New Jersey CPA - March/April 2019

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UNRAVELING THE MYSTERY OF DISTRIBUTED LEDGERS Page 4 WHAT ARE THEY? Page 6 WHAT CAN THEY BE USED FOR? Page 8 HOW ARE THEY AUDITED? Page 10 HOW ARE THEY VALUED?

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contents

THE MAGAZINE OF THE NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS

4 What is a Distributed RALPH ALBERT THOMAS, CPA (DC), CGMA Chief Executive Officer & Executive Director rthomas@njcpa.org ELLEN C. McSHERRY Chief Operating Officer emcsherry@njcpa.org DON MEYER Chief Marketing Officer dmeyer@njcpa.org RACHAEL BELL Managing Editor rbell@njcpa.org KATHLEEN HOFFELDER Content Editor khoffelder@njcpa.org MARC L. REIN Multimedia Specialist mrein@njcpa.org

Ledger in the World of Blockchain?

Ledger Technology in Accounting and Finance

READ NEW JERSEY CPA ONLINE AT NJCPA.ORG/ NEWJERSEYCPA DE SIGN / P RODUCT I ON / ADVERTISIN G THE YGS GROUP 3650 WEST MARKET STREET YORK, PA 17404 Advertising Contact: LAURA GAENZLE ACCOUNT EXECUTIVE 717-430-2351 laura.gaenzle@theygsgroup.com

Members Weigh in on Minimum Wage and Cannabis 12 ACCOUNTING, AUDITING & ATTEST

Accounting for Crypto Assets 13 BECOMING A CPA

Ledgers and Blockchains

Auditing a public blockchain focuses not so much on the process of auditing the blockchain itself, but rather obtaining assurance that the blockchain is working effectively and a third party can independently verify a transaction.

See what it all means for accountants.

10 How to Value

In the future, distributed ledger technology will become the platform for an array of payment, clearing, title transfer and asset tracking functions. Timing differences and the need for repeated account reconciliation will become as antiquated as footing journals and preparing trial balances.

2 CLOSE UP

THE NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS 425 EAGLE ROCK AVENUE SUITE 100, ROSELAND NJ 07068 973-226-4494 | NJCPA.ORG #NJCPAMAG

The accounting industry is being reshaped by the introduction of blockchain — technology that provides for the recording of transactions using complex algorithms and encryption that results in transactions being secure. Find out more.

6 Uses of Distributed

8 Auditing Distributed

Distributed Ledgers

CPAs are well positioned to not only leverage distributed ledger technology themselves, but to assist in the valuation and reporting of these ledger systems.

18 FINANCIAL PLANNING SERVICES

Social Security Retirement Benefits for Married Couples 20 FIRM & PRACTICE MANAGEMENT

Making Partnership More Appealing to Younger Generations

Why it’s Vital to Get the CPA License

22 PROFESSIONAL DEVELOPMENT

14 BUSINESS ADVISORY SERVICES

Balancing Work and Life

Cross Selling: How to Mine Current Clients for More Services 16 CORPORATE ACCOUNTING

How CFOs Can Better Utilize Independent CPAs

23 TAX

New Jersey Sales and Use Tax: A Contractor’s Guide to Reasonable Compliance

24 TECHNOLOGY & INFORMATION MANAGEMENT

Working Remotely is the Future of Accounting 25 NJCPA NEWS

yy New Ovation Awards Announced yy NJCPA Honors 50+ Years of Membership yy Presenters Expand Diversity Outreach 27 CLASSIFIEDS 28 MEMBER STORY

Howard Bookbinder, CPA

CLOSE UP

Members Weigh in on Minimum Wage and Cannabis

BY RALPH ALBERT THOMAS, CPA (DC), CGMA, NJCPA CEO AND EXECUTIVE DIRECTOR

As part of our mission to represent our members’ point of view with the New Jersey Legislature, the NJCPA surveyed members in December about raising the minimum wage in New Jersey and in January about the legalization and taxation of marijuana.

MULLING MINIMUM WAGE More than 55 percent of the 1,204 survey respondents agreed with raising the state’s minimum wage from $8.85 but not to $15 an hour as was subsequently signed into law by Governor Murphy in February. Even with the hike to $15 an hour being phased in over a period of years, 63 percent of those surveyed said it would hurt the state’s economy.

However, the majority of those surveyed supported a minimum wage hike even without exemptions for seasonal or teenage workers. Nearly 50 percent of respondents said such exemptions would not impact their opinion.

Members noted that the state’s minimum wage is designed for entry-level workers and should not be a living wage to support a family. Raising the minimum wage, they added, will have an inflationary impact, causing ripple effects which will impact consumers and ultimately drive businesses out of New Jersey, said respondents.

CONTEMPLATING CANNABIS In the cannabis survey, 38 percent of the 1,071 respondents said they were strongly opposed to completely legalizing the possession and personal use of marijuana in New Jersey, while 33 percent said they

strongly supported the idea. Of those that support the idea, more than 40 percent said there should be a 12-percent tax on adult-use marijuana sales, not a 25-percent tax as Governor Murphy proposed, while more than 30 percent supported having a tax in between 12 and 25 percent. New Jersey Senate President Stephen Sweeney favors a 12-percent tax.

Respondents strongly believed the legalization would help the state’s economy with 48 percent in agreement, while 22 percent said it would have no impact and 20 percent said it would hurt New Jersey’s economy.

Member concerns over the legalization of adult-use marijuana stemmed from driving and working under the influence to believing that more vehicle accidents would occur, thus raising the cost of insurance. Members also felt the legalization could lead to more drug use as marijuana is often considered

a “gateway” drug, though it could also reduce some of the current illegal drug trafficking.

Members have expressed that some of their clients are anxiously awaiting news of the bill’s passage to start business ventures in this industry.

At the NJCPA, we support our members and encourage good communication. Our surveys are a great way to express an opinion and take a stand on an issue.

Remember, without participating, we can’t relay the right message to Trenton. We would like to thank current participants in our surveys and encourage everyone to make your voice heard.

READ MORE MINIMUM WAGE njcpa.org/advocacy/minimumwage CANNABIS njcpa.org/topics/cannabis

New Jersey CPA (ISSN 1534-6692) is published six times per year by the New Jersey Society of Certified Public Accountants, 425 Eagle Rock Avenue, Suite 100, Roseland, NJ 07068. Issue No. 74 Copyright © 2019 New Jersey Society of Certified Public Accountants. Annual membership dues include $9 for a one-year subscription to New Jersey CPA magazine. Members may not deduct subscription price from dues.

Periodicals postage paid at Roseland, NJ, and at additional mailing office. POSTMASTER: Send address changes to New Jersey CPA, 425 Eagle Rock Avenue, Suite 100, Roseland, NJ 07068-1723.

The materials and information contained within New Jersey CPA are offered as information only and not as practice, financial, accounting, legal or other professional advice. The opinions expressed herein are those of the authors and not necessarily those of the New Jersey Society of CPAs. Publication of an advertisement in New Jersey CPA does not constitute an endorsement of the product or service by the New Jersey Society of CPAs.

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MARCH/APRIL 2019 | NEW JERSEY CPA

PROFESSIONAL ISSUES UPDATES IMPACTING CPAs AND FINANCIAL PROFESSIONALS Hear a panel of public policy experts discuss New Jersey’s proposed budget for 2019/20 and its potential impact and political viability.

THURSDAY, MARCH 21, 2-3 P.M. / WEDNESDAY, MARCH 27, 12-1 P.M. (REPLAY) MONDAY, APRIL 1, 12-1 P.M. (REPLAY)

Register for this free event at njcpa.org/issueswatch

Hear the latest legislative developments impacting CPAs and the business community.

Listen in bi-weekly.

Subscribe now. Go to njcpa.org/podcast to learn more.

WHAT IS A DISTRIBUTED LEDGER IN THE WORLD OF BLOCKCHAIN?

By ALBERT TRAVERSO, CPA

SAX LLP

It is quite clear that blockchain will greatly impact the accounting profession. The financial services industry will be significantly altered by this new technology as current business models for processing transactions will change with the use of blockchain. Just how significant and how soon CPAs will begin feeling the impact remains to be seen.

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Blockchain is a network that provides for the recording of transactions using complex algorithms and encryption that results in transactions being secure, irrevocable and available to everyone who would want or need to know about the transaction.

