket to awards luncheon • Continental breakfast and buffet lunch • Players’ packet giveaways

For registration information, sponsorship opportunities and special Early Bird discounts, visit www.ficpa.org/PACgolf or contact Justin Thames at (800) 342-3197 (Florida only), or (850) 224-2727, Ext. 204, or thamesj@ficpa.org.

Entrance fees to the Florida CPA/PAC Golf Tournament are considered contributions to the Florida CPA/PAC CCE. Contributions will be used for political purposes, support state candidates and political parties. Making a contribution is not a condition of membership in the association and a member may refuse to make a contribution without any reprisal. Contributions to Florida CPA/PAC are not deductible for federal tax purposes. pd.pol.adv.by Florida CPA/PAC

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Auditor’s report to undergo major changes

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By Dr. Terry J. Engle, CPA and Dr. Will Quilliam, CPA, CIA

Since 2004, the AICPA’s Auditing Standards Board (ASB) has been working on its Clarity Projecti and the initiative is almost complete.

The project will result in the redrafting of all AU sections of currently effective Statements on Auditing Standards (SASs) found in AICPA Professional Standards. This is the first major redrafting and recodification of U.S. Generally Accepted Auditing Standards (GAAS) since the promulgation of SAS No. 1 in 1972. For a complete comparison of the currently effective AU sections to the new clarified AU-C section, refer to the ASB Clarity Project Extant AU Sections Mapped to Clarity SASs on the AICPA web site at www.aicpa.org.

This article focuses on the prominent changes being made to the form and content of the standard unqualified auditor’s report. These changes are contained in a forthcoming clarified auditing standard, Forming an Opinion and Reporting on Financial Statements (hereafter referred to as the clarified reporting standard). ii The clarified reporting standard is effective for audits of financial statements for periods ended on or after Dec. 15, 2012.

Unqualified report becomes new unmodified report

The clarified reporting standard renames the current “unqualified opinion” as the “unmodified opinion.” Another clarified auditing standard, AU 705-C, Modifications to the Opinion in the Independent Auditor’s Report (effective for audits of financial statements for periods ending on or after Dec. 15, 2012), defines a “modified opinion” as: “A qualified opinion, an adverse opinion, or a disclaimer of opinion.”

Although the format of the auditor’s unqualified report has changed significantly, the underlying message has not. Also, the auditor’s responsibility has not changed.

The clarified reporting standard contains several presumptivelymandatory requirements affecting the appearance and content of the standard unmodified auditor’s report. These presumptivelymandatory requirements are new, and are intended to promote consistency in the use of the auditor’s report.

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For more than 20 years, CPAs have been following the reporting guidance currently contained in AU section 508, Reports on Audited Financial Statements (AICPA, Professional Standards), when preparing the standard unqualified auditor’s report.iii AU section 508 provides an example of a suggested unqualified audit report.

However, the auditing standard does not have unconditional requirements or presumptively-mandatory requirements pertaining to the elements of the standard unqualified report (e.g., a title that includes the word independent, an introductory paragraph, a scope paragraph, etc.).

Auditors have almost universally adopted the form and content of the suggested unqualified auditor’s report contained in AU section 508, but they were not required to under GAAS. This voluntary situation will substantially change with the presumptively-mandatory requirements contained in the clarified standard.

Some of the provisions in the clarified standard introduce a requirement for existing voluntary reporting practices. Other requirements alter the form and content of the commonly used standard unqualified auditor’s report. Examples of the former include presumptively-mandatory requirements that the unmodified auditor’s report should: 1. Be in writing (hard copy or electronic medium).

2. Have a title that includes the word independent (when appropriate).

3. Be appropriately addressed, based on the engagement.

The report typically is addressed to those who engage the auditor. Although auditors have commonly included an addressee in their unqualified reports, AU section 508 was silent on this issue. >>> www.ficpa.org

4. Include a manual or printed signature of the auditor’s firm.

5. Be dated “no earlier than the date on which the auditor has obtained sufficient appropriate audit evidence on which to base the auditor’s opinion on the financial statements….”

Some elements of the auditor’s report will not change.

However, the clarified standard contains numerous presumptivelymandatory requirements that will significantly alter the appearance and content of the unmodified report. These changes to the unmodified auditor’s report include: 1. Introductory paragraph – The introductory paragraph no longer will describe management’s or the auditor’s responsibility regarding the financial statements. The introductory paragraph will identify the client; assert that the financial statements have been audited; present the title of each audited financial statement; and indicate the date or period each financial statement covers.

2. Management responsibility section – The auditor’s report should have a separate section with the heading Management’s Responsibility for the Financial Statements. This section should describe management responsibilities for preparing financial statements, including management’s responsibility for internal controls relevant to preparing fair financial statements in accordance with the applicable financial-reporting framework.

3. Auditor’s responsibility section – The auditor’s report should include a separate section with the heading Auditor’s Responsibility. This section replaces the “scope paragraph” of the existing auditor’s report. This section should: a. State that the auditor is responsible for expressing an opinion on the financial statements. b. State that the audit was conducted in accordance with U.S. GAAS, and those standards require the auditor to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. c. Contain a prescribed high-level description of an audit. d. State whether the auditor believes the audit evidence is sufficient and appropriate to provide a basis for the auditor’s opinion.

1. Opinion section – The auditor’s report should contain a section with the heading Opinion. The wording of the unmodified opinion has not been changed from that of the unqualified opinion, but the auditor’s opinion now is presented in a separate section of the report.

2. Auditor’s address – The auditor’s report should disclose the city and state where the auditor practices. In the clarified standard, the examples of the unmodified auditor’s report place the auditor’s address at the bottom of the report, between the auditor’s signature and the report date.

Exhibit I compares the elements of the unmodified and existing unqualified auditor’s report. >>> PAGE 18 www.ficpa.org

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EXHIBIT I Comparison of the Elements of the New Unmodified and Existing Standard Unqualified Auditor’s Report Audit Report Attribute

New Unmodified Auditor’s Report

Existing Standard Unqualified Auditor’s Report

Report title with the word “Independent” (when the auditor is, in fact, independent) Appropriate addressee

YES (presumptively mandatory)

YES*

YES (presumptively mandatory)

YES*

Introductory paragraph

YES (presumptively mandatory)

YES*

Scope paragraph

NO

YES*

Separate section with the heading “Management’s Responsibility for the Financial Statements”

YES (presumptively mandatory)

NO

Separate section with the heading Auditor’s Responsibility Separate section with the heading Opinion

YES (presumptively mandatory) YES (presumptively mandatory)

NO

Auditor’s signature

YES (presumptively mandatory) YES (presumptively mandatory)

YES*

YES (presumptively mandatory)

YES* Note: Neither AU section 508 nor AU section 530, Dating of the Independent Auditor’s Report, contain a requirement for a report date.

Auditor’s address containing the city and state where the auditor practices Report date

NO (An opinion paragraph typically was included, but there was no heading or separate section.)

NO

*This commonly is included in the auditor’s report, but there is not an unconditional or a presumptively-mandatory requirement under U.S. GAAS. The new clarified auditing standards bring significant changes to the standard auditor’s report. This article focuses on the changes affecting the existing unqualified auditor’s report, but much of the discussion also applies to the types of modified reports (i.e., qualified opinion, adverse opinion, disclaimer of opinion).

Time is of the essence for auditors to familiarize themselves with the new reporting guidance, which becomes effective for audits of financial statements for periods ended on or after Dec. 15, 2012.

This article is intended to contribute to this essential educational process.

Dr. Terry J. Engle is a licensed CPA in Florida and holds the Advisory Council Professorship in the School of Accountancy at the University of South Florida. His teaching and research interest is auditing. He has been an author of several articles that have been published in journals such as The CPA Journal; Auditing: A Journal of Practice & Theory; and Internal Auditor. Dr. Engle is a member of the FICPA, AICPA and IIA.

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Dr. Will Quilliam is a licensed CPA in Florida and an associate professor of accounting at Florida Southern College. He has been an author of several articles that have been published in journals such as Auditing: A Journal of Practice & Theory and Florida CPA Today.

He serves on the FICPA Board of Governors and is a member and past chair of the FICPA Editorial Committee. Dr. Quilliam previously was an auditor with Ernst & Young.

Endnotes

The Clarity Project involves the redrafting and recodification of the current Statements on Auditing Standards to converge them with the International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB). The Clarity Project also seeks to make auditing standards easier to read, apply and understand. A summary of the Clarity Project is in Clarified Auditing Standards: The Quiet Revolution (Journal of Accountancy, June 2011). ii This clarified SAS has been finalized and the entire standard is available for purchase through the Improving the Clarity of Auditing Standards page on the AICPA website at www.aicpa.org. iii Information in this article pertaining to the requirements of AU section 508 came from the AICPA Professional Standards as of June 1, 2011. AU section 508 will be superseded on the effective date of the clarified auditing standards (effective for audits of financial statements for periods ending on or after Dec. 15, 2012). i

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To the rescue

TAS helps unravel taxpayer issues

By Azuree Ashby, CPA

In the wake of recent legislative changes, IRS budget cuts and improvements to IRS technology, there has been a barrage of notices creating headaches for taxpayers – and ultimately for their preparers. Tax professionals already are burdened with what Nina Olson, the National Taxpayer Advocate (NTA), cites in her 2011 Annual Report to Congress1 as 500-600 legislative tax changes per year. Now, they are burdened with an IRS that seems to be grasping at any revenue stream they can find.

The IRS has struggled to keep up with the vast number of legislative changes in the face of substantial budget cuts. New technology has improved certain aspects of compliance enforcement. However, there have been substantial challenges in effectively dealing with taxpayer problems and resolving them efficiently. When is it time to cry uncle and seek the help of the Taxpayer Advocate Service (TAS)?

The TAS also can get involved when a taxpayer or his or her representative believes the IRS has incorrectly applied the law, thereby adversely affecting the taxpayer. Again, the TAS does not replace established appeals processes. There must be a significant hardship, as defined in the Internal Revenue Code, for the TAS to become involved.

When the TAS steps in, they research the issue to ensure the case has merit. If the TAS takes on a case, they attempt to resolve it through lower levels of the IRS. If they don’t

Last year, the NTA issued a directive relating to the IRS taking a hard line on collections from taxpayers who were in untenable financial situations because of the economic downturn (i.e. extended unemployment, foreclosures, etc.). As a result, the IRS developed its Fresh Start Initiative. This initiative makes important changes to IRS lien-filing practices. They include: • Significantly increasing the dollar threshold when liens generally are issued, resulting in fewer tax liens.

resolve the issue, they can elevate the matter to the Commissioner of the IRS, if needed, through a taxpayer-assistance order. The local-taxpayer advocate to the IRS issues the order, which directs the IRS to take or stop a specific action, cease all action, or review an action that already has been taken. This is a very formal process and is done only when the local-taxpayer advocate has thoroughly reviewed the facts and law, and deems it necessary. Taxpayer-assistance orders are not issued upon taxpayer/preparer request.

Similarly, the NTA can issue a taxpayeradvocate directive, ordering the IRS to cease any action they have taken or are contemplating. These usually involve issues affecting multiple taxpayers.

• Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.

• Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.

• Creating easier access to installment agreements for struggling small businesses.

• Expanding a streamlined Offer in Compromise program to cover more taxpayers.

When to contact the TAS Ignoring an IRS notice or inquiry won’t make it go away. In fact, ignoring IRS correspondence often makes it harder to unwind any action the IRS takes. In a recent interview, Belinda Revel-Addis, the local taxpayer advocate for North Florida, said the worst thing a preparer or taxpayer can do is nothing at all.

As a preparer, it’s important to raise client awareness about the urgency of responding to IRS notices. According to Revel-Addis, the TAS’ job is not to replace IRS procedures, nor to function as a shortcut for resolving issues. The TAS is a last resort when taxpayers aren’t getting the cooperation or resolution provided for in the Internal Revenue Code or Regulations.

The TAS often gets involved in cases where taxpayers have been financially affected. This usually has to do with the levy or seizure of property. The TAS was written into law to be involved in and help mitigate “immediate adverse action” situations. These situations include property liens, account levies and home seizures. It’s important to note that, in the case of a home seizure, the TAS cannot get involved after the case is transferred to the Department of Justice. At that point it no longer is in IRS jurisdiction. www.ficpa.org

NTA reports issues to Congress Congress appoints the NTA, who is the only IRS employee who can, by law, make legislative proposals directly to >>> PAGE 20

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Identity theft is hot TAS issue During the last few years, and last year in particular, local Taxpayer Advocate Service (TAS) offices have seen an influx of identitytheft cases. These cases are difficult and time consuming to resolve. As a result, the TAS has committed itself to helping taxpayers fight the tax effects of identity theft.

According to Belinda Revel-Addis, the local-taxpayer advocate for North Florida, and the NTA’s Annual Report to Congress1, many theft cases are attributable to one of these factors: 1) the sale of Social Security numbers; 2) the ease of access to the Death Master File; and 3) Social Security number theft.

Identity theft is discovered when the IRS processes two returns using the same Social Security number; when a return is filed under a deceased person’s Social Security number; or when a taxpayer receives an IRS notice regarding income that he or she did not earn, but that was reported under his or her Social Security number.

When multiple returns are filed, it becomes very difficult to find out who has filed the legitimate return and who has filed the fraudulent return. Local TAS offices have reported an increased incidence of identity thieves who have been brazen enough to solicit TAS offices’ help in an attempt to discredit legitimate taxpayers. In these cases, the TAS can be of great help with establishing the correct taxpayer.

Non-filers becoming prevalent Another hot-button issue is non-filers. Many individuals in tough financial predicaments are not filing income-tax returns because they can’t pay any balance that may be due. This futile attempt to defer tax liability often results in a tax bill plus additional penalties and interest, which the IRS calculates based on information available to them (i.e. W-2s, 1099s, etc.).

The TAS often helps unravel these situations by filing amended returns and seeking abatement of penalties.

FICPA developing related CPE Tax-return identity theft has been a hot topic on several FICPA listservs. The FICPA is monitoring this important issue and is designing pertinent webinar and conference content. For updates, check the FICPA website at www.ficpa.org/cpe.

Endnotes

National Taxpayer Advocate 2011 Annual Report to Congress Executive Summary: Preface and Highlights, http://www.taxpayeradvocate.irs.gov/userfiles/ file/2011ExecSummary.pdf.

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Congress. The current NTA is Nina Olson.

Congress values her recommendations and opinions.

In her Annual Report to Congress, Olson identifies approximately 20 of the most important issues taxpayers face each year.

She is required to make legislative and/ or administrative proposals to mitigate problems the report identifies.

In compiling her list, Olson contacts TAS-office employees, local-taxpayer advocates and tax practitioners. She holds town-hall meetings and forums to learn about problems that she includes in her report to Congress. The AICPA National Tax Conference, held annually in Washington, D.C., includes an IRS Liaison meeting. At this meeting, practitioners can talk directly to the NTA about issues they see in their day-to-day practice. A TAS representative attends the FICPA Federal Taxation Committee’s annual Liaison Meeting with the IRS. Olson’s report also contains the 10 mostlitigated issues of the year. Items that almost always make the list include innocentspouse relief and penalty-abatement issues, as well as these questions: “What is income?” “What is a legitimate business expense?” and “What is reasonable?”

When Olson completes the report, she issues it directly to Congress. No one >>> 20

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www.ficpa.org

at the IRS sees it beforehand. The TAS is independent from the IRS and answers directly to Congress.

TAS provides systemic advocacy forum The NTA is very concerned about “systemic problems,” which are inherent flaws in IRS procedures, computer systems and tax code. To collect information about systemic failures, the TAS provides a website with a forum for submitting items that may be seen as systemic. The forum is called the Systemic Advocacy Management System (SAMS).

Through SAMS, which is monitored daily, taxpayers and practitioners can submit ideas for improving the tax system.

This is a way to recommend changes to policies, procedures and regulations that affect multiple taxpayers. The NTA uses these submissions to help identify projects and systemic issues reported in the Annual Report to Congress, and/or in developing legislative proposals.

To access the submission form, visit the TAS website at www.irs.gov/advocate and click on Report a Systemic Problem. Do not enter any taxpayer-specific information, especially Social Security numbers. The

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TAS will contact you periodically with developments on the issue.

Other items that may be submitted include matters for immediate intervention, or those that affect a large portion of the population and should be acted on right away, such as erroneous tax notices.

Tax code burdens payers and preparers There’s no doubt that the constant changes to the tax code are cumbersome to taxpayers and tax professionals. In her 2011 Annual Report to Congress2, Olson said there had been approximately 4,428 changes to the code during the preceding 10 years.

In 2010, Olson recommended a complete overhaul of the tax code.

In her annual report, Olson sympathizes with the burden on tax preparers and the increasing complexity of compliance.

Through the SAMS Program, the TAS welcomes any input on systemic issues causing practitioners undue burden. The NTA also has regular contact with the AICPA to identify these issues.

and the power to secure resolutions to issues affecting taxpayers. If the TAS requests information, providing it promptly will help resolve issues quickly.

Tax preparers commonly come to the TAS before attempting to resolve an issue directly with the IRS, citing IRS failure to cooperate – when, in fact, that is not the case. The TAS website provides a practitioner toolkit, along with more information and resources for tax professionals.

The TAS’ toll-free number is (877) 777-4778. In Florida, from the Tampa Bay area to the Atlantic and north, the number is (904) 665-0523. From south of Tampa Bay to the Atlantic, the number is (954) 423-7677.

Azuree Ashby is a CPA at Spoor + Associates, PA. She earned a bachelor’s in biology from the University of Miami and a bachelor’s in accounting from the University of South Florida. She also received a master’s in accountancy from the University of South Florida. Ashby serves on the FICPA Young CPAs Committee and the EFP/FIFT Accounting Conference Planning Committees.

Endnotes

Working with the TAS

National Taxpayer Advocate 2011 Annual Report to Congress Executive Summary: Preface and Highlights, http://www.taxpayeradvocate.irs.gov/userfiles/ file/2011ExecSummary.pdf.

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The TAS is in place to help taxpayers (CPA clients). The TAS has the resources

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Simple? Maybe not.

Use caution with requests for third-party communications

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By Steven M. Platau, JD, CPA, ABV

Late on a Friday afternoon, the long-time client calls.

“Can you send a letter to the _______ for me? This request just came up. They need a simple letter from you to complete their files for the transaction. Once you get this letter over to them, the transaction will close… and my business will make payroll today.”

This kind of call makes a CPA wish for the days before telephones.

Whether the request is for something seemingly innocuous, such as a letter confirming that the CPA has been doing tax work for the client for X number of years, or something more challenging, such as “the client’s net worth exceeds $X,” letters to third parties are much more than a simple request. They carry an iceberg’s weight in liability.

Client letter-writing requests come in many forms. The most basic is to confirm the client relationship, or that the CPA has prepared individual income-tax returns for the client. Somewhat more complicated is representing that money to be withdrawn from the business will not negatively impact enterprise equity, or that the entity likely will continue to make distributions of $X for the foreseeable future.

Really challenging is opining that the client is current on all its tax-filing obligations, or verifying that the client properly classifies individuals as employees; that equity is at least $X; or that all client employees are legal immigrants. Equally challenging is a reference letter to a financial institution in another country, despite the fact that it is customary in that country to obtain business references as part of commencing a banking relationship.

The risk in responding to these requests is significant. The requesting party, typically a financial institution, may tell clients these letters are routine. However, 22

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letter requests often are more sinister than customary.

Lawyers advising banks, bearing their employer/client’s security interests in mind, devise credit policies designed to identify and collateralize as much security as they can get. In broadening that security net for the bank, attorneys often devise policies encouraging loan officers to trap CPAs into communicating directly with banks. This is not an exaggeration. These letter requests serve the bank lawyer’s purpose by serving up an additional party with deep pockets to pursue in the event that there is a default.

Without a direct communication from the CPA in the bank’s files, bank lawyers often are frustrated in pursuing the CPA as an additional party to a loan-default recovery case.

Professional standards prohibit some letter responses under any conditions.

Other responses may be permitted only if CPAs undertake certain procedures to comply with professional standards. And other responses, although not prohibited, may expose CPAs to liability from thirdparty recipients.

Adding insult to possible injury, clients almost always consider these letters a routine, no-fee accommodation the CPA should produce to the third party at a moment’s notice. Smart CPAs who manage risk should disabuse clients of the notion that communicating with a third party is an accommodation to be expected.

The best policy is to refuse communication with a third party. The courts are full of cases driven by good intent gone bad, and client retention too often depends on CPAs meeting clients’ needs, if not demands.

The balance of this article is devoted to the risks and standards that may impact a third-party communication.

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Some requests seem easy.

“Please send a letter confirming to the bank that you have been my CPA for the past five years.”

This communication appears to be an easy one with which to comply. The request is factual, the CPA has been doing tax returns for the past five years, and this has been a good client. What possible liability exposure might arise out of sending a simple letter to the bank? The answer lies in a developing body of Florida law.

In 1990, the Florida Supreme Court opened up third-party liability for CPAs in Florida. In First Florida Banks, N.A. v. Max Mitchelli the Florida high court allowed a bank to prevail in an action against a Tampa CPA who had communicated directly with bankers as part of a client’s loan application. Upon the client’s subsequent loan-payment default, the bank sued the CPA, seeking damages for having relied on the CPA’s representations to the bank. After bank losses in the trial and appeals courts, the Florida Supreme Court (in holding for the bank) reasoned that the CPA knew who was using the CPA’s work; knew the specific purpose for which the bank was using the work (granting a loan); and had communicated directly with the bank.

This groundbreaking case changed the landscape for CPAs, opening the door for banks and other third parties to press cases against them. Before1990, non-clients were not likely plaintiffs in actions against Florida CPAs. In the 20 succeeding years, third-party users increasingly have found Florida’s courts to be friendly forums for recoveries against CPAs. The link between third-party users (typically funding sources such as >>> www.ficpa.org

banks, factors, insurance companies and investors) is known as establishing privity with the CPA. The CPA does not want this link. Sending any kind of letter to a third party, even a letter that merely recites facts, opens the door to the third party establishing privity. Once that occurs, the CPA’s potential exposure to loss expands if that third party suffers a loss in dealings with the client.

