The Pathways Commission Report: Charting a New Course for Accounting Education
CPA Firm Strategy Definition of Attest Knowledge for the Future Deliver Value. Respect the Public Interest.速 incpas.org
Indiana CPA Society Group Medical Insurance Program
As a member of the Indiana CPA Society you and your dependents are eligible for medical, dental and vision insurance through the INCPAS Group Medical Insurance Program. The coverage and administration of benefits are provided by Anthem Blue Cross and Blue Shield and managed by Hylant Group â€“ a national, independent employee benefits broker. Business owners who are members can also offer this coverage as a group plan to their employees. Retaining quality employees is a challenge, and excellent benefit packages are often incentives that attract and keep employees. With multiple plans to choose from, and one of the most comprehensive networks offering steep discounts, our competitive coverage can provide solutions to your insurance needs.
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Contents C PA I N P E R S P E C T I V E
S u m m e r 2 0 13 V o l u m e 10 N u m b e r 2
WATCH Learn more about using mobile for business in this interview with professional development educator Brian Tankersley, CPA, CITP youtube.com/incpas
Members 2 Chair’s Perspective 3 Your Trusted Network 4 New Members 6 Day in the Life
The Society 16 Facilitating Access 20 Upholding Integrity 36 CPA Center of Excellence™
READ Learn about Five Talent Trends to Act On incpas.org/digitaledition
The CPA Profession 8 Successful Exam Candidates 10 Enhancing the CPA Designation Through Academics 12 Professional Development Tools & Resources 14 Did You Know?
Features 23 CPA Firm Strategy 24 The Pathways Commission Report 28 Definition of Attest 31 Knowledge for the Future 35 Read it Online
BOARD OF DIRECTORS
CPA IN PERSPECTIVE
O f f ic e r s:
P RE S I D E N T & C E O:
Steven A. Eichenberger, CPA, CGMA, Chair Kent J. Williams, CPA, CGMA, Chair-Elect Steven L. Beardsley, CPA, CVA, Vice Chair Bettie A. Caldwell, CPA, CGMA, Vice Chair Matthew J. Pletcher, CPA, Vice Chair
Gary M. Bolinger, CAE
D i r e cto r s:
Lorita K. Bill, CPA Roger A. Booth, CPA, CGMA Troy J. Gilstorf, CPA Michael E. Johnson, CPA Jenni Lea McNaughton, CPA, J.D. Robert E. Reynolds, CPA, CGMA John D. Sauder, CPA, CGMA Thomas D. Wadelton CPA, CGMA Douglas A. York, CPA, CGMA
EDITOR-IN-CHIEF/ ADVERTISING INFORMATION:
Dave Shatkowski MANAGING EDITOR:
Stephanie Parton, CAE
COMMENT Read and comment on what’s happening behind the scenes at the society: blogs.incpas.org.
P U B L I C AT I O N M O N T H S: January, May, August and November CPA IN Perspective is a publication of the Indiana CPA Society and is published by INCPAS. The Society does not assume responsibility for statements therein, nor does publication of advertisements endorse or authenticate products or service. The editor reserves the right to accept or decline any material based on space availability or appropriateness of content. Reproduction or use of editorial or graphic content without permission is prohibited.
Tony Flack Allison Paul
Indiana C PA S ociet y 8250 Woodfield Crossing Blvd., #100 P.O. Box 40069 Indianapolis, IN 46240
phone: (317) 726-5000
fax: (317) 726-5005
toll free: 1-800-272-2054 email: email@example.com web: incpas.org
P ublic M e mb e r s:
Steven R. Johnson McKenzie Scott Lewis
CONNECT Check out our new, easy-to-search website: incpas.org
© 2013 Indiana CPA Society. All Rights Reserved.
CPA IN Perspective
Keeping Up With the Pace of Change By Steven A. Eichenberger, CPA, CGMA
truly look forward to the next year and the opportunity to serve as chair of the INCPAS Board of Directors. INCPAS is a dynamic organization that truly is the professional home of Indiana CPAs. This is made possible by the passion and hard work of the volunteer leadership of members not only at the board level but throughout the many groups, task forces, councils and committees, as well as the staff. The willingness of so many to provide their time and talent for the benefit of all members is inspiring. As I begin this term, I want to sincerely thank Kevin Kruggel, CPA, CGMA, for his leadership as chair last year. Kevin’s term on the board has spanned the formation of our strategic planning process and development of new ideas including the concepts surrounding knowledge management, beginning with a board task force in 2010 with a “what is this?” challenge to a set of tangible deliverables that are being piloted as I write this column. We are living in a world that has an ever increasing pace of change. When I look back to the start of my career when the fax machine was the latest and greatest, it is astounding that today we work with people all over the world. It is not unusual to collaborate with clients, coworkers, colleagues and others who you may never meet in person. Accordingly, the amount of new knowledge one must acquire to keep pace is constantly moving and growing. To keep up with that change is a challenge for all of us, and that pace of change and need for resources is reflected in the INCPAS’ priorities over the next year.
CPA IN Perspective
At the INCPAS Board of Director level, we are forming three separate task forces to review our current strategic plan. The current plan is a living document and is modified each year for new developments, objectives accomplished and evolving strategies. Our objective in the review of the plan this year is not to rewrite or wordsmith, but rather to challenge what the objectives and priorities are and ensure we as a board have a plan that is agile, emergent and adaptable, and focuses the organization’s resources in the right direction. We will be asking simple questions that require thoughtful answers such as why? for who? and what do hope to achieve? The world around us is changing fast so we want to be sure our strategies are able to move as well. Over the next year you will also be exposed to and have the opportunity to experience the CPA Center of Excellence™ and its resources. The CPA Center of Excellence™ is a direct outgrowth of knowledge management and provides multiple resources with a focus on collaboration and enhancing competency. Collaboration is demonstrated through the CPA Center of Excellence™ Online which was piloted at the INCPAS Leadership Cabinet and Emerging Leaders Alliance meeting in May. Members were able to get an initial glimpse of how this tool can be a part of increasing professional competency and providing a forum for intelligent collaboration. An additional resource included in the CPA Center of Excellence™ is a toolkit for CPAs to use in setting and monitoring strategy and
enhancing competency. Having seen portions of the pilot programs surrounding the implementation of these items, I am excited and encouraged by what will be available to our members over the next year. The next year also will continue with a focus on the INCPAS diversity initiatives. Programs such as INCPAS Scholars and Game On are growing in participants and impact, and the results are showing with 24 members of the scholars program beginning their college careers in the past two years at Indiana schools and majoring in accounting. A last comment on INCPAS’ initiatives and the pace of change … A little over a year ago, members of INCPAS formed the Fusion Network. If you have not had a chance to interact with this group, I encourage you to take a look at their blog, “The Smoke Detector” at fusionnetwork.incpas.net. This group uses blogs, podcasts, tweets and probably things I don’t know exist to provide insight and provoke thought on current events impacting the CPA environment. Given the pace of change in our world, I encourage you to check it out and engage. I look forward to the year ahead and know that it too will go by quickly. The opportunities to make a difference in a world of change are available to you through INCPAS, and your input and feedback are an important part of successful growth of our professional home. firstname.lastname@example.org
Your Trusted Network
Your Trusted Network Appointments Timothy J. Murphy, staff accountant, Katz, Sapper & Miller, LLP, Indianapolis. E. Brady Hansel, CPA, assistant trust officer, First Financial Bank, Terre Haute.
Promotions Donald Breivogel Jr., CPA, CGMA, chief financial officer, Atlas World Group, Evansville.
Member News Mary Ann Merryman, CPA, CFE, of Saint Mary’s College in South Bend recently received the Donald R. and Nora Barry Fischer Faculty Award for Teaching Excellence. Roger L. Stichter, CPA, DBA, Professor of Accounting at Grace College, Winona Lake, completed his doctorate in accounting from Anderson University.
Sean M. Duffy, CPA, director, Crowe Horwath, LLP, Indianapolis. Roger Stichter, CPA, DBA, full professorship, Grace College, Winona Lake.
Paul Wonch, CPA, ABV, CVA, CFFA, of K.B. Parrish & Co., LLP, in Indianapolis was awarded the 2012 State Chapter Presidents’ Leadership Award by the National Association of Certified Valuators and Analysts (NACVA).
Firm News The Indianapolis CPA firm formally known as
Alerding & Co., LLC, announced their new name — Alerding CPA Group. Dunbar, Cook & Shepard, P.C., has been acquired by VonLehman & Company, a CPA and business advisory firm based out of Cincinnati and Northern Kentucky. In Memorium Robert C. Bucheri, CPA, Kokomo, also known as “Chuck,” passed away on May 19, 2013. He was a former INCPAS Board member and a senior partner at Bucheri, McCarty, and Metz, LLP. Larry Dotson, CPA, Muncie, passed away on April 30, 2013. He was an employee of Dotson Professional Corporation. Your Trusted Network announcements should be sent to Tony Flack at email@example.com.
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CPA IN Perspective
12/18/12 11:41 AM SUMMER 2 013
INCPAS welcomes new and returning members from March 1-June 30, 2013.
New Members Affiliate
Adam W. Abner, Ivy Tech Community College
Donna L. Butler, Somerset CPAs, PC Noelle K. Conklin, Craighead, Lange and Hough, P.C. Laura A. Molloy, First Advantage
Zachary R. Conner, CPA, Logan & Graham Accountants, PC
Justin Michael Agresta, Agresta Storms & O’Leary, PC
Jessica E. Runkle, Dauby O’Connor & Zaleski, LLC
Jason J. Crook, CPA, J. Crook CPA Corp
Jordan David Bass
Joshua T. Scott, Federal Direct Tax Servies
Lori D. Daulton, CPA, Hill-Rom Holdings, Inc.
Zach C. Scott, Dauby O’Connor & Zaleski, LLC
Bethany D. Deeds, CPA, Do It Best Corp
William T. Snyder, Dauby O’Connor & Zaleski, LLC
Michael R. Didocha, CPA, Roche Diagnostics Corporation
Brian G. Thompson, Bradley & Associates, Inc.
Dorian A. Dyson, CPA, Midwest USTA
Karen K. Walter, Myers and Stauffer LC
Geoffrey A. Frazier, CPA, Grant Thornton, LLP
John T. Weatherwax, Dauby O’Connor & Zaleski, LLC
Kevin J. Freiburger, CPA, Steel Dynamics, Inc. Kelly K. Gerber, CPA, TydenBrooks
Vania S. Dyson, BKD, LLP
Bryan J. Zabonick, Katz, Sapper & Miller, LLP
Zachary L. Enos, Dauby O’Connor & Zaleski, LLC
Chaleise J. Everly, Svihla & Associates CPAs, LLC
Marcella L. Backer, CPA, Patricia L. Dodson, CPA
Guadalupe Guzman, CPA, Powersource Transportation, Inc.
Andrew W. Fuchs, Dauby O’Connor & Zaleski, LLC
Lucas E. Bapple, CPA, Bapple & Bapple, Inc., CPAs
Roy B. Haas, CPA, Republic Airways Holdings, Inc.
Aaron D. Greiner, Dauby O’Connor & Zaleski, LLC
Cynthia R. Bauer, CPA, Greenwalt CPAs, Inc.
Peter J. Haslett, CPA, Dehmel & Associates, PC
Parker S. Higgins, Dauby O’Connor & Zaleski, LLC
Alyson N. Bohren, CPA, Vera Bradley
Caroline E. Hensley, CPA, ITT Educational Services, Inc.
Tyler C. Kitchen, RJ Pile, LLC
Aaron M. Brannan, CPA, Baden, Gage & Schroeder, LLC
Elly Hernawati, CPA, Wayne Combustion Systems
Gary E. Brinley, CPA, The Peoples State Bank
Lisa K. Hillhouse, CPA, Crowe Horwath LLP
Jeffrey O. Brown, CPA, American Legion National Headquarters
Megan K. Hollingsworth, CPA, Endress & Hauser, Inc.
Sarah L. Brown, CPA, Browning Investments Inc.
Beth A. Huffman, CPA, Foster Results, LLC
Douglas Burdick, CPA, Lincoln Financial Group
Richard Michael Hurst, CPA, Republic Airways Holdings, Inc.