Blockchain has the potential to impact audit engagements by rendering traditional audit tests redundant and unnecessary. Inherent self-checking safeguards that are built into blockchain address several assertions at the account balance and transaction level that traditional audit techniques would otherwise address in an audit engagement (existence, occurrence, and rights and obligation to name a few). However, it will also open new opportunities where accountants and firms can find value.

BLOCKCHAIN V. BITCOIN In 2009, the digital cryptocurrency Bitcoin was launched. While Bitcoin and blockchain are often mentioned together, it is important to make a key distinction between the two. Bitcoin is not synonymous with blockchain. Bitcoin is a currency, and blockchain is the technology that supports the bitcoin network. It may help to think of blockchain as an operating system like Microsoft Windows and Bitcoin as an application that runs within the operating system environment. Bitcoin is just one of the first applications that uses the blockchain technology. Since blockchain facilitates the process of recording financial transactions and tracking financial assets, virtually anything of value that is tangible (real estate, a car or cash) or intangible (intellectual property, patents or copyrights)

can be tracked and traded on a blockchain network. Bitcoin is just one example of how assets with value are exchanged.

Blockchain enables companies to create an environment (a blockchain network), where transactions are recorded, stored and can be viewed by everyone with access to the network. On a blockchain network, transactional information is shared and/or distributed across the entire network to all users. Instead of each party to a transaction maintaining their own database of transactions, blockchain network users share the same data. Each network user has an identical copy of the transaction, which eliminates the need for reconciliation between parties that transact with each other.

Since blockchain deals primarily with the transfer of ownership of assets and maintains a ledger of accurate financial information, it will indeed be leveraged by the accounting profession when it comes to the measurement, communication and analysis of financial information. With that, blockchain will lead to more and more transactional-level accounting being done by technology and not physical accountants, but there is still much for accountants to do. For instance, an asset’s ownership might be verifiable by blockchain records, but its condition, location and true worth will still need to be assured.

WHAT IS A DISTRIBUTED LEDGER? This sharing of data is where the term “distributed ledger” comes from. A distributed ledger is a blockchain-enabled network.

For each transaction posted to a blockchain network, all participants’ records are updated

individuals transact with one another moving forward.

and shared through peer-to-peer replication.

Each transaction is the start of a “block” of data. Blocks include a record that confirms the time and sequence of transactions which are encoded within the blockchain using a “hash” or unique identifier. That data is copied and shared with all users. As updates to transactions are made, each addition adds a block of data with its own hash identifier which forms a chain of data linked by those hash codes. Hence the term “blockchain.”

Each participant of a blockchain network is referred to as a “node.” Nodes support the network by maintaining a copy of a transaction. Nodes are the individual parts of the larger structure that is the blockchain network. Each node in the blockchain network can publish or send transactions to other nodes, and the data is replicated and synchronized across the network as it is transferred.

To better illustrate how blockchain works, let’s take a look at this example: Imagine you and your friend, Joe, are on stage at an auditorium and there are 1,000 people in the audience. While on stage, for all to see and hear, you give Joe the key to your motorcycle and Joe gives you a key to

his jet ski. You declare, “Joe, you now own my motorcycle.” Joe declares back to you, “You now own my jet ski.”

There are 1,000 witnesses who can confirm that your motorcycle now belongs to Joe, and Joe’s jet ski now belongs to you. If anyone at a later date tells a conflicting account of what happened, there are 999 other people who will counter that one claim. Additionally, if you take a spare key to your motorcycle and try to give it to someone else, there are 1,000 audience members who can confirm that Joe now owns the motorcycle since each of them “witnessed” the transaction. This is essentially how the blockchain technology works, and it is built on transparency.

Now, take the above example and add on network access permissions, cryptography technology and a larger population of peers or nodes on a given network, and you can see how blockchain technology is more secure than traditional networks. It is this increased level of trust and security over transactions that makes blockchain a technology that will greatly change how companies and

THE POSITIVE SIDE TO CHANGE Some fear that blockchain could replace accountants in the future. More realistically, blockchain has the potential to enhance the accounting profession by reducing the costs of maintaining and reconciling ledgers and freeing up resources to concentrate on planning and other high-value services. Blockchain can also provide accountants with clarity over ownership of assets and existence of obligations and could dramatically improve efficiency.

There is no doubt that the accounting industry will be reshaped by the introduction of blockchain technology, and there does not seem to be a way we can slow down the train of change coming our way.

As accountants, we must embrace and keep on top of this change. We must adapt and evolve as the times continue to shift to more technology-based solutions so that we can continue to identify the best ways to serve our clients and provide them with the most value possible.

Albert Traverso, CPA, is a partner at Sax LLP and is a firm leader in the area of computerized audit techniques, working to streamline the entire audit process. He can be reached at atraverso@saxllp.com.

LEARN MORE APRIL 25, SECAUCUS BLOCKCHAIN/RISK ASSESSMENT

APRIL 26, BERLIN BLOCKCHAIN TECHNOLOGY

MAY 9, PATERSON BITCOIN/BLOCKCHAIN Register at njcpa.org/events

READ MORE DISTRIBUTED LEDGER ARTICLES AND RESOURCES njcpa.org/topics/blockchain

DO MORE JOIN THE EMERGING TECHNOLOGIES INTEREST GROUP njcpa.org/groups

NEW JERSEY CPA | MARCH/APRIL 2019

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USES OF DISTRIBUTED LEDGER TECHNOLOGY IN ACCOUNTING AND FINANCE

By MARC D. MINTZ, CPA

MARC MINTZ & ASSOCIATES, LLC

In the future, accounts will be settled utilizing blockchain technology.

Easier understood by CPAs through its equivalent name, distributed ledger technology (DLT) will become the platform for an array of payment, clearing, title transfer and asset tracking functions in the 21st century.

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Simplistically stated, a block is comparable to a single transaction. The “chain” memorializes a ledger from its first transaction — the genesis block — to its balance as of the latest transaction. The term “distributed” describes the breakthrough element that provides complete transparency as all interested parties share a single ledger in real time. Each party’s side of the transaction is posted to a commonly accessible source.

Timing differences and the need for repeated account reconciliation will become as antiquated as footing journals and preparing trial balances.

Bitcoin was the first application developed using DLT. Cryptocurrency was the industry created, which, as of this writing, included more than 1,600 unique digital currencies. It is fundamental to understand that DLT is a general-purpose technology.

It will permeate the evolving digital economy and affect every industry in multiple and unique ways. Like other general-purpose technologies — the wheel, electricity, computers and the Internet — DLT is generic with multiple uses. To begin, blockchain applications will run parallel with current systems. As development and acceptance continues, blockchain will

entirely replace these same legacy systems. Finally, as blockchain matures and becomes widely adopted, it will disrupt business processes, and entire financial systems will be grounded on this currently emerging technology. This will have profound effects on the theory and practice of accounting and finance.

If you’re seasoned enough to have practiced accounting in 1980, a legitimate question was “What can a personal computer do for me?” Then the CPA’s killer app, the spreadsheet, came of age, and the computer became indispensable. During the turn of the millennium and the dotcom bust, a similar question was posed, “What can the Internet do for me?” Then every business person’s killer app, email, came of age, and access to the Internet became indispensable. Less than 10 years ago, the “cloud” was a relative mystery and again financial professionals begged the question, “What is the relevance of being continuously tethered to the Internet?”

Then humanity’s killer app, the smart phone, was introduced and we now rely upon the cloud for real-time access to track, manage and react to every facet of both our personal and professional lives.

Bill Gates is quoted saying, “we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.

Don’t let yourself be lulled into inaction.”

With those insightful words, let’s delve into the implications that DLT might hold for CPAs and finance professionals as we wait for blockchain’s killer app(s) to unfold.

FINANCIAL ACTIVITIES AND SYSTEMS AFFECTED In essence, a distributed ledger is a generic platform technology upon which automated and integrated settlement processing systems are developed. Transactions are posted in real time, more securely and at a fraction of the cost currently extracted by third-party intermediaries. While the current emphasis on cryptocurrency is focused on public networks which are accessible by anyone, it is likely that future inroads will focus on private networks only accessible to designated and authenticated users. While this concept may seem vague, viewing deficiencies in existing financial transaction processing systems may shed light on the solutions to be developed.

Currently the settlement process for trading equities spans several days. Participation by multiple intermediaries including trading exchanges, clearinghouses and regulatory authorities requires that cash, stock certificates and fees be transacted and settled separately. Utilization of DLT holds the promise to reduce settlement times from days to minutes while simultaneously reducing errors and minimizing cost. Since the distributed ledger is transparent to all parties involved, and could be integrated between multiple systems, the need for reconciliations and audits would dramatically be reduced.