An exploration of why the bank needs this letter is in order. The bank probably has copies of the client’s tax returns that include the CPA’s name (if not signature), so the bank knows the CPA has been undertaking work for the client. If the bank cared to look, its own records likely include negotiated checks from the client to the CPA in payment for services.

In any event, the bank almost certainly has obtained authorization from the client to request copies of the client’s tax returns as filed with the IRS. What possible reason could the bank have for needing this “brief letter” from the CPA? There is only one logical conclusion: the bank needs this letter as the link to gain privity with the CPA, in case the bank later needs another party to sue if the client defaults.

The bank’s legal department likely orchestrated this request to establish an additional defendant in the event of a bank loss on the loan relationship.

The upside to sending this letter is a happy client. The downside is the risk of establishing privity with the lender through thirdparty communication. The

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downside of electing not to respond is an unhappy client and/or the end of the client relationship.

Risk always is a consideration in deciding how to respond to these requests. CPAs must weigh the risk of client loss against the risk of litigation exposure in relation to a client’s failed relationship with a third party. Some CPAs are willing to take the litigation risk. Others are more litigationrisk averse and elect not to respond.

However, litigation risk is not the only risk CPAs face when deciding how to address letter requests.

Professional-standards breach is another risk for CPAs to consider in responding to letter requests. Professional standards governing all Florida CPAs require that: “A member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities.”ii A CPA should

consider if it is possible to maintain freedom from bias when he or she knows a third party effectively has been granted the opportunity to pursue him or her in a lawsuit if the client defaults. Some might suggest that sending such an innocent letter could be tied to a loss of objectivity – and, perhaps worse, also may indicate the practitioner’s subordination of judgment.

It only makes sense that attestation of any kind requires an attestation engagement. Providing assurance to a third party about anything (even if the transmittal purports not to provide any assurance) requires that the CPA comply with Statements on Standards for Attestation Engagements. Few clients will be excited to hear that a letter to the bank confirming that a tax return containing a Schedule C will require compliance with the attestation standards. However, such a representation (read: assurance), and virtually any other statement about the client, likely will require >>> PAGE 24

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compliance with the standards. The North Carolina State Board of Accountancy twice has published cautions for North Carolina licensees about the necessity of complying with the standards.

A letter confirming that the CPA has prepared tax returns for the client seems like the most simple of requests. In all likelihood, the CPA probably prepared the returns and either sent them to the client for filing or, at the client’s direction, electronically transmitted the returns to the IRS close to the time that the client authorized the filing. Interestingly, the bank portrays the request for a letter from the CPA as a mere formality, but the reality is much more sinister. It is rare today for a bank to have failed to secure customer authorization to obtain copies of returns – and sometimes, transcripts – directly from the IRS. They already know what has been reported. What the banker really wants is another defendant in the event the loan goes bad. And the person with a target on his or her back is the CPA. Although confirming client relationships/ duration and/or return preparation seems easy, it is not. CPAs should explain to their

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clients that the bank is doing nothing more than seeking an additional defendant, and that the CPA would be accepting additional exposure by sending such a letter.

A CPA might ask the client, “Does an engagement to prepare your tax return include exposure to bank-loan recovery efforts if you don’t perform on the loan?”

Watch the client’s reaction very carefully.

It may be very telling as to his or her character, possibly leading to a clientretention decision.

Others are more difficult…

A banker requests a letter from a CPA, stating that the down payment a business is making will not negatively impact the business. This request actually asks the CPA to express an opinion on client solvency.

Professional standards prohibit CPAs from opining on solvency in any form of engagement.iii Accordingly, it would be unwise for a CPA to issue a letter providing any sort of assurance about a client’s ability to pay bills as they come due.

Similarly, a letter from the CPA (even with some kind of qualifying language) suggesting that the client will continue to

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make distributions, or will remain current on its obligations, can be construed as a comment on client solvencyiv.

In either case, the CPA would be providing assurance to the third party, and would need to address the attestation-engagement requirements.

Clients requesting what they perceive as a simple accommodation may not accept a requirement for a separate engagement to respond to a third-party request. However, under the professional standards, providing assurance of any sort to a third party would fall within the scope of the attestation standards.v Letters asking for assurances about a client’s financial stability put the CPA in a position of being asked to do something the professional standards prohibit.

Although in some respects these more difficult letters may be easier to address, CPAs still cannot issue them.

Or most difficult.

Of special concern are requests for recommendation or introduction letters from U.S. clients preparing to do business in foreign countries. These letters are intended to have U.S. accounting firms endorse the integrity of their U.S. clients.

Such arrangements may be common and/or customary in other countries. However, the freedom from bias required in all services rendered by U.S. CPAs does not permit CPAs to advocate for U.S. clients abroad.

When asked to recommend a U.S. client who does or plans to do business internationally, CPAs should consider a simple statement that U.S. standards do not permit references, and that the CPA firm has performed services and/or completed work for the client. Confirming the existence of a client relationship for a non-U.S. third party has not posed documented risks for U.S. CPA firms in the past.

During the past year, CPAs have received more unusual requests. The single most critical step a CPA must take, well before composing a letter or anything else that may be delivered to a third party, is this: always be sure to have written permission to divulge the existence of a client relationship.

A client’s customer contacts the client, requesting that the client’s CPA send the customer a letter confirming that the client’s employees are properly classified in the U.S. The client thinks this is an easy request because the CPA completed an audit of the client’s books. The CPA >>> www.ficpa.org

misses the point that this request requires a legal opinion, and probably would be considered the unlicensed practice of law.

Providing assurance about a client’s net worth in the form of a simple letter is not wise. Professional standards identify several variations of assurance that can be provided in connection with personal financial statements.vi Should the client be inclined to retain the CPA to undertake a personal financial-statement engagement, presenting those statements contains a computation of net worth for the client, thereby providing the same information in a structured, more traditional form. In the “quick-call” situation, the client requests a simple letter, yet the CPA is required to offer a structured engagement for personal-financial statements. A quick letter to anyone regarding net worth is outside the purview of professional standards, and CPAs should be extremely careful in their responses.

Assurance about the client’s tax or employment-classification treatment of employees and independent contractors is not appropriate for a simple letter to a third party. It would, however, be possible for the CPA to undertake an agreed-upon

procedures engagement related to employee classification. The CPA also can perform tax research about a client’s tax position.

Although the tax-research letter would be addressed to the client, the agreed-upon procedures report could, at the client’s sole discretion, be made available for third-party use.

Either situation would require substantially more work than a simple letter. In situations where the client is unwilling to engage the CPA to complete work in compliance with professional standards, sending a “simple letter” presents risks of running afoul of professional standards and regulatory statutes, and should be avoided.

Third-party communication requests are increasingly common, and come with varying levels of complexity and risk. CPAs should avoid the many third-party requests that, in compliance with professional standards, cannot be honored without additional procedures. All third-party communication requests carry the risk of establishing a precedent for third-party action, and CPAs should avoid them whenever possible.

In almost every situation, educating clients in advance about these requests, the costs of compliance and the risks to CPAs may go a long way in diffusing last-minute call requests.

Steven M. Platau, JD, CPA, ABV, has been a member of the faculty at the University of Tampa since 1984, where he teaches taxation and accounting courses. For more than 20 years, his research and consulting focus has been professional liability of CPAs. Endnotes FIRST FLORIDA BANK, N.A., ETC., Petitioner, v. MAX MITCHELL & COMPANY, ET AL., Respondents, 558 So. 2d 9; 1990. ii AICPA Professional Standards ET Section 55, Article IV. iii AICPA Professional Standards AT Section 9101 Attest Engagements: Interpretations of Section 101 paragraph 23. iv AICPA Professional Standards AT Section 9101 Attest Engagements: Interpretations of Section 101 paragraph 25. v AICPA Professional Standards AT Section 101 Attest Engagements paragraph .01. vi AICPA Professional Standards AR Sections 80 and 90 and Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 274-1035-1. i

Meeting your clients’ needs along with your own professional needs is a true balancing act.

Join today.

It’s free. It’s easy.

It just makes sense.

Visit www.ficpa.org/sections, or call (800) 342-3197 (in Florida) or (850) 224-2727, or e-mail sections@ficpa.org.

www.ficpa.org

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Understanding FUPMIFA

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New law affects NFPs

By Jeff Goolsby, CPA, Mike Gossman, CPA, CFE and Felix J. Bobe, CPA

On June 17, 2011, Florida became the 48th state to enact a version of the Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA). The Florida Uniform Prudent Management of Institutional Funds Act (FUPMIFA)1 is the first regulation covering investment securities held by a Florida 501(c)3 not-forprofit organization (NFP). FUPMIFA also provides guidelines to govern the use of donor-established endowment funds.

Florida CPAs who work with NFP organizations should familiarize themselves with the provisions of the new law.

FUPMIFA will require NFP governing boards (the board) to revise investment and spending policies. The law will further change the application of generally accepted accounting principles (GAAP) related to donor-established endowment funds.

ENDOWMENTS

NEW INVESTMENT REQUIREMENTS An institutional fund represents any investment security an NFP holds. The new law provides specific guidelines for the prudent management of all institutional funds. All investment decisions must be made a) considering the organization’s charitable mission and donor intent; and b) with the care a prudent person in a similar position would exercise under the circumstances.

FUPMIFA requires that these factors be considered when investing institutional funds: • General economic conditions.

• Possible effect of inflation or deflation.

• Expected tax consequences, if any, of decisions or strategies.

• Role of each investment or course of action within the overall investment portfolio.

• Expected return from income and appreciation of investments.

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• The NFP’s other resources.

• Needs of the NFP and the fund to make distributions and to preserve capital.

• An asset’s special relationship or special value, if any, to the NFP’s charitable purposes.

NFPs may pool two or more institutional funds for investment and management purposes. Investments are required to be diversified, unless the board reasonably determines the purposes of the funds are better served without diversification.

Individuals who are selected, based on their special skills or expertise, to manage investment funds have a duty under the law to exercise those skills. The same due care applies to external agents selected to perform this function. This includes the NFP’s responsibility to monitor external agents’ performance.

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A gift agreement constitutes any agreement, including solicitations by NFPs, that establishes an institutional fund. An endowment fund is created when a donor, in a gift agreement, requires that all or part of the gift be retained for perpetuity, or for a specified period of time. An

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endowment fund also is created when the gift agreement stipulates that only residuals of the principal be spent (e.g., income, interest, dividends, rents or profits).

Establishing endowment funds can be an important fundraising tool to attract donors who wish to have their donation benefit the NFP for multiple years. For example, an NFP would generate $25,000 annually from a $500,000 permanent endowment fund (at an average earnings rate of 5 percent). Thus, the endowment earnings are the equivalent of generating at least $25,000 each year through fundraising activities.

Endowment funds can be structured in a variety of ways and permit a great deal of flexibility to meet the interest of the NFP and the donor. Common examples of donor restrictions in endowment funds may include, but are not limited to: • Only the earnings on the endowment fund may be spent, and only as limited to a specific cause (e.g., cancer research).