Amber P. Bogan, Dauby O’Connor & Zaleski, LLC
Julie L. Bradford, Dauby O’Connor & Zaleski, LLC Jonathan M. Buczko, Dauby O’Connor & Zaleski, LLC
Rachel D. Buckles, Kemper CPA Group, LLP Ashley L. Hill, Kemper CPA Group, LLP Suzanne M. Lemler, Lemler Group, LLC Debra W. Moore, Olson & Company, P.C. Ellana L. Nelson, Myers and Stauffer LC Gregory Page, Olson & Company, P.C. Sharon K. Routen, Olson & Company, P.C. Roger D. Young, Swiss Village, Inc. Associate Lisa A. Blankman, Sponsel CPA Group, LLC Lauren R. Denton, BKD, LLP Margot S. Eckerle, Deloitte Taylor C. Jenkins, Deloitte Joseph P. Macri, Ernst & Young Timothy J. Murphy, Katz, Sapper & Miller, LLP Patrick C. O’Donnell, Dauby O’Connor & Zaleski, LLC Jill M. Onion, Partners 1st FCU Ian D. Sivak, Dauby O’Connor & Zaleski, LLC
Courtney L. Comer, Kruggel, Lawton & Company, LLC Brittany M. Cuthbertson, Dauby O’Connor & Zaleski, LLC Robert J. Doyle, Dauby O’Connor & Zaleski, LLC
Tyler Kleinschmidt, Alerding CPA Group Samantha A. Laughlin, KB Parrish & Co, LLP Ronald G. Lewis, Dauby O’Connor & Zaleski, LLC Michele C. Mann, Myers and Stauffer LC Cory J. Martin, David Culp & Co. LLP Mitchell Z. McAdams, Katz, Sapper & Miller, LLP Benjamin Moster, Somerset CPAs, PC
CPA IN Perspective
Michael A. Claytor, CPA
Adam M. Peterson
Brittani Wilson, Indiana University
Joseph T. O’Connor, Estep, Doctor & Co., PC
Katherine E. Carlin, CPA, Crowe Horwath LLP Rick Carrier, CPA, BKD, LLP Elizabeth A. Cedoz, CPA, RTI International
Andrew J. Goodman, CPA, Katz, Sapper & Miller, LLP
Robert M. Jennings, CPA, Jennings Seminars Benjamin W. Johnson, CPA, University of Evansville
Karen E. Kaser, CPA, Gatlin CPA Group Darren S. Kay, CPA, Ernst & Young Kelly E. Kershner, CPA, Evansville Water & Sewer Utilities Elizabeth M. Kleehamer, CPA, Betsy Kleehamer, CPA, Inc. Kelly L. Kowatsch, CPA, Harlan Laboratories Michelle L. Lesniak, CPA, ADESA Corporation Brian J. Liffick, CPA, BKD, LLP Mario Lomazzi, CPA, Mario Lomazzi, CPA Eric S. Losekamp, CPA, Hillenbrand, Inc. Daniel D. Marchetti, CPA, Urschel Laboratories, Inc. Richard L. Mayer, CPA, Crowe Horwath LLP Ashley N. Mejean, CPA, Umbaugh John P. Niland, CPA, Indianapolis Public Schools Scott B. Novak, CPA, CliftonLarsonAllen LLP
Robert M. Sauerbrey, CPA, Clondalkin Pharma & Healthcare
Rudeliza D. Noyer, CPA
Geri L. Sciscoe, CPA, Weddle Bros. Construction Company
Jeffrey P. Nywening, CPA, Crowe Horwath LLP
Aaron M. Shenk, CPA, Crowe Horwath LLP
Kathleen S. Ordosh, CPA, Performance Marketing Group, Inc.
Britney Showalter, CPA, Blue & Co., LLC
Katherine L. Palaeologus, CPA, Craighead, Lange and Hough, P.C.
Clinton M. Singleton, CPA, Deloitte Dan P. Skodras, CPA, Bradley Company
Michelle A. Pallme, CPA, London Witte & Company, LLP
Lacey A. St John, CPA, London Witte & Company, LLP
Cole W. Patuzzi, CPA, Kruggel, Lawton & Company, LLC
Diane F. Stahulak, CPA, Crowe Horwath LLP
Terry J. Pipp, CPA, Supreme Industries, Inc.
Elizabeth M. Thoman, CPA, National Association of Mutual Insurance Companies
Dawn Renee Ramsey, CPA, Group Dekko Inc. Stephen A. Reed, CPA, Somerset CPAs, PC Rebecca L. Roberts, CPA, Watermark CPA Group, LLC
Evan William Walsh, CPA, Jurgonski & Fredlake CPAs Raymond C. Wang, CPA, Nissan North America, Inc.
Cassie A. Roby, CPA, Umbaugh
Carey L. Weddle, CPA, Blue Ribbon Transport
Nathan D. Salsbery, CPA, Capin Crouse, LLP
Daryn R. West, CPA, Vowells & Schaaf, LLP
Joseph G. White, CPA, KPMG, LLP
Marketa M. Johnson, Indiana Tech Fort Wayne
Andrew S. Winters, CPA, Winters CPA Group
Thomas M. Kaysen, Purdue University
Danielle R. Wright, CPA, Capin Crouse, LLP
Brooke A. Killion, Ivy Tech Community College Kokomo
Craig A. Young, CPA, 4Sight, LLC
Chelsey M. King, Indiana University Southeast
Emily G. Zimmerman, CPA, Katz, Sapper & Miller, LLP
Ashley L. Kozler, IUPUI
Lucy M. Lunsford, Indiana State University
Brittany N. Bart, Purdue University
Kelsey A. McVeigh, Purdue University
Garrett A. Bucher, Purdue University
Jennifer J. Nifong, Indiana University South Bend
Siyn Chen, Purdue University
Ronald M. Perkins, Ball State University
Dorothy G. Clements, Anderson University John M. Corder, Indiana University Northwest Miranda R. Crawl, Purdue University Jenna M. Cushman, Purdue University Lana L. Franczek, Purdue University Zeyu Geng, Purdue University
Juan J. Ramos, Indiana University South Bend Blake N. Walker, Purdue University Katherine R. Williams, University of Southern Indiana Want your name on the list? Become a member of the Indiana CPA Society. Visit incpas.org/join.
CPA IN Perspective
Day in the Life: Jenny Skehan, CPA
Day in the Life Jenny Skehan, CPA Work History: I worked as a CPA at RJ Pile, LLC for 13 years. There I worked with a lot of small businesses and non-profits, as well as many individuals and larger companies, on tax preparation and planning. Why I became a CPA: I chose to study accounting because I wanted to work in business and I liked the clear path to a job that getting an accounting degree provided. From there, getting the CPA designation seemed a logical next step and would allow me to provide extra value to any business or client I worked with. Coolest thing about being a CPA: The opportunity to get in front of and learn about so many different organizations, either as clients or as a volunteer board member. Current gig: I am the business director at Keep Indianapolis Beautiful (KIB) which includes a myriad of functions. Some are accounting related — financial statement preparation, budgeting, contract negotiation, accounts payable, but some are not — strategic planning, human resources.
9 a.m.: Part of my job responsibility includes managing our building. KIB moved into this building five years ago. The building is Indiana’s first LEED-gold certified building owned by a civic nonprofit. We are located in Fountain Square, one of the city’s neighborhoods with which we regularly work. Owning a building means lots of maintenance needs to be managed. On this day, Warren from S3, our maintenance company, arrived to do a project in our warehouse and our Youth Tree Team space. Our warehouse manager (who also manages our 9,000 volunteer Lilly Day of Service event) had indicated that we needed bollards around our main water valve to protect it from vehicles parked nearby. Warren installed the bollards then moved onto our new Youth Tree Team space. Each summer, we hire 80 high school youth (and a few adult leaders) to water the thousands of trees that we plant. The program has grown over the last five years from three teams to eight teams. Given the growth we decided we needed a dedicated space for the youth to meet at the beginning of each shift, eat meals Scaling the mulch pile is just in a day’s work at Keep Indianapolis Beautiful, where Skehan is the business director. Cylindrical windmills, part of the building’s green certification, are pictured in the background.
CPA IN Perspective
Day in the Life: Jenny Skehan, CPA
and convalesce after a hard dayâ€™s work out in the heat. After securing a tenant for a majority of a third of our building that we were not using, we were able to convert the remaining portion of that space into a fabulous meeting room for the Youth Tree Team. It includes plenty of space for meeting and dining, several work stations, lockers for the kids gear and a ping-pong table. While directing Warren to the warehouse, I noticed that our warehouse trash and recycle bin area was in need of some tidying up. This is the type of task that we all pitch in with occasionally. While out in the warehouse, I was recruited to help unload a truck of donated annuals. The annuals will be distributed to Adopt-A-Block captains. Adopt-A-Block is a program in which residents are recruited to keep their blocks clean and engage their neighbors in clean-up efforts. As a reward for their service, KIB provides flowers, trees and tools to help Adopt-A-Blockers with their work.
9:30 a.m.: From there I had a quick meeting with a representative from the Indiana Department of Natural Resources. KIB was fortunate to receive an Urban Forestry Grant from the IDNR. After a site visit with the program staff in charge of the planting, the IDNR program officer had a couple
of questions about the reimbursement form I had prepared. As part of my work, I also assist our development staff with preparing grants and reporting results. Later in the day, I answered a question about an invoice to IPL related to the Trees for Tomorrow program. I also assisted with the budget for a grant application to the Glick Family Fund for our Youth Tree Team program.
11 a.m.: Next up, I reviewed our meeting agenda for an upcoming board meeting. I report on our current and projected financials at each board and executive committee meeting. In addition, at this board meeting, our treasurer was planning to report on the completion of our audit and our meeting with our audit team. I helped our treasurer prepare for the report by summarizing Keep Indianapolis Beautiful features multiple displays around the building that describe the different ways they acheived LEED gold certification.
our notes from the auditor meeting. After reviewing the board meeting agenda, I spent a few moments discussing staffing our front desk with two of my co-workers. Our front desk is currently staffed by our office manager. However our office manager also serves as executive assistant to our executive director. Relieving our office manager of the front desk staffing responsibility would greatly help her in her job, as well as help her better help others with their technology and office administration needs. We have been exploring the option of turning the front desk staffing into an internship. It is an excellent way for a SPEA non-profit management student to learn the ins and outs of a nonprofit organization. My co-workers agree and we decide to post the position with local universities for the fall.
1p.m.: From there I move on to budget review. On a monthly basis I review actual expenses against budget for the organization as a whole, but also by department or even by project. Some departments request that I attend their monthly meetings and report on budget status. Other departments just request info via email. I am happy to accommodate whatever method works best for program managers. It is critically important that there is constant open communication about our budget. On this particular day, I prepared budget vs. actual information for our IPL Project Greenspace team, which is currently working with 20 different neighborhood organizations or schools to implement Greenspace improvement projects. Examples include improving a bus shelter and the surrounding area in the Devington neighborhood, Continued on Page 34... CPA IN Perspective
Successful Exam Candidates
Successful Exam Candidates :INCPAS Member CORRECTION From the October/November 2012 Window
The following individuals were inadvertently absent from the list published in our spring issue:
Sandra F. Bajamonde
Paul J. Bascom
Mary M. Beard
Gary Bishop Bryan Burns, Dauby O’Connor & Zaleski, LLC
James T. Lucas, CPA
William M. McCullough, CPA, Dixon Hughes Goodman LLP Lauren N. Morris
Rachel M. Hanicq, CPA, ArcelorMittal USA
Jordan R. Tasch, KB Parrish & Co, LLP Emily E. Thieme, Crowe Horwath LLP
Peter Haupers, Blue & Co., LLC
Jack A. Mynatt
Holly E. Hinz
Tyler Vander Schaaf
Carol l. Hooten
Diana N. Ingemanson
Barton W. Jarvis Charlton J. Keultjes, CPA, Crowe Horwath LLP
Jeffrey P. Nywening, CPA, Crowe Horwath LLP
Jessa B. Parallon, CPA, E C Ortiz & Co, LLP
Stephanie A. York
Steven P. Pfefferle
Anna M. LaMonte, CPA, Deloitte
Margaret E. Phillips
Bradley P. Davey
John W. Fireoved, Katz, Sapper & Miller, LLP
Grant M. Lemmons
Audra E. Long Kathryn M. Lucas, Bradley & Associates, Inc.