Accounts payable and associated treasury functions are also predisposed for dramatic change as DLT melds the transfer of title to assets with the associated assignment of liability between counter parties. Time lags, omissions and ambiguity will be minimized as Electronic Data Interchange (EDI) and other automated applications incorporate integrated digital forms as the already antiquated scheme of paper bills of lading, delivery tickets, invoices and checks all become part a consensus-driven digital ledger. Beyond the benefits of increased security,

accuracy and timeliness, enormous transaction costs will be saved as settlement processing becomes more pedestrian.

Distributed ledger technology will significantly change the manner in which traditional audits are conducted. Instead of waiting for year end and reviewing transactions from the source (bottom) to their effect on the financial statements, transactions will be audited in real time and anomalies revealed and addressed before the books are closed. Sample-based substantive testing will give way to the electronic review of entire populations of activity. New auditing engagements for the assurance of IT systems and risk management mitigation will begin to replace the labor-intensive process of cross referencing and documenting transactions after the fact. Additional techniques will be deployed including tracking high-value assets via third-party systems utilizing the Internet of Things (IoT) and applying data analytics to real-time streams of the transactions under review.

Like general-purpose technologies of the past, the evolution of DLT will gradually be weaved into the fabric of our financial systems, the economy and our lives in general. However, it will only be in retrospect that we recognize that this transformation occurred.

Marc D. Mintz, CPA, CITP, CGMA, is the managing member of Marc Mintz & Associates, LLC, a technology consulting firm that assists businesses with strategic planning and the selection and implementation of information technology systems. He is a former NJCPA Trustee and past president of the Passaic County Chapter. He can be reached at marc@marcmintz.com or 973-808-9040.

READ MORE BLOCKCHAIN TECHNOLOGY AND THE FUTURE OF AUDIT aicpa.org

BLOCKCHAIN AND THE FUTURE OF ACCOUNTANCY icaew.com

2018 GLOBAL BLOCKCHAIN SURVEY deloitte.com

NEW JERSEY CPA | MARCH/APRIL 2019

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AUDITING DISTRIBUTED LEDGERS AND BLOCKCHAINS

By MARK ECKERLE, CPA

WITHUMSMITH+BROWN, PC

The auditing landscape has remained relatively unchanged over the past few decades with similar procedures being used to gain assurance that the financial statements are free of material misstatement.

But distributed ledger technology offers a significant opportunity to increase efficiency in the auditing process.

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A distributed ledger, or distributed ledger technology, is often referred to as blockchain technology. It is a consensus of replicated, shared and synchronized digital data, which is geographically spread across multiple sites, countries or institutions with no administrator or centralized data storage. A distributed ledger is essentially an immutable database maintained among a set of nodes or computing devices.

Blockchains are one form of distributed ledger technology and are distributed across and managed by peer-to-peer networks. The major difference between most other distributed ledgers and a blockchain is that other distributed ledgers do not usually employ a chain of blocks to provide a securely distributed consensus.

Distributed ledgers have taken central stage in technology innovation in the business world as this technology can disrupt current best practices. Utilizing distributed ledgers and blockchains within accounting, specifically auditing, can improve audit efficiency and audit quality.

Major accounting firms are devoting significant resources to blockchain development by establishing research labs; however, the full extent to which blockchain and distributed ledger technology will impact the auditing industry remains uncertain.

PUBLIC V. PRIVATE BLOCKCHAINS There are two types of blockchain technology: public blockchains and private, or permissioned, blockchains. The main distinction between the two is related to who is allowed to participate within the network and maintain the shared ledger.

A public blockchain network is an open-source software program where anyone can join and participate. This type of network, or protocol, typically has a built-in incentive mechanism to encourage network participants to join and use the

network. An example of a current public blockchain is the Bitcoin blockchain, which is publicly accessible and can be used by any participant to transact with Bitcoin.

A private blockchain network requires an invitation and must be validated by either the creator of the network or by a programmed set of rules that are built into the network by its creator. A private blockchain typically will have a permissioned network which places restrictions on its participants and the types of transactions. Records on a private blockchain are synchronized on all of the nodes to ensure immutability.

Privately distributed ledgers offer more privacy, energy-efficiency and scalability as the network sizes are generally smaller than publicly distributed ledgers. An example of a private blockchain in production today is J.P. Morgan’s quorum.

In order for distributed ledger technology to provide audit efficiency and audit quality, accountants must understand how to use and audit the technology. Auditing distributed ledger technology will vary depending on whether it is a public or private network.

AUDITING A PUBLIC BLOCKCHAIN Auditing a public blockchain focuses not so much on the process of auditing the blockchain itself, but rather obtaining assurance that the blockchain is working effectively and a third party can independently verify a transaction. The Bitcoin blockchain, for example, offers three key technological characteristics to assist in the auditability of the public blockchain: a fault-tolerant system, digital timestamping and a currency ledger using cryptographic primitives.

A fault-tolerant system, when applied to the Bitcoin blockchain, is the process of building blocks by independent miners. If there are any attempts at malicious behavior or attacks on the system, a miner can identify and halt the process. Miners verify

transactions on the Bitcoin blockchain and are chosen at random. Currently, the exact number of miners on the network is unknown, but estimates have reached as high as 100,000 miners, according to the news source Brave New Coin. These miners can halt and report a transaction in order to prevent it from being completed. The process of building blocks on the Bitcoin blockchain is that once a group of transactions has been mined, they are grouped together into a single block and presented to the blockchain for authentication to be added to the chain of blocks, hence the name blockchain.

Digital timestamping is a core feature to external users and provides critical accountability through reliably verifying that the service operates in the intended way.

This feature is a technique which leaves a digital fingerprint of the original data in the correct order within the blocks when added to the blockchain.

A currency ledger using cryptography is the most notable feature of the Bitcoin blockchain. When a transfer of Bitcoin occurs, it is publicly posted onto the blockchain for full transparency. This feature offers a use case for the blockchain for its users to transact upon it. Utilizing the first two features in conjunction with the third provides the key characteristics and

functionality of the Bitcoin blockchain.

These three features offer accountability and third-party verification from an independent source.

AUDITING A PRIVATE BLOCKCHAIN Auditing a private blockchain involves creating an audit plan similar to that of an information technology audit, or information systems audit, where the infrastructure of the technology system is evaluated to accurately reflect the blockchain’s internal controls and effectiveness. Installing and maintaining effective controls is critical for an information technology.

An audit of an internal database or blockchain ensures that the appropriate controls are in place as well as tests the system’s functionality, specifically endto-end. This involves performance testing on both the system’s inputs and outputs.

Generally, an auditor would create a sample transaction to test the entire process.

Auditors may also create “test” transactions, or fake transactions, in order to review and verify the controls in real-time.

BENEFITS FOR AUDITORS The technological benefits of utilizing a distributed ledger, whether public or private, in the auditing process include:

yy Decentralization — the peer-to-peer design of blockchain eliminates the use of a trusted central third party yy Encryption — preservation of client privacy through encrypted communication yy Immutability — virtually fraud-proof database of information

Auditing has a unique need for distributed ledgers and blockchain technology distinct from other industries since this new technology can greatly increase audit efficiency. Is it important for accounting firms that efficiency is managed to help with audit pricing, the number of clients managed and overall customer satisfaction. An audit can be extremely meticulous, with auditors obtaining supporting documentation to verify transactions. Audit teams will need to adapt to utilize this new technology in an effective manner. With the current technological disruption that distributed ledgers and blockchain have to offer, this could drastically change the future auditing landscape.

Mark Eckerle, CPA, is supervisor at WithumSmith+Brown, PC. He is a member of the NJCPA Emerging Leaders, Cannabis, Accounting & Auditing Standards and Emerging Technologies interest groups. He can be reached at meckerle@withum.com.

NEW JERSEY CPA | MARCH/APRIL 2019

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HOW TO VALUE DISTRIBUTED LEDGERS

By DR. SEAN STEIN SMITH, CPA

LEHMAN COLLEGE

The distributed ledger and blockchain boom has changed what CPAs need to know. CPAs are well positioned to not only leverage distributed ledger technology themselves, but to also assist in the valuation and reporting of these ledger systems.