• Requirement that principal and earnings be maintained >>>

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until the fund reaches a prescribed dollar amount (e.g., a construction fund).

• Permits the use of principal and earnings to fund a specified annual dollar amount (e.g., scholarships).

Donors may provide donations pursuant to a gift agreement between the NFP and the donor. When advising NFPs on structuring gift agreements, including endowment funds, it is important to consider the nature of the NFP and potential donors’ motivations to give to the NFP. NFPs consist of voluntary health and welfare organizations2 (charities) and health care organizations3 and fundraising goals may vary greatly. Charities generally are created to address specific causes that may be more personal to benefactors.

Potential donors to charities may be more concerned that their donations be used to cover support expenses (i.e., general and administrative, fund raising and/or membership). Hence, restrictions on the use of proceeds or earnings from endowed funds for a specific cause may have greater appeal to potential donors.

Health care organizations may have more interest in using donations to supplement operations, and to cover charity care. Donors to a health care organization may be more likely to permit the NFP to have discretion in the use of the principal and earnings.

NEW ENDOWMENT SPENDING REQUIREMENTS Subject to the gift agreement, FUPMIFA permits an NFP to appropriate for expenditure,4 or accumulate so much of the principal as the board determines is prudent, for the uses, benefits, purposes and duration for which the endowment fund is established. Until appropriated for expenditure, any portion of the endowment fund that is not considered permanently restricted net assets will be classified as temporarily restricted net assets. FUPMIFA requires that these factors be considered when establishing a spending policy and appropriating endowments for expenditures: • General economic conditions.

• Possible effect of inflation or deflation.

• The duration and preservation of the endowment fund.

• The purposes of the institution and the endowment fund.

• Expected return from income and appreciation of investments.

• The NFP’s other resources.

• The NFP’s investment policy. www.ficpa.org

UPMIFA provides guidance, flexibility The Uniform Law Commission (www.uniformlaws.org) introduced the Uniform Prudent Management of Institutional Funds Act (UPMIFA) in 2006 as a replacement of the Uniform Management of Institutional Funds Act of 1972 (UMIFA).

Before the enactment of UMIFA, charitable organizations generally relied on existing trust law to guide their investment and spending decisions for charitable funds. However, charitable organization board members found the conservative guidelines of trust law to be contrary to modern portfolio management. The enactment of UMIFA provided charitable organizations with guidance on managing and investing their funds, as well as prudent spending of the funds’ net appreciation.

UPMIFA builds on UMIFA by providing charitable organizations with more direction and flexibility in managing, investing and expending their funds. UPMIFA provides a guideline for states to follow when enacting legislation.

ABILITY TO MODIFY ENDOWMENT FUNDS FUPMIFA provides greater flexibility to NFPs with respect to endowment funds.

The board may modify or release from restriction all or a portion of endowment funds for the NFP’s charitable purposes. A modification is permitted when the board determines that an endowment fund has become a) impracticable; b) wasteful; or c) impairs the management, investment or uses of the fund. A modification also may be permitted if the board determines the modification will further the endowment fund’s purpose.

The simplest method is to have the donor consent in writing to the release or modification of all or part of the endowment fund. When donor consent cannot be obtained (e.g., because of death, disability or inability to identify the donor), the other methods are based on a dollar threshold.

The following outlines these methods: • The board has the unilateral authority to release or modify endowment funds less than $100,000.

• The board has the authority to release or modify endowment funds between $100,000 and $250,000, with written notice to the Attorney General, provided the endowment fund is older than 20 years.

• The local circuit court, a) upon application by the NFP and b) written notice to the Attorney General, has the authority to release the restrictions on an endowment fund.

CHANGE IN APPLICATION OF ACCOUNTING The introduction of UPMIFA model act raised significant questions about the

reporting of donor-restricted endowment funds. As a result, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) FAS 117-1, Endowments of Not-for-Profit Organizations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act, and Enhanced Disclosures for All Endowment Funds.

FSP FAS 117-1 subsequently was codified within FASB Accounting Standards Codification 958-205. Florida NFP organizations will be required to change the application of GAAP as a result of the enactment of the FUPMIFA. Effective July 1, 2012, any portion of an endowment, including investment income, which is not classified as permanently restricted net assets, is to be classified as temporarily restricted net assets until it is appropriated for expenditure. Expenditures can be appropriated through several means, such as approval of the formal annual budget. However, they remain subject to satisfying any other purpose or time restrictions imposed by the donor.

If an NFP board interprets FUPMIFA to require that the purchasing power of the corpus be maintained for perpetuity, the corpus will be adjusted based on an inflationary index, such as the Consumer Price Index. Under this interpretation, the amount classified as permanently restricted net assets also would change.

If amounts previously were recognized as unrestricted net assets, and the board did not appropriate them for expenditure, such amounts will require reclassification as temporarily restricted net assets until the board appropriates them for expenditure.

The reclassified amounts would be subject to the originally imposed donor stipulations. Hence, it is important for governing boards to formally address past endowment activity5. Otherwise, not only would there be a reduction in >>> PAGE 29

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unrestricted net assets, but the nonprofit would have to spend new resources to satisfy previously imposed donor restrictions.

This change will impact the reporting period covering the fiscal year end that includes FUPMIFA’s effective date of July 1, 2012 (e.g., Dec. 31, 2012 for a calendar year-end organization).

Reclassifications required as a result of implementing FUPMIFA will be presented in the statement of activities, outside any performance indicator or other intermediate measure of operations (if one is presented), in the year of change.

DISCLOSURE REQUIREMENTS All NFPs with endowments or quasi endowment (i.e., board-established endowment) funds are required to disclose the following: • The board’s interpretation of applicable law.

• NFPs’ policy for appropriation for expenditure (i.e., spending policy).

• NFPs’ investment policies, including a) return objectives and risk parameters; b) discussion of how objectives match spending policy; and c) strategies employed to achieve objectives.

• A composition and roll forward of endowments and quasi endowments by net asset class.

NEXT STEPS Although some Florida NFPs have already adopted UPMIFA’s provisions, many have not. FUPMIFA retains approximately 97 percent6 of the original UPMIFA model act. Thus, it is important that NFP management and boards familiarize themselves with the final provisions of FUPMIFA. NFPs may need to revise written policies and modify practices to comply with the new law.

NFPs should consider the following for all institutional funds: • Hold training for members of the board, management, trustees and investment managers on the provisions of FUPMIFA. • Adopt a board resolution for the passage of FUPMIFA, including the board’s and counsel’s interpretation of applicable law.

• Update written investment policies and procedures to include FUPMIFA’s prudence standards.

• Update written investment policies regarding expectations of performance, asset allocations and portfolio monitoring. www.ficpa.org

• Update written gift-acceptance policies, gift agreements and pledge agreements.

NFPs should consider the following for all endowment funds: • Identify the investments held for each endowment fund in accordance with the asset-allocation policy.

• Update written spending policies to include spending calculations. This should include the spending policy for “underwater” endowments (i.e., fair value of endowment fund is less than the required principal to be maintained).

• Calculate the amount of accumulated earnings, if any, subject to be reclassified on endowment funds.

• Request that the board evaluate and actively address expenditure appropriations on endowment funds.

• Discuss all proposed changes and calculations with your auditors before the start of the audit.

EFFECTIVE DATE FUPMIFA will apply to institutional funds in existence on July 1, 2012, or created thereafter. There are two allowable

exclusions from FUPMIFA’s spending requirements. The first involves written gift agreements where the donor has specifically excluded FUPMIFA’s provisions. The second involves earmarks of unrestricted net assets created by the NFP board, known as quasi endowments.

Shareholder Jeff Goolsby, CPA of Clearwater, and Miami Lakes Managers Mike Gossman, CPA, CFE and Felix J. Bobe (“Bobe”), CPA are members of the audit practice of Moore Stephens Lovelace, PA. Goolsby is a member of the FICPA Healthcare Industry Committee and has served more than 40 not-for-profit organizations. Gossman and Bobe each have more than 11 years of public accounting notfor-profit experience.

Endnotes The Act was introduced in House Bill 599 and codified in Florida Statues under 617.2104 2 Primary source of revenue consists of voluntary contributions from the general public.

3 Primary source of revenue is from providing health services for a fee.

4 Is deemed to have incurred when approved by the governing body (e.g. approval of formal annual budget) 5 As an example, the Board can adopt a resolution approving the use of both the corpus and the related investment income in prior years.

6 The provisions and dollar thresholds for modifying an endowment funds under FUPMIFA are larger and more formalized than the provisions contained in the original model act.

1

Accounting for endowments before FUPMIFA An endowment is created when a donor stipulation requires that a gift to be invested in perpetuity (permanently restricted net assets), or for a specified term (temporarily restricted net assets). The corpus is the amount of principal that has to be maintained (i.e., unspent). The donor may add restrictions for the use of the corpus and/or the income generated from investment of the corpus.

Accounting standards require that donor restrictions (and applicable law) for an endowment be evaluated separately for a) the corpus; b) investment income (i.e., interest and dividends); and c) gains and losses.

The donor generally prescribes any stipulations on investment income at the time of the gift. It is less common for donors to specify the treatment of gains and losses. Generally, in the absence of explicit donor restriction (and applicable law), investment income and gains and losses are classified as unrestricted net assets.

There are special rules for losses related to a) limits on the amount to be recognized as temporarily restricted net assets; and b) losses that reduce the fair value of investment below the required corpus.

When a donor has specified the investment securities to be held, gains and losses on these securities are treated as temporarily restricted net assets or permanently restricted net assets consistent with the restriction on the corpus, unless otherwise specified by the donor.

A quasi endowment is an earmark of unrestricted net assets created by the governing board of a not-for-profit organization. All activity of quasi endowments is classified as unrestricted net assets (i.e., only donors create net asset restrictions).

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News briefs

From FICPA staff reports

South Florida Business Journal honors FICPA member-firms For a record-breaking sixth time, Kaufman, Rossin & Co. recently was awarded first place among large companies (150 or more employees) in the South Florida Business Journal’s annual Best Places to Work competition. The firm is the only South Florida company to achieve this six-time distinction in the history of the awards program.

The Journal also recognized Goldstein Schechter Koch as a finalist in the medium company (51-149 employees) category.

The Best Places to Work Committee selected Kaufman, Rossin & Co. as its 2012 winner from more than 100 nominees, based on anonymous opinion surveys of the firm’s employees. The survey asked questions in 10 categories, including team effectiveness; alignment with goals; trust in co-workers and senior management; manager effectiveness; and people practices.

“This recognition is a testament to the kind of office environment we envisioned for our firm 50 years ago,” said Jim Kaufman, founder and managing partner of Kaufman, Rossin & Co. “Providing a flexible and innovative workplace for our employees helps ensure that our clients get exceptional service, which translates to success for our business.”

Kaufman, Rossin & Co. staff members celebrate their six-time win in the South Florida Business Journal’s Best Places to Work competition.