Andrew S. Winters, CPA, Winters CPA Group
Stephanie L. Goetz, CPA,
Michael E. Steinau
Thomas B. Frank
Patrick W. Richardson, CPA
Christopher B. Young From the January/February 2013 Window
Caitlin E. Bails, London Witte & Company, LLP
Miranda Robbins Nathan J. Romer, CPA, BGBC Partners, LLP
Lindsay E. Schaar
Scott L. Siegel
Amanda N. Bartley, CPA, Slattery & Holman, P.C.
Matthew A. Beck
Derek W. Bitter
John P. Bryan Darrin J. Buffington
Eric S. Burkle Katherine E. Carlin, CPA, Crowe Horwath LLP Lindsey Carlson, Slattery & Holman, P.C.
Luzhan Chen Roger B. Crane, CPA, Indiana University East Brittany M. Cuthbertson, Dauby O’Connor & Zaleski, LLC
Joseph M. Davitt Kyle A. Dillon, BKD, LLP
CPA IN Perspective
Calla M. Dolph
Aaron J. Field
Brian J. Fishback, CPA, Dauby O’Connor & Zaleski, LLC
Kimberly J. Gallagher
Paul D. McCann
Daniel R. McClain
Lindsay A. McKay
Scott E. Midla
Elly Hernawati, Wayne Combustion Systems
Abagail N. Moore
Dylan J. Morris
Abby L. Gornall
David Green Amanda K. Haase, London Witte Group, LLC
Allison C. Hylton, CNO Financial Group
George M. Maxwell Jr. Jordan L. Mayer, CPA, Katz, Sapper & Miller, LLP
Christopher J. Giant, Krouse, Kern & Company, Inc.
Peter W. Neulieb, CPA
Kelly L. Kowatsch, CPA, Harlan Laboratories
Peter T. O’Neill
Kelsey S. Kreke, Brown, Smith & Settle, LLC, CPA
William J. Phillips
Eric S. Losekamp, CPA,
Michael R. Przyborski, CPA, Lincoln Financial Advisors of Indiana
Clay M. Ranard Ryan W. Robertson, CPA, Cox, Beckman, Goss & Company
Teresa J. Thigpen
Melissa D. Thomas
Kevin R. Wall
Scott T. Rutledge, CPA, Timpe CPAs, LLC
Brent M. Wells
James White Emily M. Worrell, BKD, LLP
Douglas L. Schiffli
Those listed above without a symbol are not current INCPAS members. If you know or work with any of these successful exam candidates, contact INCPAS Membership & Volunteer Manager Courtney Kincaid at ckincaid@ incpas.org.
Tad M. Scott, Larry E. Nunn & Associates, CPAs, LLC
Albert T. Ong, BKD, LLP
Thomas L. Street
Jessica E. Runkle, Dauby O’Connor & Zaleski, LLC
Robert M. Sauerbrey, CPA, Clondalkin Pharma & Healthcare
Colin J. Vaal, Blue & Co., LLC
Seth R. Sailors, Katz, Sapper & Miller, LLP
Douglas K. Murphy, BKD, LLP
Michelle R. Johnson
Michael J. Seegel Jr. Victoria L. Snyder, Katz, Sapper & Miller, LLP
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CPA IN Perspective
2/22/13 1:25 PM SUMMER 2 013
Enhancing the CPA Designation Through Academics
Enhancing the CPA designation through
Nathan Fox, CPA, talks with students about the benefits of being a CPA.
First Impressions of Being a CPA Encouraging Indiana students to consider the profession By Ali Paul INCPAS Leadership & Outreach Manager
As a new school year begins, what better time to give back to the profession and encourage students to become CPAs? Take a moment and think about your career and why you love being a CPA. What surprised you about the profession? What excites you about your current position? What are some of the biggest lessons you’ve learned over the years? These are the discussions our career awareness volunteers have with students. These are important discussions to have.
High School Looking to high school students and their preconceived notions about the CPA profession, YOU can help them get a better idea of what CPAs do. Before many high school presentations, we ask students to draw a picture of what they think a CPA does. Most of the pictures feature dark cubicles, giant calculators and funny hats. Rarely
As a CPA, you know that you don’t just have a job. You’re a part of a profession. This is the message that we convey to college students. 10
CPA IN Perspective
will we see a picture of people talking to each other, traveling or any of the things you actually do. This exercise allows high school ambassadors to identify the stereotypes and then work to dispel them. Being a high school ambassador is incredibly rewarding and not all that time consuming. You share what you love to do! For the most part, you’re responsible for scheduling your own presentation(s). This is pretty easy. You can return to your former high school, visit your kid’s school or just look around and choose the closest school to your home or office. We provide email/letter templates and talking points for phone calls to the schools. Once your presentation is scheduled, you report the logistical information to the Society and in return, you will be sent a presentation package with giveaways, talking points and even a PowerPoint. From there, you deliver a spectacular presentation, dazzle the students with incredible stories of your career and then leave them with a burning interest in the CPA profession.
College Once these students graduate and declare accounting as their major, we visit them by way of our campus presentations. For the most part, campus presentations are more about passing along wisdom that generates excitement for the CPA profession. With
Enhancing the CPA Designation Through Academics
many of the presentations hosted by Beta Alpha Psi chapters and accounting clubs, these students are already excited. But they have questions. Oh do they have questions! What part of the CPA Exam should you take first? Do I need to get my masters or is it okay to have all 150 hours in undergrad courses? What happens if you mess up? How can I stand out during an interview? Can I have a job? This is just a small, small sample of the many questions college students have. As a campus presenter, while you’re armed with a PowerPoint that highlights the value of the CPA designation, the CPA Exam and involvement with INCPAS, much of the presentation is spent answering the burning questions of college students. You have the opportunity to share the things you wish you knew when you were in college. You can share some of the common intern and new hire blunders you see. You can tell stories about taking the Exam (in a hot pig barn on a terribly uneven table). You can even talk about showing up to your first day on the job in a leisure suit and platform shoes. Bottom line, you have a platform to showcase the CPA profession and help prepare students for the realities of practice. As a CPA, you know that you don’t just have a job. You’re a part of a profession. This is the message that we convey to college students. So here is your opportunity to give back. Help fill the pipeline by encouraging high school and college students to consider accounting as a major and sit for the CPA Exam. Help develop these students into CPAs. To learn more about the high school ambassador program or campus presentations, contact Ali Paul at firstname.lastname@example.org or (317) 726-5025.
Above: Sherry Davis talks about the travel opportunities she’s had since getting her CPA, while Fox looks on. Right: A sketch from a student participant.
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Professional Development Tools & Resources
Tools & Resources
Tools and resources you need to advance your career beyond your reporting requirements. INCPAS is the source.
Connect, Share Knowledge, Have Fun There are distinct differences between the professional development seminars and conferences provided by INCPAS. Both are great sources for the continuing education you need, and conferences offer vast opportunities in just an eight-hour day.
A&A Conference – September 17
Fulfill your A&A requirements with high-quality information. The expert speakers at Loscalzo Associates, Ltd., are perennial favorites at the INCPAS A&A Conference. This year, Loscalzo’s John Fleming, CPA, MBA, and Greg Clark, CPA, CISA, CFE, will be on hand to report on the latest accounting and auditing information and procedures, and speak from extensive experience.
at INCPAS Conferences Meet the expert:
John Fleming, CPA, MBA, is the president of Loscalzo Associates, Ltd. and has conducted about 2,300 professional development programs. Fleming will lead four sessions at this year’s A&A Conference, starting with a general session update of accounting standards followed by a session that will identify improper revenue recognition techniques through lecture and short case write-ups, and an informative session designed to address recent compilation and review issues. Finally, a session illustrating the guidance in the current AICPA Audit Sampling Guide relating to nonstatistical sampling applications designed to improve audit engagement efficiency.
“The selection of topics for discussion was excellent, and the presenters were experts in these topics. Great conference!” – 2012 Attendee
Notable Upcoming Seminars INCPAS will host two seminars this fall on a critical topic — President Obama’s signature health care bill (i.e., Patient Protection and Affordable Care Act). Better understand the impact of the Act so you can describe to your clients how health care and paying for coverage will change in the future. Walk away with an understanding of the Federal income tax provisions of the Patient Protection & Affordable Care Act of 2010 impacting individuals and businesses. September 27 – Health Care Reform Act 8:30 a.m.-noon/INCPAS Prof. Dev. & Conf. Ctr./4 hrs of CPE Identify the tax provisions from the Health Care Reform Act that will be implemented this year and in future years. Dis-
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cover how to use this information for tax planning opportunities. This course helps you assist your clients in creating informed health care strategies based on new insurance and tax guidelines. October 17 – Obama Health Care Bill and Other Federal Income Tax Update 8:30 a.m.-430 p.m./INCPAS Prof. Dev. & Conf. Ctr./8 hrs of CPE This course will concentrate on the Federal income tax issues of the PPACA and other legislation affecting both individual and businesses. Review the expiring or extended Federal income tax provisions affecting individuals and businesses and newly enacted regulation, court cases, IRS private letter rulings and revenue procedures.
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Did You Know?
Did You Know? Profession News
15% 60% 89% of universities receive more qualified accounting applicants than there is classroom space for
of universities predict increased enrollment in masters accounting and tax programs
of public accounting firms forecast they will hire the same or more grads in the following year
Supply and Demand in the CPA Profession Enrollments and degrees awarded are at all-time highs, displaying a strong interest in the CPA profession as a career choice. Nearly 15% of universities continue to receive more applications from qualified applicants than they can admit as they are constrained by limited spaces in the classroom. Even so, more than 60% of the universities predict increased enrollment in both MBA in accounting and MA in taxation. Hiring by public accounting firms also is at an all-time high, especially at the master’s degree level, signaling the importance of the 150-hour rule for CPA licensure. Furthermore, 89% of public accounting firms also forecast that they will hire the same or more graduates in the following year, a very positive trend into the future.
AICPA Thought Leadership Series The AICPA hosted a panel of leaders in the CPA profession, including INCPAS President & CEO Gary Bolinger, CAE, to discuss issues CPAs and firms will need to face. Two topics that are addressed in the current series are “Valuation vs. Value” and “Templosion.” View the video at aicpa.org.
Source: Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits
Knowledge You Need on Issues That Impact You
How will you respond to the latest trends and changes in the CPA profession? The Professional Issues Update connects you with the latest news and information in the profession. INCPAS President & CEO Gary Bolinger, CAE, leads the popular presentation that quickly and concisely covers thought-provoking topics, developments and trends that could influence how you do business. Register online at incpas.org/PIU READ ONLINE: Learn more about the Professional Issues Update on our blog I Was Just Thinkin’ … at blogs.incpas.org. L-R current INCPAS Chair Steve Eichenberger, CPA, and past INCPAS Chairs Charles Johnson, CPA, Kevin Kruggel, CPA and Dale Gettlefinger, CPA.
Day on the Hill INCPAS and AICPA leaders met recently at the AICPA Council Meeting in Washington, D.C. INCPAS leaders had the opportunity to meet with Indiana Congressmen during the trip. READ ONLINE: Check out INCPAS Senior Vice President Jennifer Briggs, CAE’s, blog post about the Society’s recent trip to Washington at blogs.incpas.org.
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INCPAS Scholars Program to be Honored with National Award The INCPAS Scholars program, a successful program having already been recognized with an award from the Indiana Society of Association Executives, was again honored with a national award — the “Power of A Award” — from the American Society of Association executives. INCPAS’ Ali Paul, the leader of the program, will accept the award on behalf of the Society at ASAE’s annual Summit Awards dinner this fall.
Did You Know? INCPAS News
Has Your INCPAS Membership Expired?
cpa celebration twenty-thirteen
Mardi Gras same party, more feathers
Young Pros Video Series
Goals & Leadership
Save the Date for CPA Celebration Join us November 15 for the 2013 CPA Celebration presented by The National Bank of Indianapolis at the Indiana Roof Ballroom in downtown Indianapolis to recognize successful Exam candidates, award winners and outgoing leadership. This year’s theme is Mardi Gras so masks and beads are encouraged! To register call 1-800-272-2054. Register by October 15 and save $15 per registration.