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While cryptocurrencies likely led the interest in and development of the broader blockchain environment, the practitioner conversation has shifted more toward the underlying technology itself. No matter where an organization or its clients are located, blockchain choices and options continue to play a prominent role in professional conversations. While blockchain itself, and the distributed ledger technology that drives blockchain functionality, can be presented as if they are equivalent, that is an incomplete view. Prior to a deep dive into different blockchain models, and a discussion of valuation considerations for distributed ledgers, it seems appropriate to differentiate between blockchain and distributed ledger technology.

DISTRIBUTED LEDGER V. BLOCKCHAIN Blockchain may receive the buzz and recent inflows of investment dollars, but the underlying distributed ledger technology (DLT) is not necessarily a new development. Put simply, a distributed ledger is a database that exists across multiple platforms or among multiple network

participants. As opposed to a centralized database structure, which creates a single point of failure and target for hacking attempts, a distributed ledger spreads the risk, liability and responsibility for data integrity across network members. Blockchain represents a unique interpretation of a distributed ledger system via the blocks of transactional information that, in turn, form the blockchain. Additionally, the options in terms of data encryption — including the currently unhackable Proof of Work protocol on the bitcoin blockchain — differentiate blockchain from other distributed ledgers. Put simply, blockchain is a version of DLT that places security and encryption at the core of the entire ecosystem versus treating it simply as an add-on or patch to be added at a later stage.

As practitioners are seeking to obtain a better handle on how to value and implement blockchains, it’s important to understand the two types of blockchains.

PUBLIC BLOCKCHAINS The idea of a public blockchain is the closest to the completely decentralized and distributed ledger that lies at the core

spreads risk between members — which is a positive — but also can lead to liability being spread across different entities.

That said, this type of sector-specific or industry-standard model does seem appealing due to the cost reductions, information sharing and increased transparency. In 2019 and beyond, it would seem logical to expect more consortium-based blockchains to emerge.

of the blockchain ecosystem. Current market examples of public blockchains include the bitcoin blockchain and the ethereum blockchain, which are maintained by a core group of programmers but are free for anyone to search and/or join. From an enterprise perspective, however, these types of models might not be as appropriate as other models outlined below. The reasons why these options might not work as effectively include the lack of testing ability on a public blockchain before going live with an application, contending with proof-of-work consensus validation — which is energy and power intensive — and the concerns that public models are too closely affiliated with volatile cryptocurrencies.

PRIVATE BLOCKCHAINS Contrasted with the decentralized and distributed system such as those utilized by bitcoin and ethereum, a private blockchain seems closer to a traditional enterprise database than a decentralized and distributed ledger. Implemented by several large organizations, a private blockchain model has achieved success and adoption in various areas of the

marketplace. In essence, a private blockchain or DLT allows for greater efficiencies and cost savings to be achieved, since the consensus-based model of approval necessary for data to be validated is not usually as energy intensive as the proof-of-work model employed by public blockchain options.

While the greater transparency and identification of network members may reduce some of the anonymity prized by initial blockchain adopters, the enterprise applications of such a distributed ledger model are clear. Returning to the marketplace, the blockchain implemented by Walmart is a private blockchain model.

CONSORTIUM MODEL A consortium model of blockchain seems to be the most applicable for industry- or sector-specific blockchain applications, including a joint venture underway between the Big 4 and a group of approximately 20 Taiwanese banks.

In essence, a consortium is a blockchain model that is jointly owned, operated and maintained by a number of organizations. Such a distributed ledger model

VALUING DISTRIBUTED LEDGERS Establishing and reporting the value of a distributed ledger is, of course, important from both an accounting and organizational perspective, but the value of the ledger appears to be driven by two factors. First, the type of distributed ledger certainly makes a difference, and, as outlined above, there are several different types and iterations available for organizations. Second, and arguably more important, is the assets stored on the ledger. Contrasted against traditional ledgers or information technology systems, blockchains themselves often form a significant portion of the value attributed to a project or initiative using this tool. In addition to the often-significant costs associated with implementing and maintaining a blockchain or other form of robust distributed ledger, the intersection between the blockchain and the data stored on that blockchain raises an interesting point.

Put simply, the security and encryption are core to the value of both the technology as well as the assets stored therein.

This raises an interesting question that needs to be addressed in more detail: In the case of valuation, how much of the value attributed to a distributed ledger should be attributed to the information or assets stored on the ledger versus the ledger itself ?

Dr. Sean Stein Smith, CPA, DBA, M.S., M.B.A., CMA, CGMA, is an assistant professor at Lehman College. He is a member of the NJCPA Content Advisory Board, Student Programs & Scholarship Committee, Emerging Leaders Council, Nonprofit Interest Group and Accounting & Auditing Standards Interest Group. He can be reached at drseansteinsmith@gmail.com.

NEW JERSEY CPA | MARCH/APRIL 2019

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ACCOUNTING, AUDITING & ATTEST

Accounting for Crypto Assets

BY CHRIS DEMAYO, CPA, WITHUMSMITH+BROWN, PC

The holiday season of 2017 arrived with a unique gift for the accounting community: cryptocurrency (aka, digital currency or digital assets).

Digital currencies have been around since 2008 with the advent of Bitcoin as a peer-to-peer payment system built upon blockchain technology. But Bitcoin and other decentralized currencies came onto the scene in explosive fashion when the values of some major cryptocurrencies increased more than 1,000 percent seemingly overnight.

As a result, cryptocurrency as a concept was thrust into the public lexicon, and, as expected, speculative investment as well as new business models incorporating cryptocurrencies blossomed. While the frenzy fizzled in 2018, the pricing surge put an entirely new chapter of accounting issues into the spotlight.

Accounting for cryptocurrencies is certainly unique. It’s hard to pinpoint any good analogies to lean on when thinking through an approach to accounting. The public discourse around cryptocurrencies has largely been around “mainstream” crypto such as Bitcoin.

However, the complexity comes from the fact that cryptocurrencies can take on many forms, such as utility tokens, security tokens, digital assets or digital currencies. This is what makes it somewhat of an accounting chameleon. It can be viewed as inventory, equity, pure currency, investment assets, intangible assets and the like.

While the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) have not taken any formal positions on accounting for digital assets at this time, the accounting community has taken a fascinating approach in coming to their conclusion — a simple process of elimination.

Instead of making a declaration of what cryptocurrency is, many firms have taken steps to simply rule out what they believe it is not.

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PROCESS OF ELIMINATION Cryptocurrencies manage to fail a lot of accounting tests. The obvious starting point is cash. Crypto fails because it is technically not legal tender or backed by any form of government. The next logical step is to look toward classifying it as a financial instrument (carried at fair market value). Crypto fails this test as well as it does not contain any contractual right to receive cash at a future point in time. As we work down the balance sheet, the next stop on the list is inventory. While this seems like a possible place for crypto to land, the problem is it clearly is not a tangible asset — a foundational test that must be passed to be considered inventory or fixed assets.

The analysis leaves us with one place to go: intangible assets wins the day. The only problem is that intangible assets are generally carried at cost and evaluated for impairment (with no opportunity to write up assets if they increase in value).

This leaves accountants with the unsavory conclusion that a highly volatile asset, which has a readily assessable fair value in an open market place, is, at best, frozen in time in the financials.

GUIDELINES ARE NEEDED Currently, the SEC is working through a substantial number of offerings involving cryptocurrency under the new Regulation A and Regulation A+ offering guidelines. While they have signaled that treating digital assets as intangibles subject to impairment is an acceptable and preferred conclusion, they have stopped short of laying down the rule of law — leaving us all thirsty for answers.

While we may currently be settling into an “industry norm,” our conclusions may need revision. When we think about these assets in real terms, they are instruments that are freely transferable and have a readily assessable fair market value. Holders can generally achieve

liquidity by converting them into cash or other cryptocurrencies with marginal effort. Carrying these assets at cost, written down for impairment without any option to write them up to the extent that they grow in value, may be a greater disservice to the reader of a financial statement than the perceived benefit obtained through “conservativism.”

The fact remains that, in one form or another, cryptocurrencies and digital assets are here to stay. It is time for the accounting community to acknowledge that this is the case and draw up a comprehensive set of principles that we can all follow with confidence.

Chris DeMayo, CPA, is a partner with WithumSmith+Brown, PC and practice leader of the firm’s Technology and Emerging Growth Services Group. He is the leader of the NJCPA Emerging Technologies Interest Group. He can be reached at cdemayo@withum.com.

READ MORE DIGITAL CURRENCY ARTICLES AND RESOURCES njcpa.org/topics/digitalcurrency

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BECOMING A CPA

Why it’s Vital to Get the CPA License

BY KARLY CLARK, CPA, CITRIN COOPERMAN & COMPANY, LLP

Individuals interested in an accounting career seem to share the same question: Why is it important to get a CPA license?