Gulf Coast Chapter awards scholarships

Gulf Coast Chapter officers celebrate with scholarship awardees. Pictured left to right: Candy Kessel, Gulf Coast Chapter immediate past president; David A. Cumberland, Gulf Coast Chapter president-elect; Francina M. Hollaway, Gulf Coast Chapter president; James Newman, scholarship recipient; Dat Vu, scholarship recipient; Leonard A. Belli, Gulf Coast Chapter secretary; Robin K. Knuth, Gulf Coast Chapter treasurer; and John M. Sarris, Gulf Coast CPE Chapter Liaison.

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The FICPA’s Gulf Coast Chapter recently awarded scholarships to eight students at the University of South Florida Sarasota-Manatee (USFSM).

The scholarship recipients were Miranda Barber; Kimberly Kern; Colleen Laurie; Joseph McCourt; James Newman; Marcia Saulo; Jacqueline Taxdal; and Dat Vu. The FICPA congratulates these USFSM students.

www.ficpa.org

FICPA member Ricky Polston named Florida chief justice-elect The Florida Supreme Court recently unanimously elected an FICPA member, Justice Ricky Polston, to become Florida’s 55th Chief Justice. Polston will succeed Chief Justice Charles T. Canady and will serve a two-year term beginning July 1, 2012.

“I am deeply honored by my colleagues’ vote,” Polston said. “And I commit myself to be a faithful steward of this public trust, recognizing that I am a servant to the people of Florida, to the constitution, and to the laws of the land.”

Polston served as a judge of the First District Court of Appeal from January 2001 until October 2008, when he joined the Supreme Court. He graduated summa cum laude from Florida State University (FSU) in 1977 and received his law degree with high honors from FSU in 1986. Justice Polston and his wife, Deborah Ehler Polston, have been advocates for children’s causes, especially promoting the adoption of children from the foster-care system.

To read Polston’s biography, visit the Florida Supreme Court’s website at www.floridasupremecourt.org/justices/polston.shtml.

Chief Justice-Elect Ricky Polston Florida Supreme Court

FICPA member receives Elijah Watt Sells Award

Shane Drake, CPA Wiltshire, Whitley, Richardson & English, PA

Shane Drake, CPA of Wiltshire, Whitley, Richardson & English, PA (WWRE) in Fort Myers, recently received the AICPA’s 2010 Elijah Watt Sells Award. The 2010 award was presented to candidates who obtained the 10 highest cumulative scores on all four sections of the computerized Uniform CPA Examination.

As a result of identical cumulative scores, the AICPA recognized 19 CPAs. These candidates completed testing in 2010 and passed each exam section on their first attempt. More than 103,000 candidates sat for the exam in 2010.

Drake graduated from Florida Gulf Coast University with a bachelor of science in accounting and a master of science in accounting and taxation. He has been with WWRE since 2010 and was promoted to senior accountant in January 2012.

Elijah Watt Sells was one of the first U.S. CPAs under the provision of a New York State law enacted in 1896. A leader in advancing professional education, Sells was active in establishing the AICPA and was a founder of New York University’s School of Commerce, Accounts and Finance. The AICPA created the Elijah Watt Sells Award in 1923.

FICPA donates servers to new community center After upgrading its server system, the FICPA recently donated five used servers to the new Renaissance Community Center in Tallahassee. On March 29, FICPA Technical Support Administrator Bob McGuire joined Tallahassee officials and community leaders at a ribbon-cutting ceremony and building dedication for the new center.

“This is an example of what people in business, in conjunction with social-service providers and the faith-based community, can accomplish when they pool their talents and resources and target a human issue,” said Rick Kearney, who facilitated the development of the new center. Kearney also is the founder, president and CEO of Mainline Information Systems.

The Renaissance Community Center will address homelessness in Tallahassee and Leon County, and will act as a catalyst for improvement in Tallahassee’s historic Frenchtown community. Partners seek to reduce the number of people residing in local emergency shelters by providing tools and resources to help the homeless return to independence. The project may become a blueprint that other Florida cities will use to address homelessness. www.ficpa.org

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Student outreach

Florida teams shine at Beta Alpha Psi competition

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By Lisa-Ann Polack, CPA

Toothpaste, $2.89 a tube. With BOGO and $1.50 coupon for two tubes, $1.39 – a savings of $4.39.

Smiles received when delivering to a local charity: priceless!

Beta Alpha Psi (BAP), founded in 1919, is an international organization for financial information students and professionals. The organization’s primary objective is to encourage and recognize scholastic and professional excellence in the business-information field.1 Each year, with sponsorship from Deloitte, BAP hosts a regional Best Practices Competition in which BAP chapters participate. The competition encourages students to develop and execute programs that promote awareness and student involvement in projects exemplifying BAP values.

The competition also teaches BAP members about issues they’ll encounter as they transition from students to professionals.

For the 2012 Best Practices Competition, the categories were Developing Strategies for Dealing with Change; Social Networking; and Out of the Box. Four universities competed in the Developing Strategies for Dealing with Change category. In this category, team members described how they dealt with unexpected change in the university or chapter. Eight universities competed in the Social Networking category. Team members discussed issues such as using technology to share information and reach out to those who can’t attend meetings because of location or disability.

And 11 universities competed in the Out of the Box category, which required teams to provide a unique activity that added value to the chapter, but didn’t conform to standard best-practices themes.

The Southeast Regional Best Practices Competition was held Feb. 24-25 in Raleigh, N.C. Several universities proudly represented Florida, including the University of Central Florida (UCF); the University of Miami (UM); the University of South Florida (USF) St. Petersburg; USF Tampa; and the University of Tampa (UT).

The UT Lambda Beta Chapter and USF St. Petersburg Mu Gamma Chapter competed in the Out of the Box category, but did not place. UM presented, but did not compete. >>>

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UCF’s Epsilon Gamma Chapter won first place in the Southeast Regional Best Practices Competition, Social Networking category.

The team will compete for the national title on Aug. 7 in Baltimore.

Pictured left to right: Dr. Donna Schmitt, BAP advisor; Aaron Blades; Kaitlin Border; Leif Bang; and Victoria Barnett. www.ficpa.org

The USF Tampa Delta Gamma Chapter was advised by Jennifer Cainas, CPA and led by Chapter President Amanda Kerney.

The chapter placed first in Out of the Box and second in Social Networking.

The chapter’s Out of the Box presentation was “Extreme Couponing.” The team’s Extreme Couponing Committee shopped with chapter members weekly, using coupons, store-savings cards and other discounts. At the end of each semester, the chapter donated all purchases to various Tampa charities.2 The Extreme Couponing Committee also holds a monthly class to teach coupon use to the Tampa community.

Delta Gamma Chapter members spent more than 300 hours preparing for the competition.

“The experience was well worth it, from start to finish,” Kerney said. “Our team members forged great friendships that have made the chapter stronger.”

For the first time, two teams from UCF’s Epsilon Gamma Chapter placed in the Best Practices category.3 The chapter

also placed first in the Social Networking category and third in the Out of the Box category. Their Out of the Box presentation involved creating a chapter vice president of marketing position, which is unique not only to the chapter, but to BAP. The student in this position produces music videos that inform students about BAP, and then shows them in UCF classrooms.

“Beta Alpha Psi gives students amazing opportunities to learn about their profession and career,” FICPA educatormember Donna Bobek Schmitt said. “We thank local CPA firms for their continued support and commitment to BAP. We’d love to see a greater presence from industry companies, to expose the students to additional career options.”

Congratulations to the USF Tampa and UCF chapters on their first-place victories!

These students will compete for the national title in Baltimore, Md. in August, against first-place teams from seven other regions.

Brenda Hubbard, FICPA Director of Academic Relations and Student Initiatives,

served as a mock judge, critiquing USF’s presentations before the teams left for Raleigh.

“I was impressed with the originality of the presentations, and with the students’ dedication, passion and commitment,” Hubbard said.

We wish them continued success!

Lisa-Ann Polack, a former BAP member, is a senior tax analyst at Deutsche Post DHL in Plantation. Polack earned her bachelor’s degree in accounting and masters of taxation at Florida Atlantic University.

She obtained her CPA license in 2009 and began her accounting career at KPMG LLP in Fort Lauderdale. Currently, Polack is pursuing her masters in accounting at Florida Atlantic University and serves on the FICPA Accounting Careers Committee.

Endnotes http://www.bap.org/ http://www.usfbap.org/couponing-for-charity/ 3 https://today.ucf.edu/beta-alpha-psi-advances-tonational-spotlight/ 1 2

USF teams from Tampa and St. Petersburg entered the BAP competition, and Tampa’s Delta Gamma Chapter placed first in Out of the Box and second in Social Networking. USF team members were (left to right) Justin Chan and his service dog, Edrick; Rachel Brown; Heisy Kamsler; Amanda Kerney; Dr. Jennifer Cainas, BAP advisor; Christopher Rosales; and Pamela Bennett. www.ficpa.org

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FICPA membership works for you

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During the years I’ve realized many benefits from being an FICPA member, and I’m glad to have the opportunity to share my experiences with you.

The FICPA represents and protects the interests of all CPAs in Florida, and therefore it’s crucial that we all support the organization by being members. While being a member brings many benefits, it’s the personal participation in the many FICPA activities where I believe the greatest value lies.

In my case, it started with attending local Chapter meetings (St. Johns River Chapter), where I’ve made many friends and business acquaintances that have helped me grow both personally and professionally. From there I was fortunate to become the Region 2 Representative and a member of the Board of Governors. Being a regional rep and Board member requires some work, but the many

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friends and business contacts make it very worthwhile.

Participation on the Financial Literacy and Chapter Operations committees has also been extremely rewarding. We’ve worked to improve our chapter’s operations and reach out to the public with much-needed financial literacy training.

I realize the FICPA is a large organization and some of you may not be familiar with the many ways the FICPA can afford you opportunities to grow personally and professionally, as well as contribute to the profession. So let’s take a quick look at the possibilities in the context of the FICPA’s mission. The mission can be summarized into three broad categories: 1. Service to the members.

2. Service to the profession. >>> 3. Service to the public. www.ficpa.org

Since the FICPA is first and foremost a membership organization, supporting its members will always be a top priority.

This is accomplished in many ways and individual members themselves play an important role.

Chapter meetings provide members with the opportunity to learn new things while obtaining CPE credit, meeting new friends and business associates, developing leadership skills and enhancing the

“Just take a small step and see where it leads. I think you’ll be glad you did.” profession’s image through public-service projects. Getting involved in a local Chapter is the easiest, most direct way for CPAs to get involved in their professional association.

Local Chapters (27 across the state) meet most months during the year (most don’t meet in April!) and can be a great way to meet new friends and get involved in the FICPA. I know CPE is readily available online, but interacting with other CPAs is a much more fun way to get CPE. Opportunities for participation also include the many committees and sections (online communities) that focus on the education and professional development of FICPA members. There are 33 committees that address topics from very technical accounting matters to planning for the many special seminars and conferences.

These volunteer committees carry on much of the important work of the FICPA and provide great opportunities for member participation in the FICPA. There are eight online communities (sections) where members can share their knowledge about various areas of expertise.

These online communities provide a venue where questions can be answered and opinions shared. Some of the most active listserves seem to host accounting conversations 24-7.