The Society has a new young pros video series. Episode one features Donna Salter, senior manager of young member initiatives at the AICPA. View the video and hear her thoughts on goals and leadership, and the importance of creating an objective when beginning your career. WATCH ONLINE: Watch the first video in the series at youtube.com/incpas
E-9002-613 IN_E-9002-613 IN 6/13/13 11:24 AM Page 1
The new 2013-14 INCPAS membership period began July 1. If you have not yet returned your dues payment, your membership is expired. It’s not too late to renew and still avoid the $50 reinstatement fee. Simply return your invoice by mail or fax, or contact a member services liaison at (317) 7265000 or toll free at 1-800-272-2054.
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Facilitating Access Advocacy: from the peer review and ethics committees to the government relations advisory council and legislative key persons program, the Society advocates for you and monitors the regulation of the CPA profession in Indiana. ETHICS By William Svihla, CPA, CFE, CGMA, CITP, DBA Svihla & Associates CPAS, LLC
The New Reformatted Code of Conduct The AICPA’s Professional Ethics Executive Committee issued an exposure draft proposing a codification of the AICPA Code of Professional Conduct (the Proposed Code). The exposure draft for the proposed revised code was issued April 15, 2013, with a comment period ending August 15, 2013. The new ethics code is anticipated to be adopted January 2014 with an effective date of December 15, 2014. As part of the codification project, PEEC redrafted all ethics rulings as interpretations and then included the interpretations under the appropriate rule. It now includes links to non authoritative guidance for applying rules placed immediately following an applicable interpretation. Improving our ability to efficiently research issues and arriving at a correct conclusion was one of the PEEC’s primary objectives for pursuing the project. The Proposed Code is now more intuitively organized into topics, subtopics and sections to make it easier to effectively research an ethics issue. The Proposed Code is split into four
Improving our ability to efficiently research issues and arriving at a correct conclusion was one of the PEEC’s primary objectives for pursuing the project. The Proposed Code is now more intuitively organized into topics, subtopics and sections to make it easier to effectively research an ethics issue. sections: the Preface, applicable to all members; Part 1 is applicable to members in public practice; Part 2 applies to members in business; Part 3 applies to all other members. Each section includes the rules, interpretations and links to non authoritative material pertinent to the type of member doing the research. The Preface includes an overview of the Code of Professional Conduct, the structure of the AICPA Code, principles of professional conduct; definitions; and newlyissued, revised and pending interpretations. It also contains links to deleted standards and cross references to the prior Code of Conduct (ET) sections. The Proposed Code includes hyperlinks connecting you
CPA IN Perspective
to definitions, rules, interpretations, deleted content, and new standards, which makes it very easy to navigate through the Code when researching a particular issue. One key advantage of this integration is you no longer have to sort through numerous resources when researching a topic, some which may be irrelevant to your topic of interest. For example, a member in business researching an ethics question would start their research with Part 2. They would bypass any material pertaining to independence for members in public practice and go immediately to the section of the Code applicable to them. All rules and interpretations pertaining to their situation would also be found in one place. Additional changes included in the Proposed Code are the integration of conceptual frameworks for members in public practice and for members in business. They provide a process to follow when guidance in the code is lacking. To apply the conceptual framework, you would first identify any relationships or circumstances threatening your complying with the code. You then assess the significance of the threat from the perspective of a reasonable and informed third party. If you identify a significant but not an excessive level of risk, you then have to identify any safeguards that could mitigate the risk. The safeguards, if implemented, should reduce the threat to a low enough level so as to not threaten your compliance with the code. However, if there are no effective safeguards, or if they are not implemented, the member should decline the service or withdraw from the engagement. If adopted, the two conceptual frameworks will have a later effective date (December 15, 2015) than the Proposed Code in order to allow enough time for firms and members to modify their policies and procedures. Resources: AICPA. Exposure Draft: AICPA Professional Ethics Division, Proposed Revised AICPA Code of Professional Conduct. (April 15, 2013). Available online at www.AICPA.org; AICPA. Ethics Codification (Video). Online. www.aicpa.org/aicpatv; Goria, E. User Friendly AICPA Ethics Code on the horizon. Journal of Accountancy. (April 17, 2013). Online. http://www.journalofaccountancy.com/News/20137808.htm
BOARD OF ACCOUNTANCY
Rhoad Named New IPLA Director, Other Board of Accountancy Changes Governor Mike Pence appointed Nicholas Rhoad to executive director of the Professional Licensing Agency in late May. Rhoad is the former director of business development for the Indiana Manufacturers Association, and brings a background in professional licensing and occupational regulation and government affairs to his new role. Other changes at the Indiana Board of Accountancy: Brian Cusimano left the position of compliance director in June, Randy Holt, public member to the board and INCPAS members Tim Deisher, CPA, PFS, Shelley Johnson, CPA, CGMA, and John Kane, CPA, CGMA, each reached the end of their terms on the board of accountancy. Only Kane is eligible for re-appointment. Each board member may continue to serve until the Governor appoints a new board member.
AROUND THE COUNTRY
INCPAS Helps Pass Legislation Prohibiting Mandatory Audit Firm Rotation in House The House of Representatives’ passage of H.R. 1564, the Audit Integrity and Job Protection Act, on a vote of 321 – 62 was influenced in part by letters to Congressional representatives. In a letter to U.S. Rep. Marlin Stutsman in June, the Society urged the passage of H.R. 1564 on behalf of INCPAS members.The bipartisan legislation would amend the Sarbanes-Oxley Act and limit the PCAOB from requiring a mandatory audit firm rotation requirement for public company auditors and bring the lingering firm rotation debate in the U.S. to a conclusion. Mandatory audit firm rotation could have many unintended consequences and ultimately reduce audit quality. H.R. 1564 has received strong support — nearly 700 comment letters were sent to the PCAOB during the comment process, with 91 percent opposing rotation.
INCPAS Backs Accounting Amendment to Immigration Reform Bill The Society urged U.S. Sen. Joe Donnelly, D-Ind., to support an amendment to SB 744 in a letter in June. The amendment to the bill (the Border, Economic Opportunity, and Immigration Modernization Act) would add accounting to the mathematics definition of Science, Technology, Engineering and Math (STEM). INCPAS supports the amendment because it would include advanced degrees in accounting under the definition of mathematics, so that highly-skilled and highlytrained individuals will qualify for STEM provisions within SB 744. The Society expressed to Sen. Donnelly that CPA firms in Indiana need specialized skills to serve their clients and the public interest, and the ability to move people with these skills across international borders would allow firms to better meet client needs. The demand for CPAs and auditors on a global basis has increased dramatically, and it was emphasized to Sen. Donnelly that they are vital to the well-being of the capital markets and the U.S. economy.
IRS Disclosure Authorization and Electronic Account Resolution Retired on August 11 The Disclosure Authorization and Electronic Account Resolution was retired due largely to low usage of the e-services, according to the IRS. Once the two applications were removed, former DA users were required to complete Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorizations, and mail or fax it to the appropriate IRS location listed on the form’s instructions.
INCPAS continues to work with the AICPA to voice members’ concerns about the e-services being discontinued. Legislative
Indiana CPA PAC: It’s Up to You Ensure you always have a voice at the State House. Challenge yourself and your colleagues to contribute at least $10 for each year you have been a CPA. Supporting the only PAC that represents CPAs in Indiana is the best thing you can do today to protect the profession. Go to incpas.org/ advocacy-compliance/advocacy/indiana-cpa-pac. 2014 LEGISLATORS BREAKFAST The 2014 INCPAS Legislators Breakfast will be held at the Marriott downtown Indianapolis on January 16 from 7:30-9 a.m. The annual legislative event will feature a valuable opportunity to directly interact with legislators and key government leaders, and have your voice heard. As in years past, registration is free to members who invite their representatives. Register online at incpas.org today! CPA IN Perspective
IDOR Commissioner’s Corner Since my last column we have completed a very successful individual tax filing season. We realized new records on speed of processing, numbers processed, and amount of electronic filing (now at 79 percent, up from 73 percent last year!). Through the Automatic Taxpayer Refund Credit, more than $350 million was returned to the Indiana economy. In addition, we now have transitioned Indiana Department of more than 90 percent of all Indiana monthly Revenue Commisioner Mike Alley, CPA-Inactive business filers to electronic filing and payments of withholding and sales tax. As you may recall, the international consulting firm Deloitte concluded an extensive audit of the department’s controls and procedures in December 2012. Their report identified areas of focus for the department to improve both our processes and our services to taxpayers over the coming few years. The report offered multiple recommendations which we are addressing, and I want to share just a few of the major efforts now underway or complete consistent with those recommendations. In the accounting operations area, we have completed a full review of our chart of accounts. We have created a tool that allows us to automatically identify potential issues in the more than 400 accounts that we track. We also have assigned individuals to review each of these
To strengthen our institutional knowledge and improve our processes, we have formed product councils that include key subject matter experts throughout the department to solve problems, streamline processes, and better integrate our work. They have already proved highly valuable in identifying problems and the appropriate solutions. accounts, many for the first time ever. To further insure accuracy, we are automating the formerly very manual process of transferring thousands of journal entries from our taxpayer system of record (RPS) to the state’s accounting software (Peoplesoft). Another focus has been a review of accounts receivable reporting. This project will be completed in two stages. This summer we will incorporate a number of sub ledger corrections, and then implement reporting enhancements that will allow us to more accurately reflect actual receivables for the agency. This will improve the accuracy of our reporting and also improve the efficacy of our collection process. In our information technology division, major changes are taking
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place. A complete reorganization has been completed to better focus the cross-functional efforts of our IT group. In addition, a number of new leaders have been recruited to strengthen our team. We have added programmers, enhanced our quality assurance processes, instituted a more robust user acceptance testing process, and introduced a new methodology for programming changes. We are launching a major software project to replace selected audit and enforcement management systems which will improve the effectiveness of our compliance initiatives, installing new software to replace a number of “stand alone” technology systems not integrated with our main computer system, and enhancing our data warehouse capabilities. We also remain focused on enhanced security for technology across the board and are implementing several new encryption upgrades and have added to our IT security team. To strengthen our institutional knowledge and improve our processes, we have formed product councils that include key subject matter experts throughout the department to solve problems, streamline processes, and better integrate our work. They have already proved highly valuable in identifying problems and the appropriate solutions. We have also established a project management office and staffed it with key project managers and business analysts who can coordinate our efforts and projects across all divisions of the department smoothly and seamlessly. All of these efforts address recommendations in the Deloitte report. We have already accomplished much, but we also have much more work to accomplish as we address all of the report’s recommendations. All of these efforts are part of our Good to Great strategy. Consistent with the Good to Great challenge of Governor Pence, we have established a “roadmap” to help the Indiana Department of Revenue achieve best in class status. To do so, we have created a series of measurable objectives that will be challenging to achieve, but will illustrate our progress in better serving Hoosier taxpayers. Our key performance indicators are: • We will compare the dollars of revenue collected for the state against one dollar of cost to collect. Our minimum objective is to collect $230 for every $1 in cost. • To focus on our customer service, we will measure our percent of customer service calls successfully completed. The minimum standard will be 80 percent. • And, focusing on compliance issues, we will track the amount of revenue collected from noncompliant taxpayers. Our target for this year will be a minimum of $165 million. You can follow our progress by visiting the performance measure dashboard on the state transparency portal at in.gov/transparency. We are dedicated to helping make Indiana the best state for people and businesses to live and work. The Deloitte report gave us our start, and we’re building further to become best in class. As always, we welcome your suggestions and hearing about your concerns.