Becoming a CPA is a time consuming, costly and overall difficult process. You must pass four Exam sections that are four hours each in a specific timeframe along with fulfilling extensive educational and experience requirements to obtain your license. You must pay approximately $200 for each Exam section, work through numerous multiple-choice and task-based simulation questions, and anxiously wait for results.

So, what are the benefits of working toward this designation? Quite simply, it will help you gain prestige, improve your professional development and enhance your financial prospects. Here is what can be gained: yy Respect from colleagues. Passing the CPA Exam requires perseverance and knowledge. According to exam results published by the AICPA in 2018, approximately 50 percent of candidates did not pass. Fellow colleagues have congratulated me for passing the Exam, and those who have taken it have commented on how rigorous the process is. CPA licensure proves to your employer you are motivated to advance your career. yy Respect from clients. Clients feel more comfortable paying a professional for a service that is certified rather than not.

The designation serves as reassurance that the individual is competent and ethical. This does not mean individuals without a CPA are less capable, but from a client’s perspective, when choosing between two accountants of the same experience, education and price, one accountant having a CPA designation may influence the choice. yy Enhanced skills. The CPA Exam is designed to test an individual’s ability to not only remember and understand concepts, but also to apply, analyze and evaluate. Mastery of these skills can be directly applied to the daily tasks of an accountant. On numerous occasions, I

have found myself thinking, “I learned this when studying for the CPA Exam!” yy Better time management. The CPA Exam requires time management skills.

For one, you must pass all four sections within 18 months with a minimum score of 75. Because of these requirements and restrictions, time management is key, especially for those working full time. I was used to cramming for my exams in college, but the CPA Exam has trained me to plan ahead and better manage the time I have outside of work and personal obligations. Moreover, you are allotted only four hours to complete the various multiple-choice questions and task-based simulations (along with the written communications for BEC).

Colleagues have told me how the Exam helped them understand how much time should be spent on a problem and they have been able to apply that thought process to tasks at work. yy Higher education. To qualify for a New Jersey CPA license, you must obtain a total of 150 semester hours that include 24 semester hours in accounting and 24 semester hours in business, as well as a minimum of a bachelor’s degree from an accredited school (see njcpa.org/ becomeacpa for full details). The requirement to obtain 150 semester hours has encouraged individuals to pursue

graduate degrees, which they may not have done otherwise. I have colleagues who chose to obtain their Masters in Taxation, and they are valued for it in the profession. yy Higher salaries. CPAs are known to make more money than non-CPAs. How much more? The AICPA noted, “According to Robert Half’s 2017 Salary Guide for Accounting and Finance, professionals with a graduate degree or certifications (like a CPA license) make 5 to 15 percent more.” Additionally, your employer may offer cash bonus incentives and/or reimbursement for Exam-related costs. yy Job opportunities. Job postings for managers and executives typically include the CPA designation as a requirement.

Opting out of pursuing your CPA will restrict you from these opportunities.

It could also limit your ability to be promoted with your current employer.

If you are new to the profession and are on the fence about the CPA designation, you may be limiting your career options.

For those planning a career in the accounting profession, 2019 is the year to pursue your CPA license to invest in your future. You can do it!

Karly Clark, CPA, is a tax supervisor at Citrin Cooperman & Company, LLP. She can be reached at kclark@citrincooperman.com.

NEW JERSEY CPA | MARCH/APRIL 2019

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BUSINESS ADVISORY SERVICES

Cross Selling: How to Mine Current Clients for More Services

BY JASON CULLARI, CPA, CULLARI CARRICO LLC

CPAs must transition from generic accounting and compliance services to advisory services in order to stay relevant.

Cross-selling and offering additional services to current clients is key — not only to bolster the firm’s bottom line but to ensure a proper transition of the practice into the future.

WHAT CLIENTS WANT To appropriately cross-sell services or increase current services, firms must understand clients’ needs and work with them to achieve their goals. Firms can achieve a mutually beneficial advisory service plan by forming real relationships with clients, approaching them at the right time, and accurately communicating how additional or new services will help them achieve their business goals and objectives.

The same trait that makes CPAs the “trusted advisor” makes us able to provide services outside of our traditional parameters. Clients want services and recommendations from someone they trust. But trust doesn’t happen overnight, nor does it happen from behind our desks. The best way to create a trusting relationship is to meet with the client in a setting that doesn’t involve the service you are providing; take them to lunch or invite them to an event without the agenda of accounting and tax. Allow them to relax and have your time without the thought of it being billable.

Be mindful that attempting to crosssell services prior to a solidified relationship will often create skepticism and an adverse relationship which can be difficult to overcome. The level of relationship needed to start cross-selling services is achieved when the client is asking you for referrals or your thoughts on other types of services.

At that point, they have indicated that they trust your judgement and are

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looking for like-minded people to provide services to them.

TIMING IS EVERYTHING Nothing is worse than having the proper relationship with a client and picking the absolute worst time to discuss it. As with most things in life, timing is everything, and it’s no different when selling a client on additional services.

Waiting for the proper time to crosssell or add services depends on many factors. There is typically no bad time to sell core services, which, for example, may derive an intent to save the client taxes because the client expects this from their tax accountant. Ancillary service sales, such as nexus studies, estate planning, external CFO services, wealth management, budgeting, R&D credits, cost segregation studies, and industry comparison and analysis, require a well-placed conversation.

A good approach is to plan numerous client meetings at the beginning of the year and develop conversation points to bring up during those meetings (a means of dropping subtle hints) regarding the additional services. The more times you can mention these subtle hints spread over multiple meetings, the more successful the sell will be when the client asks; because ultimately, at that point, you’re not selling, they’re asking because you gave them the idea all along. However, when they ask, you need to be ready to sell.

BE PREPARED The most common mistake accountants make is that they try to sell without fully understanding the services or the products they are selling. Furthermore, they are quick to bring in another partner or third party to sell the service for them. As discussed above, the relationship and trust is with you, therefore you need to be the one to sell. Spend

the time to understand the additional or third-party service, what the process entails, the client’s level of effort, the pros and cons of the service, and the approximate price range. Practice your pitch ahead of time to sound seasoned on the topic. Confidence and clarity during the initial conversation will set the table for a properly engaged client, resulting in more acceptable expectations and a meaningful delivery of the service to grow one’s business and help the client at the same time.

Jason Cullari, CPA, MBA, PSA, is the managing member of Cullari Carrico, LLC. He is a member of the NJCPA Federal Taxation and Nonprofit interest groups. Jason can be reached at jcullari@cullaricarrico.com.

LEARN MORE MAY 15, WEBINAR COMPETING IN TODAY’S MARKET njcpa.org/events READ MORE BUSINESS ADVISORY SERVICES ARTICLES AND RESOURCES njcpa.org/topics/advisory

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NEW JERSEY CPA | MARCH/APRIL 2019

15

CORPORATE ACCOUNTING

How CFOs Can Better Utilize Independent CPAs

BY PETER RENZULLI, CPA

Many CFOs and their independent CPAs do not have a plan for their relationship beyond the traditional one where the CPA does compliance work for the business and may or may not be called upon for other services.

Fortunately, the relationship can be much more than compliance work. The CFO and the independent CPA should work together to develop a well-thought-out plan for the relationship so the use of the CPA firm’s team is efficient and the CFO’s goals for the organization are met. Having a developed plan will align the goals of both organizations, help both teams develop professionally and increase satisfaction knowing that both the CFO and the CPA are fostering positive growth for both organizations. Here are four key steps in the planning process.

1. BUILD THE TEAM The first step in integrating the relationship is a meeting between key stakeholders,

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including everyone from high-level executives to clerical-level team members from both the organization and the CPA firm. The goal is to create a clear communication channel at the most appropriate levels. Accounting staff should have a contact person to discuss questions with the CPA firm staff in order to better understand reporting issues, journal entries and documentation. The controller should have a contact person at the CPA firm with whom to discuss internal controls, reporting and general quarterly/year-end planning. Finally, the CFO should have contacts at both the senior/manager level as well as at the partner level to discuss all issues, especially taxation, financial reporting and long-term planning. It is common for CPA firms to have a relationship between the CFO and the partner on the account, but most ignore other relationships that are equally important.

What is key is that staff from both the CPA firm and the organization will receive another level of training and development, which will assist in each employee’s job satisfaction, feeling of belonging and skill development.