Also included in the “member support” category are the many CPE offerings produced by the FICPA staff (in conjunction with volunteer committees) such as seminars, conferences, annual shows, in-house courses and webinars. This year the FICPA is introducing the Mega CPE Conference, which is based on the input and evaluations of members. FICPA members receive a substantial discount on FICPA CPE courses, and also have access to CPE Tracker – a free, online tool that www.ficpa.org

automatically tracks FICPA CPE hours.

Members also may use the system to enter CPE credit from other providers.

Protecting our professional license from harmful regulations and from those who seek to gain competitive advantage is a key role of the FICPA. We have dedicated staff members in Tallahassee who work diligently with legislators to insure that our interests receive the appropriate consideration. But once again, the FICPA members in the cities and towns across Florida also play an important role.

We need more members to reach out to their local legislators and make sure the CPA is seen as a key advisor on major financial and accounting issues. Also, contributions to the Florida CPA/PAC helps to ensure we have the funds necessary to support the candidates who will make decisions for the good of CPAs, as well as all of Florida’s citizens.

Ensuring the future of our profession also is part of this objective, and the Educational Foundation has been hugely successful for many years in helping students obtain the education they need to become future CPAs. Contributing to the Ed Foundation is money well spent to insure a steady pipeline of young CPAs to keep our profession strong.

Last, but not least, is the opportunity for public service. Public service is a key attribute of all the great professions and we are no exception. Also, there has never been a time when there was a bigger need for the type of professional, objective financial advice that we are uniquely qualified to give.

While we all are accustomed to providing our clients with our best advice, there are many others in need of our help who could never afford to be our clients.

As professionals, I believe we have a responsibility to share our knowledge and talent with those less fortunate. The FICPA has many programs in place that can facilitate your efforts to reach out to those who are in need of financial knowledge and advice. We will ultimately be judged not by how well we treat those who pay us the most, but by how well we treat those who pay us the least.

I’m just one of many Florida CPAs who volunteer and benefit from being a member of the FICPA. However, there’s plenty of room (and need) for more of our members to become active in some capacity. It doesn’t have to require a lot of time – just take a small step and see where it leads. I think you will be glad you did.

I look forward to seeing you at an FICPA event soon!

Terry L. Seaton is the owner and president of Seaton Financial Advisors, LLC, an independent, fee-only registered investment advisory firm registered in the State of Florida. Seaton is a member of the FICPA, the AICPA and the National Association of Personal Financial Advisors. He is a past president of the FICPA’s St. Johns River Chapter and currently serves on the chapter’s Board of Directors. He also serves on the FICPA Board of Governors and is chair of the FICPA Financial Literacy Committee.

Building better benefits Your FICPA membership offers many benefits. Did you know about these?

• Insurance: Group health; professional liability; office-protection plans; employment-practices liability; Cigna group long-term disability and longterm care; and term life • Retirement: The CPA Pension Alliance offers profit-sharing, defined-benefit and 401(k) plans to FICPA member-firms • Preferred-savings programs: members receive discounts on a variety of products and services What’s brand new?

• Student memberships are free. Additional benefits include discounts on CPA exam-preparation materials, access to scholarship information, access to Career Bank, unlimited knowledge and numerous networking opportunities.

• Firm-administrator membership is free. We provide resources to help you efficiently manage membership, register for CPE and report CPE for your firm.

Thank you for your membership!

We welcome your feedback, questions and comments. Please contact the FICPA Member Services Department at (800) 342-3197 (in Florida); (850) 224-2727; or msc@ficpa.org.

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Meet Paul Brown, CPA

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From FICPA communications staff reports

FICPA staff member Paul Brown recently became chair of the City of Tallahassee Audit Committee. Here’s a little about this 20-year FICPA staff member.

Paul N. Brown, CPA, is the FICPA’s director of technical services. He became a licensed CPA and an FICPA member in 1988, and an FICPA employee four years later.

One of Paul’s main duties is serving as the technical reviewer in Florida for the AICPA Peer Review Program.

Through the program, Paul and his staff administer about 450 reviews in Florida each year and oversee about 125 peer reviewers.

Paul also assists members in the areas of professional ethics and professional standards. As part of his role in the Peer Review Program, he has taught and written FICPA and AICPA continuing-education programs, for which he has received several outstanding discussion leader and author awards. He also has served on the AICPA’s Technical Reviewers Advisory Task Force to the Peer Review Board.

Currently, Paul serves as staff liaison to the FICPA Accounting Principles & Auditing Standards Committee; Peer Review Acceptance Committee; and Accounting & Auditing Section. He also serves as chair of the Audit Committee for the City of Tallahassee. >>>

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Paul Brown, FICPA director of technical services, returns from his first Audit Committee meeting.

In his role as committee chair, Paul presented the Comprehensive Annual Financial Report to Mayor John Marks and the Tallahassee City Commission for approval.

www.ficpa.org

Paul was appointed Audit Committee chair during his first meeting with the committee. In March, he presented the Comprehensive Annual Financial Report to Mayor John Marks and the Tallahassee City Commission for approval.

Before his employment with the FICPA, Paul was an audit manager with regional firm Williams, Cox, Weidner & Cox (now Carr, Riggs & Ingram) in Tallahassee. He holds bachelor’s degrees in accounting and finance from Florida State University.

“I love my position at the FICPA,” Paul said. “The Peer Review Program consists of more than 1,400 firms and I communicate with about 125 reviewers daily, weekly or monthly. That keeps me in touch with what’s going on in the accounting and auditing world, and gives me some insight about what’s going on with Florida CPA firms.

“Providing service to our members is what I enjoy the most about the FICPA. Oh, yeah – and I’d be remiss if I didn’t mention that I couldn’t have worked for the same organization for 19 years if wasn’t for all the great staff at the Institute.”

To bring FICPA members the most current news and information in today’s fast-paced business environment, the FICPA compiles NewsFlash, a timely assortment of news events happening in the profession. The newsletter is e-mailed every two weeks, typically on Thursday afternoons.

Here are some of the most popular recent FICPA NewsFlash features. To view the full stories and other NewsFlash briefs, visit our archives at www.ficpa.org/members/newsflash.

Off the clock •

•

•

• •

•

I was born and raised in Tallahassee. I pursued accounting as a career because I wanted a business degree, and I thought accounting gave me the bestrounded education in that area. I earned my finance degree at the same time.

My wife and I have been married for 21 years. We met in middle school, but didn’t start dating until after our 10-year high school reunion. We were married 17 months later.

Our son and our oldest daughter are twins, and they’re finishing their first year of college. Our youngest daughter is a high-school sophomore.

My son played baseball and football throughout his youth, and I coached baseball and ran youth baseball leagues. Our oldest daughter danced, was a cheerleader and played flag football. Our youngest daughter also danced and now plays golf.

Our dog, Beau, is a black-lab mix. We adopted him from Best Friends Dog Rescue in Cairo, Ga. He’s almost 10 years old.

I’ve always enjoyed sports. I played basketball, baseball and golf in high school, but settled on golf and lettered in golf at FSU. I also enjoy investing in the stock market.

My dad was the role model from whom I learned the most. He had humble beginnings in Calhoun County, Florida, and came through the Great Depression in his early teens. From the time I was born, he had an independent pharmacy in Tallahassee. He had a great heart and provided the absolute best customer service. When he passed away two years ago, at 89, so many people told me how he helped them when they couldn’t pay him.

People always affectionately referred to him as Doc, even though he wasn’t a doctor. My dad also had great business acumen.

www.ficpa.org

Feb. 9, 2012 Section 263: New Tangible Property Regulations (Effective 1/1/2012) Analyzed and Explained – Learn new rules for treatment of amounts

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Educational foundation

Catch some rays with other CPAs

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Foundation holds Key Largo retreat

By Jason Zaborske, FICPA educational foundation development manager, and Brittany Butler, coordinator

The FICPA Educational Foundation will hold its Fourth Annual Family Retreat July 26-29 at the Ocean Reef Club in Key Largo.

The Ocean Reef Retreat isn’t your typical formal CPA conference – it’s a casual (shorts and sun dresses) affair with free CPE, a golf tournament, cocktail parties and a moonlight beach luau dinner. The event is designed to promote the CPA profession and, most importantly, support the Foundation’s efforts to provide scholarships to Florida accounting students.

“As CPAs, we must do whatever it takes to help support the future of our profession by providing scholarships to accounting student in Florida,” said Foundation President-Elect Gary Margolis.

The Ocean Reef Club, a 2,500 acre resort, is one of the most beautiful natural settings in the U.S. The resort offers five-star hotel accommodations and boasts a spa and fitness center, three championship golf courses, and numerous restaurants and bars.

Call (800) 741-7333, or email reservation requests to reservations@oceanreef.com, and mention the FICPA retreat.

Those looking for an offshore adventure may enjoy deep sea and flats fishing, as well as diving and snorkeling.

“Sun and education at the Ocean Reef Club in Key Largo…you couldn’t ask for a better setting to enjoy a wonderful weekend with your family and fellow CPAs,” Margolis said. “Last year, I brought my 17-year-old son and he had a great time.” >>>

Join us for our moonlight beach-luau dinner on Saturday, July 28.

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www.ficpa.org

Retreat attendees may play the Ocean Reef Club’s 6,500-yard, par-71 Dolphin Course.

Previous retreats have drawn more than 350 CPAs and their compensated rooms are available through our sponsorships.

Sponsors will be recognized in all Ocean Reef Retreat promotional families, and raised more than $35,000 for the Foundation. This year’s retreat includes a reception for incoming FICPA Board Chair materials distributed to FICPA members throughout Florida.

The retreat has sold out every year and space is limited. Call Scott Price; a pre-luau discussion on the 2013 economic outlook (800) 741-7333, or email reservation requests to reservations@

by Jim Glassman, JPMorgan Chase Managing Partner and Senior oceanreef.com, and mention the FICPA retreat.

Economist; a moonlight beach-luau dinner with keynote speaker Gary Margolis; and an address by Guillermo Castillo, PresidentFor more information, or to see photos of previous retreats, visit www.

South Florida Market, JPMorgan Chase. ficpaoceanreefretreat.org. For more information about the Ocean The retreat also will include a golf tournament on July 27 at the Reef Club, visit www.oceanreef.com. For more information about the Ocean Reef Club’s prestigious Dolphin Course. The cost is $150 retreat or sponsorships, contact George Gulisano at (786) 376-3187, per player and includes a lunch buffet. Sponsorships are available or gulisanog@bellsouth.net; or Development Manager Jason Zaborske and include complimentary passes for the tournament. at (850) 251-7274, or zaborskej@ficpa.org.

The Dolphin Course features fairways winding past tamarind, coconut palms, mahogany trees and other exotic landscaping.

We look forward to seeing you in Key Largo!

Glittering water hazards delight the eye and call for accuracy. With generous fairways, this 6,500-yard, par-71 course allows much more margin for error off the tee. The real test takes place when players reach the greens.

Please join us on July 12 for our preretreat kickoff event, hosted by Sabadell United Bank. The event will take place from 5:30 to 8 p.m. at 1111 Brickell Ave., In compliance with Article III of the FICPA Bylaws, be it 30th Floor, in Miami. Come and meet retreat attendees and sponsors and bid on known that the Annual Meeting of the Members and Board of silent-auction items. Last year, this event Governors will be held at 8:30 a.m., on June 29, 2012 at the drew more than 75 attendees.