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Upholding Integrity ROI: Access to the resources that are important for you as a professional to uphold the integrity of the profession. Board of Directors The INCPAS Board met on June 20 for their last meeting of the 2013 fiscal year. Three incoming board members, Lorita Bill, CPA, Roger Booth, CPA, CGMA, and Troy Gilstorf, CPA, attended as guests along with AICPA Board liaison Charly Weinstein, CPA, from New York. The board approved the Society’s operating and capital budgets for fiscal year 2014, along with volunteer appointments for two committees, three advisory councils, INCPAS Leadership Cabinet and Emerging Leaders Alliance. A legislative report on the 2013 legislative session was given by staff. Other key items of discussion included a review of the AICPA spring council meeting and the issues addressed there, the proposal to change the definition of attest in the Uniform Accountancy Act, updates on INCPAS programs and services, and a review of knowledge management initiatives including recommendations for intellectual property protections and the recent firm pilot program and competency assessment tool. Board Level Task Forces As has occurred over the past several years, board members have been assigned to three board level task forces and began their work on June 20. Each task force will be reviewing the Society’s strategic plan with the goal of developing an updated plan that is more adaptive and emergent. INCPAS Vice Chairs Bettie Caldwell, CPA, CGMA, Steve Beardsley, CPA, CVA, and Matt Pletcher, CPA, CGMA are chairing the three task forces. Recommendations will be presented in November. For more information on the INCPAS Board of Directors, contact Gary Bolinger, CAE gbolinger@ The Diversity Summit is incpas.org. planned by the Diversity Programs Project Team.
INCPAS Leadership Cabinet and Emerging Leaders Alliance A successful spring meeting was held on May 30-31 at the Radisson Star Plaza in Merrillville. Knowledge management and the CPA Center of Excellence™ initiative was the main topic of discussion, but meeting attendees were also treated to presentations from AICPA Chair Rich Caturano, CPA, and Indiana Rep. Hal Slager, CPA-inactive (R-Schererville), and updates from the Indiana Regulatory Occupations Evaluation Committee and CPE Standards task forces. The two CPA Center of Excellence™ components emphasized the most were the SenseMaker® competency assessment tool and the CPA Center of Excellence™ Online. INCPAS knowledge management and complexity advi-
CPA IN Perspective
sor David Griffiths, Ph.D., from Wales in the UK also discussed strategy and the new strategy management toolkit, and led a panel featuring four Fusion Network members. Response to both the assessment tool and the online community were extremely positive. Eighty-seven percent of the participants said the assessment tool would help them assess their CPA core competency skill level. Ninety-one percent said it would be of value to public accounting firms (the first version of the assessment tool is geared toward public accounting, but industry and individual versions will be available soon). And, 87 percent said the assessment tool was worthwhile. Regarding the CPA Center of Excellence™ Online, 71 percent said it looks great and they would give it a try. They also identified numerous benefits in using it – collaboration, best practices, connection to members, resource for questions, one place to go for everything, access to specialized knowledge, and enhancement of the CPE model. The top three uses were identified as professional news, networking and technical information. The fall LC/ELA meeting is October 30-31 at the Westin in downtown Indianapolis. For more information on LC/ELA, contact Sherrill Rude, CAE email@example.com. Diversity Advisory Council and Diversity Programs Project Team The INCPAS Diversity Advisory Council will meet in September. The council will continue to establish a long-term diversity plan to present to the Society’s Board, as well as evaluate the success of the current diversity programs. Ernest Kammogne, CPA, CGMA, CIA, CFSA, from Cargill Inc. will be welcomed as a new member.
Diversity programs are expanding throughout the state. Students from the South Bend area will be sought for the INCPAS Scholars program, and a second Game On: CPAs in Action event will be held in South Bend this fall. Game On also will expand to Fort Wayne in the spring of 2014. The Indianapolis Game On event is October 1. Up to 20 $500 academic gifts were presented to INCPAS Scholars participants at the Diversity Summit on August 9, and 12 scholarships in the amount of $1,000 each were presented to college students. Thanks to the INCPAS diversity program sponsors for their support of these gifts and scholarships. The INCPAS Diversity Programs Project Team has continued its work in planning content for the INCPAS Diversity Summit and the upcoming Game On events. For more information on the INCPAS Diversity Advisory Council and the Diversity Programs Project Team, contact Ali Paul firstname.lastname@example.org. Government Relations Advisory Council GRAC met on June 14 and will meet again on September 26. At the June meeting, the council reviewed and accepted reports from the Indiana Regulatory Occupations Evaluation Committee and CPE Standards task forces. INCPAS lobbyist Lou Belch gave a legislative report and discussed potential items for the 2014 legislative session. And the council received updates on the election of Indiana Board of Accountancy officers Greg Coy, CPA, Jamie O’Brien and John Kane, CPA, CGMA, and the appointment of new Professional Licensing Agency Executive Director Nick Rhoad. In other GRAC news, past INCPAS Chair Dale Gettlefinger, CPA, JD, has joined GRAC as a new member. And the Indiana Secretary of
State’s office is creating a Business One-Stop Portal, and GRAC will be working with them as plans are developed. For more information on GRAC, contact Sherrill Rude, CAE email@example.com. Tax Resource Advisory Council TRAC met on July 10 with IRS and Indiana Department of Revenue representatives. Some of the topics discussed with the IRS included issues from the 2013 filing season and the discontinuation of the Disclosure Authorization and Electronic Account Resolution e-Services. IDOR topics include corporate online filing, composite filing, the Automatic Taxpayer Refund Credit, cancellation of Debt Add-back clarification, tax penalty relief for farmers, and Municipal Interest Income on out of state mutual funds. New IDOR Deputy Commissioner for Enforcement Ron Broughton attended the meeting. The meeting also included a legislative session recap from INCPAS lobbyist Lou Belch. A practitioner liaison meeting with the IRS was held prior to the TRAC meeting. Dave McDaniel, CPA, from Sikich, LLP became chair of TRAC effective July 1. New TRAC members include Geoff Frazier, CPA, from Grant Thornton, LLP, Scott Novak, CPA, from CliftonLarsonAllen LLP and Richard Wheeler, CPA. For more information on TRAC, contact Sherrill Rude, CAE firstname.lastname@example.org. Indiana CPA-PAC Indiana CPA PAC Trustees met on May 24. INCPAS lobbyist Lou Belch attended to provide a recap of the legislation session and recommendations for contributions. The trustees also approved $26,500 in contributions. For more information on the Indiana CPA-PAC, contact Sherrill Rude, CAE email@example.com.
Indiana CPA-PAC It’s up to you. Ensure you always have a voice at the State House. Challenge yourself and your colleagues to contribute at least $10 for each year you have been a CPA. Supporting the only PAC that represents CPAs in Indiana is the best thing you can do today to protect the profession. Contribution form at incpas.org/advocacy-compliance/ advocacy/indiana-cpa-pac
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GR WTH It’s what CGMA stands for. Officially, of course, it’s Chartered Global Management Accountant. A new designation representing accomplished professionals that drive and deliver business success, worldwide.
Copyright © 2012 American Institute of CPAs. All rights reserved.
Find out more at cgma.org
CPA Firm Strategy
Public Accounting Firms On a recent trip, traveling with my two-year old, a flight attendant came by before we took off to remind me that “in the event of an emergency” I should put on my own oxygen mask first and then help my son. I said “O K.” Then, after she walked away, I looked at my husband who was sitting across the aisle and said “I’m not doing that. I’m going to help him first.” Perhaps in a less dramatic fashion, CPAs are the recalcitrant mom in this story with a short-sighted vision of a possible future scenario. You always want to help someone else before you help yourself. Let me start by saying, I am continually impressed with the knowledge and expertise of our CPA members and the complexities they have to manage. It is not an easy profession, but I’ve never worked with a more committed group of people. You all fix problems. You can make people and businesses successful. You care. Last year, when I asked a group of about 20 CPAs who run 30+ person firms around Indiana what “gets them going in the morning” (vs. what keeps them up at night), the overwhelming majority responded that it is “relationships.” The relationships they get to build with their clients and how they get to see the clients’ business and personal dreams being met. But these same helpful, amazingly smart people won’t spend the time on their own businesses that they spend helping clients. When I asked a question about how much time they devote to strategic planning or succession planning in their own firms, the very general response was a plaintive “we know we need to do a better job of it, but … (fill in the blank with a variety of timerelated excuses)” This doesn’t apply to all public accounting firms, though it applies to more than I could have imagined before I had the opportunity to ask these sorts of questions. And even those organizations that make plans don’t always tell their own people about them. I’m not sure if it’s a lack of trust, concern that other staff will want decision-making power, or that there just really isn’t time to talk, but many firms are not on the same page
with staff about the direction of their organizations. And, usually the people who need the most encouragement and the best understanding of what the future holds — the youngest staff members — get the least amount of information. The divide between the partners who say they worry about succession and the young people who have no idea what the future of their firm holds (and worry about it) is often staggering. One very involved, very intelligent young CPA said to me recently “I don’t expect a seat at the table, I just want to know that there is a table somewhere and that someone’s sitting at it.” I get to engage with partners of firms of all sizes and the newest talent being recruited around the state. Guess what? You all want the same things — you just aren’t talking to each other. Again, I love you guys and I know you have good intentions, but it’s time to work a little more strategy into your business cycle and start communicating about it. Help yourselves. If you need a reminder or a place to start, a Harvard Business Review blog post by Roger Martin may be worth your time. Martin is dean of the Rotman School of Management at the University of Toronto. In his February 2013 hbr.org blog post titled “Don’t Let Strategy Become Planning,” Martin discusses the need for organizations to have a one-page document that answers these questions: • What is our winning aspiration? • Where will we play?
• How will we win? • What capabilities need to be in place? • What management systems must be instituted? And, if you don’t trust Roger Martin, just go back to the classics. Management guru Peter Drucker’s “Five Most Important Questions You Will Ask About Your Organization” may help: • • • • •
What is our mission? Who is our customer? What does the customer value? What are our results? What is our plan?
Taking one of these approaches and defining these questions would be a great start. Just imagine if everyone in your firm could answer these questions in remotely the same way! I would like to see more public accounting firms embrace strategy. It’s not just something that should be done, but that you don’t have time to do. It’s something that’s integral to paving your way into the future. And more importantly, talk to your staff about strategy. I don’t believe the sky will fall when Boomers retire, I think those few Gen Xers and the Millenials will figure it all out, but, do you want the succession to be smooth or painful? Do you want to have people around who can take your place and actually want to? If so, give them a hand and at least let them know what you’re thinking from time to time. I have dedicated more than a decade to helping the Society meet its mission. My outlook for the profession is very positive and I deeply value the people I get to serve in my role here. I think that’s why I’m so passionate about wanting more CPAs to make the most of the talent and opportunities that abound. If you would only take care of yourselves the way you take care of clients, you would feel better prepared for whatever lies ahead.
Jennifer Briggs, CAE Senior Vice President
CPA IN Perspective
The Pathways Commission
The Pathways Commission Report: A New Approach to Accounting Education? By William H. Svihla, CPA, CFE, CGMA, CITP, DBA Svihla & Associates CPAs, LLC
An increasing trend in globalization of business; rapid emergence of new business transactions; moving toward principles-based international accounting standards; continuous evolution of new technological applications; an aging university faculty; a shift in the racial and ethnic demographics of American society; increasing technological sophistication of our youth. What do these have in common? These were factors considered by the joint AICPA and American Accounting Associationâ€™s Pathways Commission in drafting its report Charting a National Strategy for the Next Generation of Accountants (Pathways Commission Report, July 2012). The Pathways Commission was formed on the basis of the recommendations by the U.S. Treasury Departmentâ€™s Advisory Committee on the Auditing Profession (2008) which charged the AAA and the AICPA to study the future structure and content of accounting education.
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The Pathways Commission
Efforts to understand what attracts people to accounting, the causes of supply constraints on the number of accounting graduates, and what academic preparation and experience CPAs and other accounting professionals should possess, are not new topics to any of us. In fact, the Pathways Commission cites an article published in the very first issue of the AICPA’s Journal of Accountancy (November 1905) which discussed needed changes to accounting education in order to move the accounting profession to a level equal to the professions of law, medicine, and theology. Even the 150 hour requirement was debated as far back as 1932. The Pathways Commission is perhaps unique for two reasons. First, rather than issue its report and disband, the AAA and the AICPA made a three-year commitment to support the implementation of its recommendations. Secondly, the Pathways Commission’s report addressed all segments of the CPA profession: corporate, governmental, nonprofit, regulatory and public accounting. The Pathways Commission’s report includes several broad recommendations aimed at improving accounting education by better integrating accounting research and practice, increasing number of doctorally-qualified accounting faculty, improving accounting curriculum, expanding recruitment efforts to include a more diverse segment of society, and increasing the emphasis on the quality of instruction. Once its report was finalized, the Pathways Commission began the process of finalizing its strategy for implementing its recommendations.