2. REVIEW PRIOR WORK The second step is for the CFO and the CPA to completely and thoroughly review the prior year’s work papers, with particular focus on several items. These include: yy Reviewing of immaterial items. While they may be immaterial to the financials, they can be very material in designing training and staff development. yy Discussing any difficulties during the audit or review so that systems and procedures can be modified to simplify the process. Do not rely on the management letter, which is a summary of items. Get into the details. Use the

CORPORATE ACCOUNTING

audit or review process to help develop and train the CFO’s staff. yy Having the CPA firm’s staff work directly with the organization’s staff so that both teams get training in working as an integrated team.

This meeting should occur at least annually, with sufficient time dedicated to the subject matter. If done properly, the CFO will be better able to manage the CPA firm’s costs and improve reporting and internal controls. The CPA firm will have a stronger client relationship and a method to further develop staff.

3. INCLUDE THE CPA IN ANNUAL PLANNING The third step is for the CFO to include the CPA firm in the annual planning process.

By keeping the CPA firm and its tax staff up to date about the organization’s annual budgets and plan for the year, they can have input as to the tax effects of the plan.

This input is crucial to creating a model for

maximizing net income and managing capex while minimizing income tax. It will also enable a proactive tax plan to be in place. The CFO will have benchmarks to proactively contact the CPA if any significant changes occur throughout the year. This approach replaces the reactive methods used in many relationships with the CPA and creates a communication flow that includes taxation minimization in the planning process.

4. BE PROACTIVE Finally, start work mid-year on a year-end audit or review. Have the CPA firm’s staff do a partial review during the year so that any compliance or record-keeping issues are addressed early in the year and before they become issues in many transactions. The review or audit should not be reactive at year end but a proactive process to assist in managing the accounting department processes.

By including the CPA as a proactive and integral part of an organization’s accounting function, the CFO will be able to

reduce taxes, maximize revenue, train staff and assist in meeting the strategic goals of the organization they are helping to run.

This article is posthumously published by Peter Renzulli, CPA, president/CFO at PerformAccount and an adjunct professor at Rutgers University. He passed away in December 2018. Peter had been a member of the NJCPA Content Advisory Board since 2016 and served on various NJCPA committees.

LEARN MORE MARCH 21, ROSELAND ANNUAL UPDATE FOR CONTROLLERS

APRIL 18, ROSELAND BUSINESS AND INDUSTRY CONFERENCE

APRIL 24, ROSELAND ADVANCED CONTROLLER AND CFO SKILLS Register at njcpa.org/events

Graduate Programs at Ramapo College

YOUR FUTURE MATTERS Ramapo College offers graduate degree programs designed to prepare you for the next step in your career. Ramapo’s graduate programs combine classroom and online study to allow students to balance their lives and their education.

Ramapo College offers two options for graduate degrees in Accounting that are designed to prepare students not only to qualify for the CPA exam, but also to excel in today’s complex and rapidly changing financial reporting environment.

• 30-credit Master of Science in Accounting (MSAC) Graduate Program • 4+1 Bachelor of Science in Accounting and Master of Science in Accounting (MSAC) Program

Learn more at:

ramapo.edu/msac or 201-684-7270 505 Ramapo Valley Road, Mahwah, NJ

ATTEND A GRADUATE OPEN HOUSE:

MARCH 12th & MAY 21st

Register at: ramapo.edu/msac

NEW JERSEY CPA | MARCH/APRIL 2019

17

FINANCIAL PLANNING SERVICES

Social Security Retirement Benefits for Married Couples

BY JOSEPH DOERRER, CPA/PFS

When should we begin collecting Social Security benefits? This is a question nearly all Americans will need to answer in their lifetimes. Unfortunately, many married couples will struggle to answer this question thoughtfully, acting without careful consideration of the various rules at play. However, with diligent planning and prudent advice from a CPA — their trusted adviser — married individuals may position themselves to make an informed decision rather than a haphazard guess. Many Americans rely on Social Security as a main source of income during their retirement. As such, it is critical for advisers to understand the nuances of this system in order to offer valuable insight.

THE BASICS — INDIVIDUALS Before making any planning considerations, it is important to understand the fundamentals of Social Security retirement benefits on the individual

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level. How are benefit amounts determined? First, a qualifying individual’s primary insurance amount (PIA) is calculated based on their earnings record.

This is the amount one would receive if he or she began collecting benefits at his or her normal retirement age (NRA). NRA varies depending on date of birth. For example, those born in 1960 and later will have an NRA of 67 years old. Generally, an individual’s benefit amount will be a product of their PIA and when they began collecting in relation to their NRA. An individual may generally elect to begin benefits as early as age 62, collecting a permanently reduced benefit. The benefit reduction amount will decrease the closer one delays collection to their NRA. Inversely, an individual can accrue delayed retirement credits (DRC) by postponing retirement beyond their NRA. For those born in 1943 and later, an additional 8-percent benefit per year

can be accrued for each full year that retirement is deferred beyond their NRA, maxing out at age 70. For example, assuming retirement is deferred to age 70, the benefit for an individual with an NRA of 66 will be 132 percent of his or her PIA. SPOUSAL BENEFITS Spouses are eligible to collect the greater of their own calculated individual benefit or up to half of their spouse’s PIA, not including any DRC from their spouse’s deferral beyond NRA. Generally, to be eligible for a spousal benefit both spouses must be collecting benefits. As described in the previous section, NRA rules also apply when collecting spousal benefits.

Spouses may begin collecting a reduced spousal benefit as early as age 62. Unlike individual benefits, deferring spousal benefits beyond NRA does not result in any DRC.

FINANCIAL PLANNING SERVICES

SURVIVOR BENEFITS Surviving spouses may collect the greater of their own calculated benefit or their deceased spouse’s benefit, including any DRC. NRA rules apply to survivor benefits in a similar fashion to spousal benefits. Qualified widows and widowers may generally begin collecting reduced survivor benefits as early as age 60. If the survivor is entitled to benefits based on their own record, they may switch from collecting survivor benefits to their own benefits as early as age 62.

LIFE EXPECTANCY AND OTHER CONSIDERATIONS With the phase out of many popular planning techniques (e.g., File & Suspend, Restricted Application), much of Social Security planning hinges on life-expectancy estimates. Once collecting, the amount of benefits received is directly tied to the length of one’s life.

Unfortunately, life expectancy is nearly

impossible to predict. Beyond family health history, life expectancy statistics can be a helpful resource to consult.

Aside from longevity, there are other considerations to be made in deciding when to collect benefits. Among these considerations are taxability of benefits and potential withholding of benefits.

Social Security is a main source of income for many married American retirees. Due to perceived financial constraints, many American couples opt to begin collecting benefits at age 62 or shortly thereafter. Those couples fortunate enough to consider delaying their starting benefit date to their NRA and beyond should be encouraged to analyze which scenarios best fit their financial situation. The rules are often misunderstood, and, as such, it is of the utmost importance for advisers to properly guide their clients in this area. Educating clients on Social Security, along with longevity statistics

and other planning considerations, could very well be the edge needed to ultimately ensure a sound decision is made. Advisers should consider Social Security as part of a client’s overall retirement plan, reducing the taxability of benefits where possible, among other considerations.

Joseph Doerrer, CPA/PFS, CFP®, MST, is a New Jersey-based tax advisor. He is a member of the NJCPA and can be reached at joedoerrer@yahoo.com.

LEARN MORE MAY 23, SOMERS POINT HOT TOPICS IN FINANCIAL PLANNING Register at njcpa.org/events READ MORE FINANCIAL PLANNING ARTICLES AND RESOURCES njcpa.org/topics/financialplanning

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NEW JERSEY CPA | MARCH/APRIL 2019

19

FIRM & PRACTICE MANAGEMENT

Making Partnership More Appealing to Younger Generations

BY RACHEL ANEVSKI, CEO, MATTERS OF MANAGEMENT, LLC

Making partner isn’t what it used to be.

CPAs no longer go door to door to sell commodities like tax returns and audits.

Accountants are no longer interested in one career or staying with just one firm.

Staff don’t want to put in the hours, equity or sweat. They don’t want to hear “Let’s talk when you start bringing in business.” Fewer staff are stepping up and willing to do “what it takes” to make partner. They are not like us.

Sound familiar?

A CLOSER LOOK Making partnership more appealing to younger generations begins with taking a good look at the behavior current partners exhibit. Does your existing partner group

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stay the latest in the office, never take vacation, anger easily, lose patience frequently, often speak negatively about the revolving staff or lack of payment from clients? These types of behaviors are some of the major reasons younger generations are looking for alternatives to partnership.