The Foundation is committed to Ocean Edge Resort & Golf Club, Brewster, Massachusetts. making the retreat affordable. Rooms are available at $145 per night, and

FICPA OFFICIAL NOTICE

www.ficpa.org

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FICPA applauds outstanding CPE discussion leaders

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From FICPA CPE staff reports

Knowledge, and the ability to present it clearly and concisely, are the trademarks of excellent teachers. The same holds true for those who develop and present CPE seminars. Course material often is technical and requires a keen ability to communicate difficult concepts verbally and in writing.

Continuing a tradition of recognizing excellence among the presenters of FICPA CPE seminars, the Institute congratulates those who received evaluation scores of 4.5 (or higher) out of 5 for knowledge, and 4.0 (or higher) out of 5 for their presentation skills. Course participants evaluate the presenters, and the FICPA tabulates those scores after the CPE year is completed.

Here are the highest scorers for 2011.

DISCUSSION LEADER OF THE YEAR Joseph C. Moffa Moffa, Gainor & Sutton, PA, Fort Lauderdale

2011 Outstanding Discussion Leaders William Blend Moore Stephens Lovelace, PA, Winter Park

Bonnie L. Mackey Levin, Silvey, Zelko & Mackey, PA, Hollywood

Ilona J. Borish Warren Averett, LLC, Pensacola

Steven S. Oscher Oscher Consulting, PA, Tampa

Gary A. Fracassi Fracassi & Associates, Orlando

Cecil “Pat� Patterson Jr. Patterson CPA Group Inc., Ponte Vedra Beach

J. Edward Grossman Lakeland

Ralph J. Poe Lutz

Marshall D. Gunn Jr. Gunn & Company, CPA, PA, Jacksonville

Thomas F. Reilly Holland & Reilly, CPAs, Orlando

Michael S. Kridel Daszkal Bolton LLP, Boca Raton

Michael Rosenberg Packman, Neuwahl & Rosenberg, PA, Coral Gables Martin L. Scheckner Scheckner & Hetenyi, PL, Palmetto Bay F. Larry Shrewsbury Larry Shrewsbury, CPA, Land O Lakes Marc A. Spiewak Marc A. Spiewak, CPA, PA, Davie F. Gordon Spoor Spoor & Associates, PA, St. Petersburg Kenneth J. Strauss Berkowitz Dick Pollack & Brant CPAs & Consultants, LLP, Fort Lauderdale Jeffrey Taraboulos Kabat, Schertzer, De La Torre, Taraboulos & Company, Miami

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www.ficpa.org

CPAs see better times on the horizon

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Caution remains over hiring From AICPA reports

Optimism about the U.S. economy has risen to a post-recession high among CPA executives. Yet most still harbor concerns about hiring, regulatory requirements and the political environment, according to the AICPA’s First Quarter 2012 Economic Outlook Survey.

The AICPA polled almost 1,400 CFOs, CEOs, controllers and other CPA executives in business and industry. The survey provides CPAs’ evaluation of corporate prospects, tangible performance data and first-hand knowledge of company staffing, spending and financing plans. The survey was conducted between Feb. 13 and March 1, 2012.

Positive outlook spans top economic indicators CPA executives’ widespread optimism extends to all components of the CPA Outlook Index (CPAOI). The CPAOI, which is a comprehensive gauge of executive sentiment within the survey, is a composite of nine equally weighted survey components. Elements range from U.S. economic optimism and expansion plans to revenue and capital spending.

This quarter, the CPAOI rose five points to a post-recession high of 69 (the same level as one year ago). On a scale of 0 to 100, a reading of 50 is considered neutral; above 50 indicates a generally positive outlook; and below 50 signifies a generally negative outlook.

The rise in the CPAOI primarily was fueled by a 21-point jump in respondents’ optimism about the U.S. economy. Increased optimism on prospects for survey takers’ own businesses (seven points); revenue (six points); expansion plans (four points); and training and development (four points) also contributed to the quarter’s improved reading, though to a far lesser degree.

“Optimists now outnumber pessimists on the U.S. economy by an almost 2-to-1 margin, which is a striking change from six months ago,” said Carol Scott, AICPA vice president for business, industry and government. “Also, although a substantial number of respondents remain neutral, we’re seeing a clear shift toward a more positive outlook for the coming year.”

Optimism making a strong comeback CPA decision-makers are increasingly optimistic about the U.S. economy and about their own organizations. Forty-three >>> PAGE 43 www.ficpa.org

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New members The Florida Institute of Certified Public Accountants welcomed 124 new members in February and March 2012.

Brevard County Indialantic: Justin S. Knox

Gold Coast Hialeah: Enrique Masson North Miami Beach: Liat Topaz Pembroke Pines: Tomas A. Birriel

Broward County Davie: Paul C. Raikes Fort Lauderdale: Khambrel Campbell, Bonnie K. Sherman Hollywood: Lois E. Dunn, Samuel D. Florio Lighthouse Point: June Liptay Weston: Gianfranco Rusca

Gulf Coast Hialeah: Alyssa Enriquez Hollywood: Shaila Mohammad Lakewood Ranch: Nicole E. Jovanovski Lynn Haven: Jayachandran G. Nair

Central Florida Clermont: Shelby S. Brown Maitland: Elizabeth A. Hildebrand Minneola: Glariluz Gomez Ocala: Cynthia M. Desguin Orlando: Sarah O. Bezugly, Elina Brown, Derrell Raymond Hunter, Darrell RaMone Hunter, Lynn Iacopelli, Lynnelle McCall, Scott M. Seidl, Matt West Oviedo: Steven M. Phillips Sanford: Christopher Strojie Winter Park: Katherine Acosta, Doreen G. Gokhool Winter Springs: John C. McBride

Jacksonville Jacksonville: Louis M. Joos, Joseph G. Seay, Patricia J. Tracey Ponte Vedra Beach: Wesley R. Cook Miami-Dade Hiaeah: Luis M. Barrios Miami: Vivian M. Gant, Yasmany Gonzalez, W. Dennis Huber Sunny Isles Beach: Vedat Kalkuz Miami-Downtown Coral Gables: Kathryn M. Gargula Miami: Francisco E. Giron, Monica D. Herrera, Zunner E. Soliz Miami Beach: Nebojsa Zlatic Pembroke Pines: Elizabeth Figueroa

Emerald Coast Crestview: Makiko Simmons Destin: Konstantin Shterev Fort Walton Beach: Ryan C. Dubois, Roxana Stupar, Luke Tatum Holt: Alexander O. Cortes

North Central Florida Micanopy: Nina W. Tarnuzzer North Suncoast New Port Richey: Linda L. Jacobsen Palm Beach Boca Raton: William R. Gates, Christopher Nogoy Holtsville: Jason M. Morley Palm Beach Gardens: Kimberly J. Ousdahl Royal Palm Beach: Jason Stanckiewitz Polk County Winter Haven: Timothy D. Schaal, Patrick J. Sheil Sailfish Chattanooga: Lydia D. Burroughs Jupiter: Sharon L. Roma Sandspur Lithia: Peter Barnes Riverview: Hannah R. Lantner South Dade Miami: Nikhil Bassi, Guy-Frederic Blanchard, Raymond Grobelny

Miracle Strip Panama City: Sherry D. Hansen

Official Notice of the Florida Institute of Certified Public Accountants Educational Foundation Annual Meeting In compliance with Article II, Section 4 of the Bylaws of the Florida Institute of Certified Public Accountants Educational Foundation, be it known that the Annual Meeting will be held Monday, June 11, 2012, in Orlando at the offices of CliftonLarsonAllen, LLP, located at the CNL Center II, 420 South Orange Avenue, Suite 500, Orlando, FL immediately following the Foundation’s Board of Trustees’ Meeting.

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Southwest Florida Bonita Springs: Diane Conrad Bradenton: Laura M. Peaslee Cape Coral: Marnie J. Keller, Chelsea Seebauer Fort Myers: Julie E. Brazill, Ryan Fulford, Kristen Slosser, Sara Torocco, Jennifer Wehrs Lehigh Acres: Laura Linchenat, Yesenia Mena Naples: Darcey L. Olscamp, David R. Williams St. Johns River Keystone Heights: Marilyn M. Disbrow St. Augustine: Bret T. Stone Suncoast Clearwater: Eric A. Kauk St. Petersburg: Chad Mello, William G. Redden Tallahassee Quincy: Adam Hooker West Coast Steinhatchee: Leon L. Hicks Tampa: Kathryn L. Blakemore, Jonathan L. Bobbitt, Bettina M. Dumar, Frank Edell, Jon M. Guffey, Robbie L. Harvey, Jessica E. Levine, Oon S. Ung, Merri-Ellen R. Wadsworth West Florida Gulf Breeze: Danielle McMullen Jay: Jessica L. Posey Navarre: Sarah Rouseau Pace: Elizabeth A. Hewey, Yinan Song Pensacola: Carrie Boynton, Julia Chesser, Chris Ducksworth, Daniella Gonzalez, Daniel Haines, James Hamric, Jiye Im, Abraham J. Makil, Justin Plombon, Hudson Sauls, Stephanie Taylor, Chia-Ying Tsai, Jose Vidal, Kaora Yukl Out of State Ankeny, Iowa: Sue Rybolt Bronx, N.Y.: William E. Seiter New York, N.Y.: Kenneth P. Ferreyro Portland, Ore.: Henry P. Zewald Spanish Fort, Ala.: Dennis L. Edmondson St. Petersburg, Fla.: Ajay K. Amandra www.ficpa.org

(CONTINUED FROM PAGE 41)

percent of survey participants are “optimistic” or “very optimistic” about the U.S. economy – more than twice as many as the previous quarter’s 19 percent. When evaluating the prospects for their own organizations, 55 percent are “optimistic” or “very optimistic,” representing another double-digit jump over the previous quarter’s 45 percent.

“This is the second strong survey result in a row,” said Jim Morrison, chief financial officer of Teknor Apex Co. “We still have a long way to go to feel really good about the economy, but all the arrows are pointing up.”

Optimism levels are, however, slightly lower than they were one year ago. In 2011, 48 percent of CPA executives were “optimistic” or “very optimistic” about the U.S. economy, and 57 percent felt similarly optimistic about their organizations.

Optimism is on a noticeable upswing throughout most industries. Respondents other than health care providers and those in retail trade are more optimistic about their organizations than they were in the fourth quarter of 2011.

Health care/other (pharma, equipment and service providers) expressed the most optimism, followed by the former top-rated technology sector, then finance and insurance, and manufacturing. Health care providers now are the least optimistic, while real estate and construction showed improvement this quarter.

Hiring forecast improves, but uncertainty lingers Hiring is one area that has been slightly resistant to CPA executives’ growing confidence. Twenty percent of CPAs surveyed said their businesses have too few employees, but they’re hesitant to hire because of continuing uncertainty.

However, this is a measurable five-percent improvement over the previous quarter, and approximately the same as one year ago.