The Pathways Commission’s Recommendations 1. Increase the integration accounting research, education, and practice for students, accounting practitioners, and educators by bringing professionally-oriented faculty into accounting programs. 2. Increase the access to doctoral programs by allowing for flexible pedagogies in existing doctoral programs and allowing alternative pathways to terminal degrees. 3. Reform accounting education so that high quality teaching is recognized, respected and rewarded as a critical component in achieving each institution’s mission. 4. Develop curriculum models, engaging learning resources, and mechanisms for easily sharing them as well as enhancing faculty development opportunities in support of sustaining a robust curriculum. 5. Improve the ability to attract high-potential, diverse entrants into the profession. 6. Create mechanisms for collecting, analyzing, and disseminating information about the current and future markets for accounting professionals and accounting faculty. 7. Establish an implementation process to address these and future recommendations by creating structures and mechanisms to support a more continuous, sustainable process.
Efforts to understand what attracts people to accounting, the causes of supply constraints on the number of accounting graduates, and what academic preparation and experience CPAs and other accounting professionals should possess, are not new topics to any of us. CPA IN Perspective
The Pathways Commission
The Pathways Commission report claims that unlike the professions of law, medicine, theology and engineering, there is no intentional integration of academic research within the CPA profession. I experienced the reality of this disconnect first-hand while presenting an overview of the Pathways Commissionâ€™s report to the INCPAS Leadership Cabinet and Emerging Leaders Alliance in May 2013. I listed several titles of common academic accounting journals and asked how many of the participants read from them regularly: virtually none raised their hands. Had I read off the list of those same journals to accounting academics, virtually all would have been familiar with them. The example highlighted the fact that practitioners are generally unaware of academic accounting research. The Pathways Commission attributes this disconnect to the fact that most accounting faculty graduating since the early 1990s lacked any substantial professional experience prior to completing their doctoral degrees. The Pathways Report recommends a two-fold approach. First, it recommends increasing the use of professionally-oriented faculty (faculty with significant professional experience but who lack a doctorate or other terminal degree). Secondly, it recommends providing academic accounting faculty with exposure to practice using faculty internships and other exchanges, such as having practitioners serve on advisory boards, as mentors to faculty, as team teachers, or serving as guest speakers. The Pathways Commission believes implementing these two approaches will provide faculty with exposure to emerging issues, which they can then draw on when selecting research topics, align course curricula with existing and emerging practice trends, and provide enhancements to learning experiences. They may also gain access to actual accounting data to use in their research, once issues related to client confidentiality have been appropriately addressed.
Recognizing that expectations drive results, the report recommends raising the weighting placed on the quality of teaching to a level equivalent to that assigned to research. Connecting teaching excellence with the mission of the university is one way for this to happen. A spillover benefit of these exchanges will be that participating faculty are better able to provide students with an deeper understanding of the dynamic nature of accounting and the breadth of available career options. This may be particularly important in attracting students who lack an understanding of the roles CPAs serve, the career paths they have available to them, and what education and certification are necessary for each career path. Lastly, it may provide practitioners with a greater appreciation for faculty research. The impediments blocking the implementation of this recommendation are daunting. First, faculty appraisals typically favor faculty who publish articles in top-rated academic journals because
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the institutions themselves are ranked by the publication production of its faculty. Practitioner-oriented research often carries a much lower weight in these decisions, even if the professional journal subjects all articles to a peerreview process and has a comparably low acceptance rate for submitted manuscripts. Implementing this recommendation will require changes to the processes for evaluating faculty for tenure, promotion and compensation purposes. Changing these policies may require gaining approval at the department, school, college and university level. The institution must also consider how such changes may be viewed by outside accrediting organizations, such as the AACSB. There are also significant university cultural barriers that may discourage accounting practitioners from pursuing faculty positions. Often, unless the practitioner holds a doctorate or other terminal degree, they are relegated to a lower class status amongst their peers. They typically do not qualify for tenure. Furthermore, they frequently do not receive the same benefits made available to doctorally-qualified faculty members. For many professionals, faced with the prospect of starting at the bottom rung in both status and compensation, they choose to stay in their present career.
While the first recommendation promotes the increased use of professionally qualified faculty, the present shortage in doctorallyqualified accounting faculty will only worsen as baby boomer faculty members begin to retire. Unless the attrition rate is abated, there will be fewer doctorally-educated faculty to conduct accounting research and teach undergraduate or graduate courses. Doctoralgranting institutions may have a reduced capacity for educating doctoral students. Smaller schools may find it nearly impossible to hire doctorally-educated faculty. This threat lead to the Pathway Commissionâ€™s second recommendation to increase access to doctoral education. The present norm for doctoral programs is a residential Ph.D. program requiring three to five years of commitment. This is difficult for many professionals to embrace given professional, financial and familial concerns. The Pathways Commission argues that adapting doctoral programs to a model akin to executive MBA programs may help to alleviate the shortage of doctorally-qualified accounting faculty. Such programs are flexible, part-time and nonresidential. There are significant impediments to implementing this recommendation. First, doctoral programs are very costly and without external funding, an institution has little or no incentive to offer any doctoral program, let alone a nontraditional program. Secondly, the faculty of existing doctoral programs are generally satisfied with their programs and fear the changes may weaken their programs, perhaps even bringing their accreditation status into jeopardy. Finally, as noted with the first recommendation, there are significant institutional barriers to overcome to have new programs approved.
The Pathways Commission reported faculty research production is typically assigned a higher weighting in appraisal processes than are assigned to teaching and curriculum development. The Pathways
The Pathways Commission Commission also found that resources often are primarily dedicated to research production rather than to developing teaching excellence or for curricular development. It should not be too surprising to find that instruction and curricular development tend to take a back seat in a faculty member’s development plans. Recognizing that expectations drive results, the report recommends raising the weighting placed on the quality of teaching to a level equivalent to that assigned to research. Connecting teaching excellence with the mission of the university is one way for this to happen. As greater importance is placed on the excellence of teaching, curricular and instructional innovation are more likely to take place. The report also recommends providing monetary teaching incentives equivalent to those provided for research, calling for external funds to provide resources. The report also calls for developing a peer review process for evaluating teaching akin the process used to evaluate research. Including peer-reviewed teaching portfolios as a component of a faculty member’s annual evaluation, similar to what is presently done in teacher education programs, would also enable a more consistent evaluation of teaching excellence than current methods (such as the end of semester student evaluations widely used at universities).
According to the Pathways Commission Report, accounting courses have traditionally been developed on a course-by-course basis, where the content of the course is determined by topical area, or perhaps by the interests of the faculty member teaching the course, rather than from reference to a common body of knowledge. The goal of the fourth recommendation is to tie curriculum to a common body of knowledge mapped to critical competencies and related performance levels. The first stage of its implementation involves developing a common body of knowledge drawn from faculty, administrators, regulators and practitioners. Next, the common body of knowledge would be mapped to specific competencies and related performance levels. These competencies would then be embedded in course curricula providing internal measures of the quality of learning (and instruction). The competencies would also assist in developing (and evaluating) effective instructional materials. This process is similar to the process followed by the INCPAS Knowledge Management Task Force when developing its core competency descriptors. Implementing this recommendation requires substantial effort by faculty which may not be valued very highly in the promotion, tenure and compensation decision process. The greatest impediment to implementing curricular innovations is, again, the low weights typically assigned to curriculum and materials development in faculty appraisals. Recognizing this, the AAA will be developing a depository for teaching and curricular resources to help faculty transform courses and to include content addressing emerging issues in the CPA profession. Finally, substantial curricular changes often require a long time to accomplish because approval may be required of department, school, college and university level curriculum committees.
One of the long-term problems in attracting new students into accounting is a general lack of knowledge by students about the varied career opportunities available within the CPA profession. Add to this mix the general failure of the CPA profession in attracting students from Asian, African-American and Hispanic backgrounds, and the specter of an impending shortage in the supply of CPAs raises its ugly head. To resolve this dilemma, the Pathways Commission recommended raising
According to the Pathways Commission Report, accounting courses have traditionally been developed on a course by course basis, where the content of the course is determined by topical area, or perhaps by the interests of the faculty member teaching the course, rather than from reference to a common body of knowledge. the academic standing of high school accounting courses, revising the first course in accounting, enhancing learning materials to match the expectations of a generally technology-savvy generation, and researching how students make their career choice decisions. Their recommendations involve the committed involvement of high school, community college, and university faculty as well as practitioners. While high school students can take advanced placement (AP) classes in math, science, and languages, accounting classes are often viewed as vocational classes, and therefore not “suitable” for collegebound students. Granting AP credit to accounting classes would increase their status and thereby appeal to a wider variety of students. The second component to this recommendation is to revise the first course in accounting so that it demonstrates the career paths available to CPAs as well as the education and certification required for each career path. The report also calls for practitioners to serve as high school mentors and to offer job shadowing and internship programs to help students better grasp the available career options. Their final component of this recommendation is to make it easier for a person graduating with a non-business degree to return to school and take accounting courses. Most existing fifth-year programs require substantial business and accounting prerequisites to be satisfied, which may dissuade non-business majors from considering them, particularly those coming from financially disadvantaged backgrounds.
The AACSB, the AICPA, the National Association of Black Accountants, the AAA and other organizations all gather data about the supply and demand for CPAs. However, the data are not comparable in terms of content or in the time periods studied. The data may not always be in a form that is readily useable by researchers, nor is it always readily accessible. There is currently no coordinated process for capturing information about accounting programs, career opportunities, and accounting majors. Likewise, there is no comprehensive database tracking the supply and demand of accounting graduates, other than the AICPA’s biannual survey of demand for public accounting. Other than very crude statistics about the demand for accounting faculty, there is no comprehensive database available to researchers. The AAA is currently developing a comprehensive database of accounting faculty that will be used to develop the surveys used to assess demand for accounting faculty. The Pathways Commission recommends coordination between the AICPA for public accounting and the Financial Executives Research Foundation of FEI for corporate accountants in developing a comprehensive database of CPAs. CPA IN Perspective
Definition of Attest
Q: Are you sure you what attest is (and Ask just about any CPA what “attest” means and you will surely get an answer. But will you get the right answer? You might also get a different answer depending on what state you are in. Say what? Yes, attest doesn’t mean the same thing to every CPA, and it doesn’t mean the same thing in every state in the U.S. For example: is a Service Organization Control (SOC) Report attest? What about agreed upon procedures? A compilation report? What about reporting on pro forma financial information? Or compliance attestation? Finally, reporting on controls at a service organization? The answer is no, no and no (at least in Indiana). It is important that clarity surrounds the legal definition of attest. Attest services are unique among those services provided by CPAs, due to the fact that they are the services that are provided only by licensed CPAs operating within a licensed CPA firm. The rationale, as affirmed by the AICPA Council in 1997, is that “these services are the most publicly sensitive because the public and other third parties rely on the licensee’s report …” It is critical to the public interest that attest functions are performed solely by licensed CPAs. The Indiana Accountancy Act is very specific about attest:
The AICPA/NASBA Uniform Accountancy Act (UAA) is pretty much the same as Indiana. (1) any audit or other engagement to be performed in accordance with the Statements on Auditing Standards (SAS); (2) any review of a financial statement to be performed in accordance with the Statements on Standards for Accounting and Review Services (SSARS); (3) any examination of prospective financial information to be performed in accordance with the Statements on Standards for Attestation Engagements (SSAE); and (4) any engagement to be performed in accordance with the standards of the PCAOB.
IC 25-2.1-1-3.8 “Attest” Sec. 3.8. “Attest” means to provide any of the following financial statement services: (1) An audit or other engagement performed in accordance with the AICPA Statements on Auditing Standards (SAS) or other similar standards adopted by reference under IC 25-2.1-2-15. (2) A review of a financial statement performed in accordance with the AICPA Statements on Standards for Accounting and Review Services (SSARS) or other similar standards adopted by reference under IC 25-2.1-2-15. (3) An examination of prospective financial information performed in accordance with the AICPA Statements on Standards for Attestation Engagements (SSAE) or other similar standards adopted by reference under IC 25-2.1-2-15. (4) An engagement performed in accordance with the standards of the Public Company Accounting Oversight Board.