If you are a partner reading this, think about all the reasons you love being a partner. Do you love feeling empowered to make decisions, meeting interesting clients you get to make lifelong friendships with and becoming a trusted advisor and the first call your clients make when they need advice? Do you love the flexibility to travel, learn about multiple industries and gain a birds-eye view into executive strategy? How about the shore

house, the fast car, the financial stability and future secured retirement? What about client perks and all that GOLF? All of these are reasons to celebrate your role as partner and should be shared with upcomers, mentees and the future of your firm.

FINDING LEADERS There are leaders everywhere. But, no one wants to join a group of individuals that dislike their work or aren’t happy to arrive each day. Ready to put in another 12 hours today…who’s with me? When was the last time you told someone you loved what you do, or that you were happy with your choice to become a partner? In fact, when was the last time

FIRM & PRACTICE MANAGEMENT

you shared with someone of the younger generation what it would mean to become a partner. Young accountants know the job description of a CFO or a controller, yet few know the job description of a partner. Transparency is key to developing future partners.

The future of partnerships means more than just a buy-in, a decided amount of new revenue to bring in each year or a designated book of business to manage.

The appeal of becoming partner one day means that you get to own a piece of the puzzle with others who share your vision and values. Furthermore, you get to share these ideals with future generations.

Becoming partner means that you have earned one of the highest levels as a CPA. As a partner, other business owners weigh your words and decisions more importantly. As a partner, you may be charged with certain areas within the firm to manage, such as marketing or human capital. You will have more

opportunities to give back to the community and make a difference.

THE BENEFITS OF PARTNERSHIP Staffers have many reasons to strive for partner. Aside from the obvious monetary benefits, partners are able to: yy Lead others. Partners can make an impact that affects large groups of individuals. They have reached a level of mastery within the profession that is recognized by ownership and that is shared with others. yy Create policy and vote on it. Partners don’t just work for the company but also towards the company’s goals and objectives. yy Experience gratitude from various clients and their staff for helping them become successful. yy Exhibit their education, experience and career passion in a way that allows for others to view them at the top, amongst peers.

The way to a more appealing future isn’t limited to enticing staff with flexible schedules, casual dress codes or having bean bags and foosball tables.

It comes when management encourages the next generation to realize that being in a partnership is a wonderful way to celebrate true dedication to the profession, where sharing one’s talent is appreciated both internally and externally.

Rachel Anevski, MAOB, PHR, SHRM-CP, is the founder and CEO of Matters of Management, LLC, a consulting and talent acquisition firm specializing in professional services. Matters of Management is an NJCPA business services provider. Learn more at njcpa.org/benefits.

LEARN MORE MAY 8, WEBINAR STAFFING AND SUCCESSION PLANNING Register at njcpa.org/events

NEW JERSEY CPA | MARCH/APRIL 2019

21

PROFESSIONAL DEVELOPMENT

Balancing Work and Life

BY TWINKLE TAILOR, CPA, PRUDENTIAL FINANCIAL

We live in a world where work and home are increasingly intertwined. Work flexibility is no longer a perk for employees but a core part of companies’ and employees’ work strategies. Employees consider work-life balance as one of the top factors when choosing a job. Alternatively, many employers expect their workers to be available at all times via email, phone or direct message.

Balancing professional life with personal life is like a double-edged sword.

Having a work-life balance offers the flexibility to fit in personal tasks during work hours and professional responsibilities during off-work hours. However, this can also erode the boundaries of work and personal time in meaningful ways and can, in fact, turn into “invasion” of off time.

MECHANISMS OF INTEGRATION Integrating work-life balance occurs by having both flexibility and permeability.

Flexibility is the extent to which a work boundary may contract or expand, depending on the demands of the work and home domains. For example, an employee who leaves work an hour early in order to attend a child’s sporting event has flexibility in the work boundary. Permeability is the degree to which an individual can enact one role while in the physical domain of another role. For instance, an employee who takes a call while at work regarding the scheduling of a health care appointment for an elderly parent has permeability in the work sphere.

WINS FOR COMPANIES Offering a work-life balance is a win for companies. It is the most deliberated topic in boardrooms when planning future talent management. Studies indicate that work-life balance is an important aspect of a healthy work environment.

It helps reduce stress and prevents burnout. Chronic stress is one of the most common health issues in the workplace. It can have both physical

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consequences (e.g., hypertension, chronic aches, heart problems) and mental health implications (e.g., depression, anxiety, insomnia). By creating a work environment that prioritizes a work-life balance, employers can save money, boost staff retention rates, and maintain a healthier, engaged and satisfied workforce.

WINS FOR EMPLOYEES Work-life balance is a necessity for employees. However, in today’s integrated world, employees can struggle with fulfilling personal and professional responsibilities.

Employers continue to expect more from staff, which leads to feeling pressured to achieve greater results. Consequently, this leads to longer working hours and less time spent at home. Work-life balance can offer peace of mind with life responsibilities so that employees can provide their maximum effort toward work responsibilities. Nevertheless, it is ultimately the responsibility of the employees to seek and maintain the balance.

HOW TO OBTAIN A WORK-LIFE BALANCE yy Maintain a network. Managing family and career requires a strong network of behind-the-scenes supporters. Equally important is emotional support when employees are dealing with an issue at work. Personal networks of family and friends serve as a reliable audience and can instill a fresh perspective on resolving a problem. yy Manage the technology. Deciding when, where and how to be accessible for work is an ongoing challenge.

Rather than technology managing your presence in two places, insist on the value of undivided attention. yy Take time off. While it may feel difficult and often selfish to take time off, unplugging from work can offer immeasurable benefits. It can result in improved cognitive abilities, reduction of stress, a new view on old problems and renewed energy.

yy Say no. Rather than being compelled into taking on extra initiatives, carefully evaluate the time commitment against personal and professional responsibilities, and then manage your availability.

Determine and do what is important to you. Don’t sweat the small stuff. yy Talk to your employer. Many employers offer benefits that enable a worklife balance. Discussing your specific situation and determining appropriate flexibility through telecommuting, flex time, job sharing and part time may pave the way for the right balance.

Striking a healthy work-life balance is not a one-shot deal, rather an ongoing process as one’s personal and professional life changes over time.

Twinkle Tailor, CPA, is a financial analysis manager at Prudential Financial in Newark. She is an MBA Candidate at Rutgers University.

Twinkle is a member of the NJCPA Emerging Leaders Council, Accounting & Auditing Standards Interest Group and the Student Programs & Scholarships Committee. She can be reached at twinkle.tailor@yahoo.com.

TAX

New Jersey Sales and Use Tax: A Contractor’s Guide to Reasonable Compliance

BY VICTOR P. TREGLIA, CPA, NJ SALES TAX AUDIT & REFUND SPECIALISTS

Let’s take a shallow dive into the New Jersey sales and use tax (S&UT) rules and responsibilities associated with contractors who perform services in the state.

By definition, a contractor is an individual or a business entity who engages in the business of improving, altering, repairing or maintaining the real property (land, buildings and other types of realty) of others. All contractors doing business in New Jersey must be licensed and registered.

Services performed by contractors may be subject to sales tax (e.g., repair, maintenance, taxable capital improvement), exempt from sales tax (e.g., exempt capital improvement) or a combination of both taxable and nontaxable services.

Unless working on a tax-exempt job, contractors (and subcontractors) must pay sales or use tax on all purchases of materials and supplies as the contractor is considered the consumer (end user) of the goods purchased.

A great source of free contractor information is available on the New Jersey Division of Taxation’s website at state.nj.us/treasury/taxation. The site contains numerous tax publications that are not only well written and on point, but also are of tremendous value when researching contractor S&UT issues and concerns. Several of the more prominent publications include the following: yy S&U-3 — Contractors & NJ Taxes (very important) yy NJAC — 18:24-5.1 / 5.19 yy TB-67 — Tax Exemptions – Ex Orgs yy S&U-6 — Sales Tax Exemption Admin The appropriate stakeholders of the business entity should consider spending some time reading and absorbing these publications along with their associated information. Upon doing so, most questions and concerns with respect to a contractor’s S&UT will be answered and addressed.

KEY ISSUES AND CONSIDERATIONS If a New Jersey S&UT compliance review has not been recently performed, now would be an appropriate time to do so.