Also encouraging is that 14 percent of CPA decisionmakers have too few employees and are planning to hire immediately, a quarter-to-quarter jump of four percent.

An unchanged 57 percent said they have the appropriate number of employees. The survey also reveals that, although no industry expects to reduce staff, the best prospects for job-hunters lie in technology, health care/other and manufacturing. These businesses expect to do the most hiring, which tracks closely with industry-optimism levels.

Liquidity positions remain fairly stable Organizations’ liquidity positions have remained relatively steady since the previous quarter, with 44 percent of respondents having about the right amount of cash. Of the 34 percent of survey participants who have more cash than they need, 20 percent are reluctant to deploy capital.

Since the previous quarter, slightly more organizations have less cash than they need (22 percent versus19 percent). Those organizations are unable to raise capital because of availability or pricing barriers (13 percent vs.10 percent).

To view complete survey results, visit the AICPA’s website at www.aicpa.org/cpaoutlook.

Copyright ©2012 American Institute of CPAs www.ficpa.org

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Marketplace POSITIONS AVAILABLE

PRACTICES WANTED FOR PURCHASE OR MERGER

Thrive on challenge & can hit the ground running? The Starboard Group, 63 Wendy’s restaurant franchise, has an opening for a CFO in Coral Springs. BS in business field, current Florida CPA license, 10+ yrs exp in restaurant mgmt. $100M+ organization, apply to www.starboardwendys.com.

Long-established CPA firm looking to purchase Miami practice w/ billings of $250,000 to $500,000. Our firm offers a wide range of services, including audit, review, compilation, tax & consulting services. Reply to vs@ogrv.com.

Accounting professionals – position available for seasoned tax professional to take over an established book of business leading to an ownership position; tax manager/CPA. Firm located in N. Orlando, in the Longwood-Altamonte Springs area. Please respond to Cathy Bunke at sunny7for@aol.com w/your resume.

The Pasco County Board of County Commissioners has three positions available: Accounting/fiscal services director – Salary $74,000-$120,301 annually; Closing date: continuous Graduation from an accredited four-year college or university w/a bachelor’s degree in accounting, finance, public or business administration, or related field. A Certified Public Accountant certificate or master’s degree in public or business administration is required. Six yrs of progressively responsible administrative & mgmt exp in a fiscal services or accounting position. Exp in the local government sector preferred.

Budget director – Salary: $74,000-$120,301 annually; closing date: continuous Graduation from an accredited four-year college or university w/a bachelor’s degree in accounting, finance, public or business administration, or related field. A Certified Public Account certificate or master’s degree in public or business administration is required. Six yrs of progressively responsible administrative & mgmt exp in a budgeting or accounting position. Exp in development & administration of operating or capital expense budgets. Exp in the local government sector preferred.

Assistant county administrator – internal services; salary – negotiable; closing date: continuous Graduation from an accredited college or university w/a bachelor’s degree in public or business administration, or related field. A master’s degree in a related field, or current CPA certificate, is required. Ten yrs exp in progressively responsible supervisory positions w/a min of five yrs exp in public administration in an agency of comparable size or responsibility.

Must possess a valid driver’s license.

For all three positions: Must become a Pasco County resident within 12 months after employment date.

ADA/EOE/MF; Apply online at www.pascocountyfl.net.

OFFICE SPACE Beautiful professional offices to share in Fort Lauderdale. Fully furnished. Internet access, phones, copier, fax machine & additional services available. Conference room. Parking. Full kitchen. Kane & Company, PA. (954) 767-0440.

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CPA/PFS, CFP looking to buy out or associate w/retirementminded practitioner in Palm Beach County. I am looking for a practice between $150,000-$400,000 tax & accounting (no audits). Thirty-three yrs exp in public accounting, have securities & insurance licenses. Please email me at joelk@kpco-cpa.com.

RATES AND FEES: Members - $97.86 for 35 word minimum; $2.78 per word over 35 words. Nonmembers $110.31 for 35 word minimum; $3.15 per word over 35 words. Advance payment is required.

Bolding and logos are permissible for an additional fee.

CATEGORIES: Content subject to approval and categories available are: (1) Positions Available, (2) Practices Wanted for Purchase or Merger, (3) Miscellaneous, (4) Office Space, (5) For Sale.

All requests are subject to space availability.

Ads run concurrently on the FICPA website, www.ficpa.org.

SUBMISSION OF ADS: Email ads to communications@ficpa.org.

For more information, contact the FICPA Communications Department at (800) 3423197 (in Florida) or (850) 224-2727, Ext. 385.

FILE NO. REPLIES: If anonymity is desired, responses can be mailed to the FICPA offices using a file number. The responses will be forwarded to the address provided by the advertiser (service fee applies).

For complete classifieds policies, visit www.ficpa.org/Content/CPAResources/ ClassifiedsJobs/Classifieds.aspx.

www.ficpa.org

Experienced Florida CPA w/strong tax background seeks to purchase a well-established quality, transferrable tax/accounting practice; gross $250-325K in St. Petersburg, Tampa, Clearwater or Northern Pinellas county. Would also consider short association leading to partnership in a quality $350-500K practice; reply to schwcpa@verizon.net.

FOR SALE

Successful transitions require experienced, confidential, professional services you can trust. This is what Akins Professional Brokerage provides. Specializing exclusively in the brokerage of CPA firms, we have no upfront fees. List your firm w/a professional. Call David Akins, CPA, at (877) 277-0272. Visit our website at www.ProfessionalCPAbroker.com.

Buy-Sell-Merge-Finance your practice w/ USA’s No. 1 Accounting Brokerage Firm. A Florida-licensed real estate broker w/29 yrs of CPA firm merger-acquisition experience.

Practices available include: South Miami $350,000; Crystal River area $275,000; Broward County area $1,700,000; East of Orlando $1,600,000; St. Pete grossing $200,000+; North Orlando $250,000; JacksonvilleGainesville area $800,000; Ocala $175,000+; Winter Springs area $255,000; Melbourne area $175,000. Many others! Contact Leon Faris, CPA: (800) 729-9031 or Erwin Rosenblatt: (772) 692-8746 at Professional Accounting Sales. Visit our website at www. cpasales.com.

Orlando area (Altamonte Springs) CPA firm w/$500,000 (plus) in revenue. Good mix of audit & tax. Willing to transition w/good staff members available. Respond to altamontecpa@aol.com.

MISCELLANEOUS Experienced Florida CPA w/diversified tax & accounting exp seeks position of tax mgr or sr tax mgr in a quality CPA practice or in private industry in Tampa, St. Petersburg, Clearwater or Northern Pinellas County. Please reply to questionmark27@verizon.net.

www.ficpa.org

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Julie A.

rd

Ba i

On the move TRANSITIONS

Debra C .

Boca Raton: CBIZ and Mayer Hoffman McCann, PC announces the promotion of Michael Pecchia.

Fort Lauderdale: McGladrey & Pullen announces that is has completed the purchase of RSM McGladrey, returning the firm to a traditional partner-owned structure.

Gainesville: James Moore & Co., PL announces that Ryan McIntosh has been promoted to associate accountant and that Michelle Mincey and Jeremy Wright have been hired as senior accountants.

Miami: Berkowitz Dick Pollack & Brant announces that Diana L. Rodriguez has rejoined the firm as an associate director in the tax-services practice.

Miami: Kabat, Schertzer, De La Torre, Taraboulous & Co. announces that Elgin Polo has joined the firm as partner. Also, it has hired Salvatore Catanese as senior manager in the firm’s audit practice.

Miami: Kaufman, Rossin & Co. announces that it has become the first South Florida accounting firm, and one of only 33 nationwide, licensed to offer SysTrust certification.

Orlando: Batts Morrison Wales & Lee announces the addition of a fifth principal, Michael J. Bianchi, to serve as national director of outsourced solutions. Additionally, the firm has expanded its national presence by establishing an Atlanta office and joining the BDO Seidman Alliance.

Orlando: Moore Stephens Lovelace, PA announces that Julie A. Baird has been elected to serves as chair of the firm’s Board of Directors.

Baird is the first female to serve in this capacity.

Sarasota: Kerkering, Barberio & Co. announces that Lindsey Schuster has joined the firm as a tax supervisor.

St. Petersburg: Gregory, Sharer & Stuart announces that Bo S. Brault has been promoted to manager of audit services.

Tallahassee: Coman C. Leonard III and Barbara Sheehan Withers announce the merger of their accounting firms. The new firm is called Leonard & Withers, CPAs, PL. Tampa: J.P. Morgan announces that it has hired Gregory Wilder as an executive director and senior private banker.

Tampa: Moore Stephens Lovelace, PA announces Jeff Goolsby as a new inductee to their ownership group.

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Winter Park: Moore Stephens Lovelace, PA announces five new inductees to their ownership group: DeDe Nichols, Kurt Alter, Bill Blend, Jeff Goolsby and Rob Matschner.

WHO’S NEWS Alice M. Bennett, director of finance for the City of Callaway, Fla., passed all parts of the exam to obtain credentials as a Certified Fraud Examiner (CFE).

Cross, Fernandez & Riley, LLP released the results of their third annual Central Florida Public Charities Survey.

Suzanne Forbes of James Moore & Co., PL in Daytona Beach has been selected as the 2012 chairman of the Daytona Regional Chamber of Commerce.

Linda S. Harding of CPAmerica International in Alachua has been appointed as a member of the IRS Advisory Council and the AICPA Tax Legislation and Policy Committee.

Debra C. Jackson of Jackson & Associates, PA in Largo has been installed as a director of the Central Pinellas Chamber of Commerce.

Kerkering, Barberio & Co. in Sarasota announces that participating employees have donated more than $15,600 to the United Way of Sarasota County.

Markham Norton Mosteller Wright & Company recently held an educational series that generated proceeds of $2,825. The firm donated the proceeds to The Greater Fort Myers Chamber of Commerce Women in Business.

Bob Morrison of Morrison Valuation & Forensic Services, LLC in Orlando was appointed to the Board of Directors of the Institute of International Business Valuators (IIBV).

Leaders from Myers, Brettholtz & Company, PA in Fort Myers recently participated in the United Way’s Volunteer Organization Workshop on volunteer building through business relationships and recruitment.

Daniel Rodriguez of Carr, Riggs & Ingram, LLC in Tallahassee has earned the qualified 401(k) administrator (QKA) certification from the American Society of Pension Professionals and Actuaries (ASPPA).

Stuart Rosenberg of Morrison, Brown, Argiz & Farra, LLC in Miami recently was appointed to the Information Technology (IT) Committee of United Way of Miami-Dade.

o ol For more news about members and other Florida CPAs, visit CPAs in the Spotlight at www.ficpa.org/Content/News/Spotlight.aspx.

The space for Who’s News, Transitions and other announcements published on this page is limited to news focusing on promotions and new hires for FICPA members; speeches by members at professional conferences; and other firm news, such as recognition of business achievements. We do not publish FICPA committee appointments as a part of this feature because of space limitations. Submissions for On the Move can be emailed to communications@ficpa.org.

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Florida Institute of Certified Public Accountants P.O. Box 5437 Tallahassee, FL 32314-5437