“The users of information resulting from attest services need to have the confidence the work was performed in accordance with professional standards that are consistent and proven.”
So, it appears that attest in Indiana is an audit, review, an examination of prospective financial information prepared under SSAE, or any engagement performed in compliance with PCAOB standards. That’s it. No other service is legally an attest service in Indiana. But to be sure, 36 other states have a similar definition. Only 14 states include all SSAE engagements in the definition of attest. Ohio is one of those states. The Ohio definition is: 4701.01 Accountancy board law definitions. (S) “Attest report” means an opinion report, review report, compilation report, examination report, agreed-upon procedures
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report, or any similar report prepared in accordance with standards established by the American institute of certified public accountants with respect to a financial statement or other financial information.
Keep in mind that the UAA is not authoritative. It is simply a model for state legislatures to consider in drafting accountancy laws in their respective states. The world has changed and will continue to change. Should other services be defined as an attest service? “It is important to change the legal definition of attest because we are embarking on a new era where CPAs are being asked to provide
— Ben Kimmerling, CPA, CGMA, Somerset CPAs assurance on many other things than strictly financial statements,” said Kevin Kruggel, CPA, CGMA of Kruggel, Lawton & Co. in South Bend. “SOC reports come to mind, as well as the emerging issue of integrated reporting. CPAs are best suited to providing this type of assurance because we have strict licensure requirements related to education, ethics, and experience which others do not necessarily possess. I feel it is in the public’s best interest to know that CPAs stand for attestation and assurance in all areas.” Historically, attest/assurance services have been generally limited to audits and reviews of historical financial statements performed in accordance with SAS or with SSARS. However, CPAs increasingly have been requested to provide, and have been providing, attestation
Definition of Attest
u know d is not)? services on representations other than historical financial statements. The marketplace and needs of clients have been changing. In responding to these needs, CPAs have been able to apply the basic concepts underlying audit and review to these assurance services. The Statement of Standards for Attestation Engagements (SSAE) and related interpretive guidance provide a general framework for the attest function. The public policy debate is simple. Should a non-CPA be permitted to apply AICPA standards in providing these services? Non-CPAs do not possess the technical competence, independence in fact and appearance, objectivity and integrity that CPAs do. In addition, a nonCPA is not likely as skilled in concepts related to due professional care, adequate planning and supervision, sufficient evidence, appropriate reporting, and the application of professional judgment. “Our profession is changing rapidly,” says Matt Pletcher, CPA, CGMA of Insight Accounting in Goshen. “We must keep up with current changes, which might result in inadvertent exclusions of services requiring a high level of standards provided by CPAs. Additionally, there are emerging topics that companies want to share with the public. Topics such as sustainability issues, uses of human capital, contributions to local economies and, environmental impact are becoming more important to individuals who invest or regulate these companies.” At the May 2013 meeting of AICPA Council (the governing body of the AICPA) a resolution was adopted in support of changes to the definition of attest. As a result, the AICPA/NASBA Joint UAA Committee will draft language to be considered by the AICPA and NASBA Boards of Directors. If approved, the language will be released as an exposure draft and comment. At the end of the public comment period, the joint UAA committee would consider all feedback and incorporate appropriate changes into the proposed language. After a final version of the updated attest language is approved by the AICPA and NASBA boards, the new attest language would become the official language of the UAA. Then Indiana and other state CPA societies, state boards of accountancy, and other profession stakeholders will be able to work with the state legislature to amend the state accountancy laws. When the state accountancy laws are amended to reflect the wide variety of attest services that are available and can only be provided by CPAs, public confidence will be enhanced, “the users of information resulting from attest services need to have the confidence the work was performed in accordance with professional standards that are consistent and proven,” said Ben Kimmerling, CPA, of Somerset CPAs in Indianapolis. The process to modernize the definition of attest will not be an easy one. Members in states throughout the country will need to work with their state societies and assist in outreach to elected officials to ensure the best possible outcome. In Indiana, we will keep you informed on the evolution of this issue. When the time comes, we will reach out to ask for your assistance in the legislative process.
By Gary Bolinger, CAE INCPAS President and CEO
at•test: So, it appears that attest in Indiana is an audit, review, an examination of prospective financial information prepared under SSAE, or any engagement performed in compliance with PCAOB standards. That’s it. CPA IN Perspective
The re:Source eBook
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Knowledge for the Future
Is it time to start destroying your “old” services? By David Griffiths, Ph.D. K3-Cubed
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Knowledge for the Future
Recently I spent four weeks working closely with six CPA firms in Indiana. With each of them I was struck by a feeling of self-similarity; each shared common challenges with the other five. But I want to share with you one key difference among firms in this group and one concerning trend around core business. The CPA profession is in a state of constant change. A year ago I was speaking to the INCPAS Leadership Cabinet and Emerging Leaders Alliance about integrated reporting and there was an underlying feeling of curiosity toward the problem, but no real impetus from the majority to explore the concept further. Now, 12 months down the line, we have a template being tested and more of the organizations I am dealing with, outside of the accounting field, are discussing the implications for them, in terms of the management/value of intangible assets. “Our failure to appreciate new opportunities or threats as a mandate to re-think core processes is profound. Instead we ‘pave the cow path’ far too often. If we had an aspiration for quality at our core, we would always be looking to do things better. But if we don’t, where does that leave us?” - John Bordeaux (IBM Global Business Services Strategy and Innovation) This first distinct difference between firms is what I call the “traditionalists” and “adventurists.” Traditionalist firms feel like “digital immigrants.” They work to traditional ideas of community, defined by lines on a map. They speak of business opportunities in terms surrounding counties. They encourage staff to mine networks exclusively within those communities and there is a focus on traditional networking methods (e.g. participating on the board of the community baseball league). I have posed questions for firms working with this type of approach: what is the age of the client book? What it the attrition rate (aging communities mean client attrition)? From this, what does new client on-boarding look like, in order to just sustain business over the short to mid-term? If succession planning is an issue (it generally is), and you need to achieve growth in order to bring on new partners to action an exit strategy, what does growth look like against the attrition rate, and how will you achieve new growth? Traditionalist firms also tend to speak of challenges around employee recruitment and growth of new services. These are significant problems that could see the demise of many established firms over the coming years. The concern is that, if left unattended, the value of the firm will diminish and decades of hard toil could evaporate. After all, where is the value in an ageing book of traditional services, especially if those services are under threat (e.g. tax return services)? Enter the adventurists, the “digital natives.” These firms are experimenting with non-traditional services (e.g. international tax). They are aware of the environment and are participating in work within emerging areas (e.g. integrated reporting). Lines on maps mean nothing to these firms. They speak of regional, national and international
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Can lead to
Conservation Tight coupling, conforming to norms, storing energy and resources
Maximize benefits of fitness to landscape
Sustain fitness to landscape
Adapted from CS Holling
The Organizational Adaptive Cycle
Knowledge for the Future
Controlled (by design), though more often uncontrolled (trauma) destruction
Realignment of fitness to landscape
D.A. Griffiths (2013) K3 Consulting, www.k3cubed.com
opportunities. Networking is both a face-to-face and digital experience. They advertise their expertise to borderless digital markets, writing content-led resources (e.g. blogs, whitepapers or online thought leading articles) that bring them new clients who they never meet face-to-face. Employees are not constrained by the location of the “home” office. Instead, home is the office, allowing for the acquisition of talent that is a better fit for the firm and the environment in which they operate. However, there is still a problem inherent to both the traditionalists and the adventurists. Both cling to traditional or founding services, the services that made the firm successful all those years ago. Firms acknowledge a struggle with the traditional tax season. They acknowledge the struggles with an aging community and single generation businesses within those communities. They recognize the stress load placed upon partners through to general staff during the heat of tax season. They know they lose talented people to industry because of the impact of the tax season upon families and levels of compensation. They also know that this service niche is under threat in the mid- to long-term. The bigger problem is that firms are caught in a viscous cycle, where tax season ends and staff across the firm take several months to recover (there seems to be a long mental pause). Then, just as energy levels and enthusiasm for the job begin to return, the holidays are approaching and the next tax season is looming large. People spend their time mentally preparing for what is to come by doing as little as possible in other vital areas of the business.
Lack of fitness to landscape
Requires At the same time, firms are saying that anywhere from one to four hundred tax returns can be the equivalent to one audit that last anywhere from two to three weeks. There is also the recognition that clients want more from their CPAs, they want/need solution providers more than they want/need service providers. This shift in client need means that CPA firms have to change to remain relevant. So, is it time for a change? Sometimes it comes down to “creative destruction.” You have to be creative and destroy what you have built in order to be relevant in the future. (See diagram). Have a look at the “adaptive cycle” diagram, taken from the same sources that have been used to inform thinking on eco-finance (new thinking in the evaluation of financial risk). Too many firms seem stuck in the conservation phase. They are working to sustain traditional services that were a fit with the environment at the time they were designed. The challenge now is for firms to begin a controlled release of those services, investing energy and resources into the development and provision of new services that allow for a reorganization of core business that better fits the economic and social environment. This is a significant challenge for CPA firms, but INCPAS has worked to develop tools, informed by CPAs for CPAs, to help members and their firms through this type of transition. If you are worried about the traditionalist approach and what it might mean, why not get in touch and see what the Society can do for you. CPA IN Perspective
Continued Day in the Life.....
installing a pocket park behind Englewood Community Development Corporation’s new apartment building, The Commonwealth, installing a small pocket park alongside Merrill Street townhomes, along the Cultural Trail.
3 p.m.: Our IPL Project Greenspace projects, as well as our NeighborWoods tree plantings, are all excellent corporate volunteer opportunities. Our program staff, as well as our volunteer and development team, are seasoned volunteer project managers. Any group volunteer experience with KIB will be well-organized, systematic and fun. At the moment, our program staff are meeting with community partners and planning work days. Many of our community volunteer projects take place on Saturdays. But we frequently arrange weekday opportunities for corporate partners. Our largest corporate partner is Eli Lilly & Company. For five years, we have managed Lilly’s annual day of service. Over those five years, Lilly employees have put in 171,439 hours of service and planted 9,376
trees. They have also planted thousands more perennials as well as improved countless indoor and outdoor spaces around the city. Needless to say, my job includes many more functions than I ever expected when I become a CPA. I became a CPA because I did well in my accounting classes and my dad, who is also a CPA, explained Garden plans in the Keep Indianapolis Beautiful office for Fletcher Park. that all businesses need munity organizations and engaging youth is a CPAs. So no matter daily reward. what sort of industry I wanted to work in, my CPA designation could help me get there. I am thrilled with the opportunity I currently Do you think a day in your life would make a have, which is to use my CPA knowledge to good addition to our series? Contact INCPAS help improve the Indianapolis community. Senior Manager — Member Communications Knowing that I am apart of improving the Stephanie Parton, CAE, at firstname.lastname@example.org environment, working with grassroots comto find out how you can share your story.
Classifieds Thinking of buying, selling or merging?
Indianapolis … CPA firm … $1.5 million revenue
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Thinking of Selling Your Practice?
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Read it Online Five Talent Trends To Act On
CPA Management Essentials
By Sandra Wiley
By Gary Adamson, CPA
The 2013 tax season is behind us, but that certainly does not mean that we can take a break. It is time to refocus on other important things in our firm, and one of those is talent. Specifically, the human resources trends that every business should be spending time on. The trends below represent the human resources issues that should be on your radar as you move forward in 2013. Health Care Costs: It comes as no surprise that health care costs are not going down in the years ahead. If you are choosing the passive road and simply waiting and seeing what your health care vendor tells you the new rates will be, don’t be surprised when you have a panic attack after seeing your new premiums. Start now and proactively talk to your health care provider about the steps...
What do you think of when you hear the word “coach?” For most of us it brings up thoughts of athletics and someone who has coached a team that we have been a part of or maybe one that we follow as a fan. If you had the opportunity to play on a winning team and work with a great coach, especially in your younger years, you won’t forget it. That individual was likely a positive influence in your life who you will always remember. You’ll find several definitions of coach or coaching in the dictionary but here is what a good coach really does: They help you to perform at a higher level than you can achieve on your own. And, how do they do it? They do it by using a very personalized combination of support, encouragement, teaching...
Validate How You Market Your Services with Google Trends By Roy Keely Xcentric
A silver bullet marketing idea is a farce. There is always more behind the scenes of any successful marketing campaign than a mere “idea.” In addition, success of a campaign depends largely on your firm’s makeup, goals and demographics and cannot be reduced to one single initiative. It takes hitting on all cylinders to really make a difference from one year to the next. A favorite marketing quote that I tend to come back to is “small hinges swing big doors.” The small hinge in this example is speaking the language of your target market across all mediums. This includes websites, presentations, mail pieces, etc. It’s not easy...
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5 Talent Trends To Act On By Sandra Wiley
The 2013 tax season is behind us, but that certainly does not mean that we can take a break. It is time to refocus on other important things in our firm, and one of those is talent. Specifically, the human resources trends that every business should be spending time on. The trends below represent the human resources issues that should be on your radar as you move forward in 2013. Health Care Costs: It comes as no surprise that health care costs are not going down in the years ahead. If you are choosing the passive road and simply waiting and seeing what your health care vendor tells you the new rates will be, don’t be surprised when you have a panic attack after seeing your new premiums. Start now and proactively talk to your health care provider about the steps your firm can take to hold costs down or change your plan to reduce prices. Some firms are finding that developing “health programs” in their firm and then turning in the ongoing results to their health care providers is a positive step. The results of their proactive program being tied to lower usage is equating to lower increases in overall premiums. Shortage of Skilled Professionals: This challenge does not come as a huge shock to anyone in our profession. We have amazing talent in our firms, but we just want more of them. At the core of the problem is that there are simply less people in the current Gen X and Y age groups than there are in the retiring baby boomer generation. Pair that fact with the lower number of individuals that are choosing to stay in the public accounting arena and we just have less people to work with today. This challenge must be met with a stronger emphasis on moving top talent into higher level work faster and more time spent mentoring, teaching and motivating the best of the best. Retiring Baby Boomers: Given the fact that we know we will have less people to replace those that are leaving, retiring partners might be a bit discouraged about their ability to leave the firm when they had planned to. We simply must start thinking in a new way about mandatory retirement ages, ways to attract younger team members to buy into the ownership track, the amount of time we spend in knowledge transfer and the expectations we have of our new leadership team. All of these old rules and mindsets must change as we move to the next generation of leadership and management in our firms. Decline in Employees’ Retirement Savings: The recession hurt our country and our profession and one area that is not recovering as fast as we had hoped it would is employee retirement savings contributions. While some firm leaders would say “that is their problem, we give them the opportunity and it is up to them to take advantage of it,” I contend that as leaders we need to insure that we are educating and encouraging our team in the management and necessity of their future retirement planning. This is a great area to collaborate with an outside vendor to work with your firm. Asking an outside financial planning professional to meet with team members can be extremely valuable to the firm and the individual. Threat of Another Recession: When you are clobbered once it is hard to trust that everything will be ok in the future. The experts agree that we are recovering slowly. The experts do not agree as to the likelihood of another recession. The challenge is to not let your firm leaders get
into a position of being scared. Scared says that you are in the position of retreat or standing still. You must continue to push forward, improve and strengthen your firm. Be courageous! Greater Demand for Life and Work Balance: The conversation around life and work balance was once thought to be a passing fad. Today we know that this is not just a “next gen” issue. This is an “about everyone” issue. Everyone is searching for more balance including a career that they are passionate about as well as a personal life that is fulfilling. Firms have to continue their quest to develop accountability at work which includes setting professional goals that will help each individual accomplish the life they want, but will almost never look the same as the next person that walks through the door. That is where the challenge comes. We must have a system in place that allows for flexibility that will connect the needs of the firm with the goals of the individual. As I stated earlier, now is the time to act as leaders and be courageous. Use the trends above to develop strategies that will enable your firm to navigate the talent trends of 2013 and end the year in a positive way. CPA IN Perspective
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CPA Management Essentials Take Your Game to the Next Level – Get a Coach By Gary Adamson, CPA Adamson Advisory
What do you think of when you hear the word “coach?” For most of us it brings up thoughts of athletics and someone who has coached a team that we have been a part of or maybe one that we follow as a fan. If you had the opportunity to play on a winning team and work with a great coach, especially in your younger years, you won’t forget it. That individual was likely a positive influence in your life who you will always remember. You’ll find several definitions of coach or coaching in the dictionary but here is what
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a good coach really does: They help you to perform at a higher level than you can achieve on your own. And, how do they do it? They do it by using a very personalized combination of support, encouragement, teaching and discipline. Again, think about that great coach in your past. They pushed you, they were tough on you, they expected a lot out of you, they disciplined you when you needed it; and, at the same time, you learned a lot from them, they were there for you and when you excelled they were your biggest cheerleader. Most of us think of coaches in the con-
text of team sports. But, there are also many athletes who compete individually rather than as part of a team. The high achievers still have one thing in common — a personal coach to push them to their potential. A great example is the relationship that existed for many years between Tiger Woods and his golf coach, Hank Haney. We just respond to an outside influence much better than trying to do it on our own, especially when that person is able to establish the right connection with us. Given what we already know about coaching, it would seem logical that we could also
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expect a similar experience in the business world. Wouldn’t it be great to work with someone who provided that combination of support, encouragement and discipline; someone who really cared about our success and performance? Unfortunately, that is probably the exception rather than the rule. It is particularly true in CPA firms filled with very technically competent people who, for the most part, would rather not have to supervise and deal with people at all. We all have worked with bosses, supervisors, managers, buddies, if we’re lucky mentors, but rarely do we have an opportunity to work with a coach. Leaders in CPA firms are prime candidates for a coaching process. Does this sound like you? You are busy taking care of your clients, working hard and meeting deadlines. You don’t get a lot of direction or guidance from the firm but that’s okay. You either don’t have any personal goals or if you do they only see daylight once a year. No one is pushing you and things are going pretty well (as far as you know). Life is good. What we have just described is most partners and leaders in CPA firms. It is important at this juncture to make the point that there is absolutely nothing fatal about this. Firm’s and partners cruise along, almost on auto pilot, and they survive. But here are the tough questions that we need to answer: Is survival going to be enough especially given the recession that we are emerging from? Are you maximizing your potential? Are you even playing the right position on the team? Is the team taking full advantage of your skills and helping you develop them? Why shouldn’t we focus on making our best players even better? If you agree that a coaching process would make a difference in your firm, where do you start? How do you create the coaching environment? Here are a few tips: Find your coach. What are the qualities of the best coaches you have come in contact with and what do you remember most about them? You know it when you see it. The reality is that it takes a special person who combines those traits that we talked about earlier and who want to do it. There may not be a lot of great candidates, if
But here are the tough questions that we need to answer: Is survival going to be enough especially given the recession that we are emerging from? Are you maximizing your potential? Are you even playing the right position on the team? Is the team taking full advantage of your skills and helping you develop them? Why shouldn’t we focus on making our best players even better? any, in your firm. Perhaps it is your managing partner. But, often that person doesn’t have the right skill set. Your coach probably won’t be your direct supervisor and it doesn’t have to be someone you work with closely with each day. Don’t be afraid to go outside the firm to find the right person — that may be your best choice. Define the goals. First, do you know what the overall firm goals are for the year? What are your personal goals? Is there alignment? How can you make the best contribution to the overall success of the firm? If either firm or personal goals don’t exist, you need to start there and create them. What are your strengths that, with some coaching, you can take to the next level? Follow the KISS (keep it simple) approach. That means don’t have more than two or three goals to work on with your coach at one time. Start at the top. One of the most important roles in every firm is the managing partner. Who coaches him or her? The answer in most firms is no one. It is even more critical if they are relatively new to the job. Start here — get your managing partner hooked up with a coach. This one, to be most effective, should be outside the firm. Be disciplined. Decide the frequency of the coaching sessions, get them on the calendar and stick with it. Make them sacred time. My advice is that they should be either once a month or at the outside every six weeks. Bimonthly or quarterly is not enough. The whole point of coaching is to have an active, current dialogue that will help you work through issues, stretch for goals and be held
Coaching for you and yor firm leadership may be just what the doctor ordered in this tough economy. It really is foundation work for your firm that you can use to improve performance. Individual incremental improvement will add up to significant improvement for your firm.
accountable. If done well it is a disciplined process that you will use to help you find focus and improve your game. Use these key words to guide you. I suggest that you keep these words in front of you (seriously, write them down on something) and that you use them to help guide you through the process. Give them to your coach. Your relationship with your coach will span all of these. Take advantage of them. • Focus • Stretching • Ideas • Confidant • Safety net • Alternatives • Priorities • Potential • Accountability • Mentoring • Discipline I was fortunate to have the opportunity to work with two different coaches during my tenure as the managing partner in a CPA firm. I learned a lot about myself and there is no question that I achieved more for me and for the firm as a result of the process. Coaching for you and yor firm leadership may be just what the doctor ordered in this tough economy. It really is foundation work for your firm that you can use to improve performance. Individual incremental improvement will add up to significant improvement for your firm. A quote from the great Vince Lombardi sums it up: “Perfection is not attainable, but if we chase perfection we can catch excellence.” About the author: Gary Adamson is the president of Adamson Advisory, specializing in practice management consulting for CPA firms. He is an Indiana University graduate and has extensive hands on experience as the recent managing partner of a top 200 CPA firm. He can be reached at (765)488-0691 or gadamson@adamsonadvisory. com. For more about Adamson Advisory, visit adamsonadvisory.com. CPA IN Perspective
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Validate How You Market Your Services with Google Trends By Roy Keely Xcentric
A silver bullet marketing idea is a farce. There is always more behind the scenes of any successful marketing campaign than a mere “idea.” In addition, success of a campaign depends largely on your firm’s makeup, goals and demographics and cannot be reduced to one single initiative. It takes hitting on all cylinders to really make a difference from one year to the next. A favorite marketing quote that I tend to come back to is “small hinges swing big doors.” The small hinge in this example is speaking the language of your target market across all mediums. This includes websites, presentations, mail pieces, etc. It’s not easy to drill down the language at large, but it’s made easier given the technology tools, like Google Trends, now available at our fingertips. Many of us marketers go off of our “gut” which can get us in trouble as many times as it can aid us. Google Trends allows us to test our “gut” with TONS of data (catchy terms these days is “Big Data”) that is free and readily available. Here is a fresh example of how to use Google Trends if you are thinking about refreshing your website or other marketing campaigns:
Real-Life Example: You are starting a blog or section on your website whereby you hope to give advice to your personal tax clients. You plan to notify them via email and mail regarding this new section in order to get traction on the site quicker than pure organic growth. Question: What wording should you use to reflect the language used in the market at large? Is using “tax advice” better than “tax strategy” or “tax help?” What about “tax tips?” Solution: Use Google Trends to see how people pair the word “tax” with what they are searching for: advice, strategy, help or tips. Here are a few Google Trends analysis tips: • Make sure you narrow your search to where your client base is (example: USA). Otherwise, Google Trends will analyze the entire World Wide Web, which could skew your results. You can even narrow down to a region or state.
• Keep in mind that the Google Trends analysis is reflective of all searches, not necessarily your target market. This is more relevant of an exercise for a tax shop focused on individuals of all kinds versus the shop that goes after SEC audits. Either way, the results can still provide you with helpful data. In the real-life example, Google Trends shows that your clientele want “help” more than “advice” or “strategy.” You can then take that information and start using the word “help” across all mediums vs. some of these other terms, since it is striking more of a chord with your audience. Roy Keely is the VP of market strategy at Xcentric and is charged with articulating Xcentric’s value proposition to the accounting community. He can be reached at email@example.com or (678) 297-0066 ext. 525.
A favorite marketing quote that I tend to come back to is “small hinges swing big doors.” The small hinge in this example is speaking the language of your target market across all mediums. This includes websites, presentations, mail pieces, etc. It’s not easy to drill down the language at large, but it’s made easier given the technology tools, like Google Trends, now available at our fingertips. 42
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Published on Aug 13, 2013