Consider engaging a New Jersey S&UT practitioner for guidance through the review process. Clearly, it’s better to proactively detect areas of noncompliance, prior to a possible audit, and then timely correct any deficiencies.

Is the business entity registered for New Jersey S&UT? If not, then consider doing so. Again, consider engaging a S&UT practitioner to guide you through this process.

Additionally, it may be beneficial to apply for a Voluntary Disclosure Agreement (VDA) to minimize the historical tax exposure (four years with a VDA versus seven or more years without one) if audited.

Defining what qualifies as a taxexempt capital improvement can, at times, be difficult. Pages 3 and 4 of the S&U-3 publication provides a reasonable framework to assist in making the determination. Figuring out billing is key. Are the contractor’s sales invoice amounts billed in a lump-sum format or do the invoices separately state materials and labor? This issue may have a significant and adverse effect on the calculation of the S&UT and the associated liability to the contractor upon audit. Refer to pages 8 and 9 of S&U-3 for a complete analysis. Just because sales tax may have been collected on the total invoice amount, the contractor is not relieved of paying sales or use tax on all purchases of materials and supplies.

Proper and fully completed exemption certificates should be timely obtained and retained. Refer to the information contained in the S&U-3 and S&U-6 publications.

Things like answering internal questions, contract review, developing policies and procedures, reviewing purchases for use tax, and maintaining compliance are but a few of the tasks that should be regularly performed.

Here are some tips: yy At least annually, review your exemption certificate file for completion and accuracy. yy Seek and obtain Letter Rulings from the Division of Taxation when uncertain taxability issues arise. yy Maintain a fixed asset binder containing all F/A purchase invoices.

Have materials and supplies that are to be used for out-of-state jobs delivered to the job site. If received in New Jersey, then the purchases are subject to New Jersey S&UT. Victor P. Treglia, CPA, is a former New Jersey Division of Taxation auditor and is the founder of NJ Sales Tax Audit & Refund Specialists (NJSTARS.com). He is a member of the NJCPA State Taxation Interest Group and can be reached at 732-929-4110 or vtreglia@njstars.com.

READ MORE STATE TAX NEWS AND ARTICLES njcpa.org/topics/statetax

DO MORE JOIN THE STATE TAXATION INTEREST GROUP njcpa.org/groups

BEST PRACTICES AND VALUABLE TIPS Appoint someone qualified to handle the business’s S&UT responsibilities.

NEW JERSEY CPA | MARCH/APRIL 2019

23

TECHNOLOGY & INFORMATION MANAGEMENT

Working Remotely is the Future of Accounting

BY JEANETTE GRIBBIN, MAZARS USA LLP

Once upon a time you had to be in the office to be a productive member of the team — but no longer! Tax technology has come a long way over the years, eliminating handwritten tax forms, paper filing of tax returns and the need to be in the office to effectively manage your clients. Below are some technology resources that allow your team to work together even when you can’t be in the same place.

AUTOMATED TAX WORKFLOW If you’re still using a manual workflow system (i.e., workpapers moving around the office from preparer to reviewer to partner), you may be slowing your team’s productivity when tax returns are sitting and waiting on someone’s desk for the next step. An automated system allows team members to watch the return move through the office on their computer and alerts each team member when a return has been assigned to them. It can also allow staff to communicate questions and information directly within the application.

There are many workflow solutions to choose from, with most being web-based, providing access from anywhere. Setting up an automated workflow system is as easy as mapping out your office’s processes and finding the application that works best for you.

VIDEO/WEB CONFERENCING You may have employees who work from home or multiple office locations using shared resources. You need to communicate with these team members, and an in-person meeting is not an option. Web conferencing is the most common tool used to hold online meetings. In addition to the ability to host multiple attendees, you can share your presentation or workpapers with everyone on the conference.

And, if you prefer to communicate face to face, you can add video.

LIVE STREAMING As offices grow and the ability to work from anywhere becomes a reality for your

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employees, getting everyone together for an important department or office meeting can prove challenging. Live streaming these events can ensure that everyone is getting your message.

MOBILE OFFICE APPS Smartphones have not only made our personal lives more efficient but they also give us access to our most-used business apps on the go. Build your office suite for smartphones and be sure to include: yy Email. Most commonly used email services offer an app to give employees the opportunity to check and respond to emails and keep up to date on calendar events and tasks. yy Time entry. Most time-entry providers have an app version of their software. It may have limited capabilities but will allow employees to enter their time from anywhere, increasing efficiencies in billing. yy Authentication. Security is the main concern employers have when allowing their employees to work from home or access their systems from a client. An extra level of protection ensuring the person logging into an employee’s computer is actually the employee is available through two-factor authentication at the time of login, either through an app or text messaging.

yy Workflow. In many instances, the automated workflow system discussed above can also be added to your mobile office suite (check with the provider). This allows team members to answer questions and move work along while on the go. yy Video/web conferencing. You don’t need to be in front of the computer to join in web or video conference meetings.

Most providers offer an app for that. yy Expense tracking. Capturing employee expenses in the current billing cycle can be challenging when the employee is not in the office. Technology in this area has come a long way. Be sure to include an expense tracker in your mobile office suite, preferably one that allows the ability to upload photos of receipts.

While tax technology has certainly come a long way, be sure to encourage your employees to disconnect too. Having all this technology at your fingertips can signal that an employee must always be on and available, leading to burnout. Disconnecting — whether it’s after a certain time of day, on the weekends or an agreed-upon schedule — gives your employees the opportunity to relax and clear their heads, making them more productive when they are connected.

Jeanette Gribbin is a tax manager at Mazars USA LLP. She can be reached at jeanette.gribbin@mazarsusa.com.

NJCPA NEWS

New Ovation Awards Announced NJCPA has rebranded its awards program to recognize excellence across a consistent range of categories per year instead of having a single award category. In the past, NJCPA has distributed the Volunteer Award, Women of Note, Diversity & Inclusion Impact Award or 30 Under 30 as the given award for that year, but all award categories will now be listed under the Ovation Awards umbrella.

Members will continue to be honored for their commitment and dedication to their communities, the next generation of CPAs, the accounting profession, or the success of women and minorities through the following seven categories: yy Emerging Leader. Are you, or do you know a savvy superstar who has been working in the accounting profession 10 years or less? The individual has had noteworthy professional accomplishments; combined personal and professional achievements that merit special recognition; actively participated in the advancement of the profession or NJCPA; and stands out in the areas of professional knowledge, skill, integrity and leadership.

(Awarded to NJCPA members only) yy Diversity, Equity & Inclusion. Honor the champions of diversity, equity and inclusion. These champions work passionately to make the accounting and finance profession open, welcoming and fair to encourage and promote initiatives and change, regardless of race, sexual orientation, religion, age, gender, disability status or other dimension of diversity.

yy Innovation. Innovation is transforming accounting at lightning speed. Eligible candidates are driving innovation of all kinds, as it relates to accounting — leveraging new technologies, using forward-thinking data analytics strategies, implementing alternative business models or rolling out experimental engagement strategies to improve employee culture. yy Exceptional Educator. Recognize full-time college accounting educators who distinguish themselves with their excellence in teaching and prominence in state-wide or regional activity to actively encourage careers in accounting and by serving as role models in academia. yy Women to Watch. Applaud the growth and success of female NJCPA members for their leadership, potential, contributions and/or commitment to fostering the success of their colleagues.

(Awarded to NJCPA members only) yy Impact. This award recognizes those who dedicate meaningful time and energy to any of the following commendable endeavors: Giving back to the community; sharing professional expertise to support others; or advancing the interests and needs of the accounting profession through active engagement, leadership or advocacy. yy Lifetime Leader. Celebrate the standout NJCPA member of exceptional merit for remarkable contributions to the accounting profession over the course of

their career. This individual has abundant professional achievements, extensive community service, steadfast determination and model leadership, making the recipient of this distinction a truly exceptional, lifetime leader. (Awarded to NJCPA members only) “The Ovation Awards are a new way to honor exceptional professionals for all that they do. Everyone contributes in their own way to the accounting profession, whether its teaching, mentoring or giving their all to their staff and clients, but we would like to honor those who go above and beyond — in all categories,” said Ralph Albert Thomas, CPA (DC), CGMA, CEO and executive director of the NJCPA. Is there someone who has been making an impact at your organization or whose community service work has gone unnoticed? Nominate them for an award or nominate yourself (this is not the time to be modest!). Nominations can be submitted by NJCPA members, HR and marketing team members and other colleagues.

DO MORE SUBMIT OVATION AWARD NOMINATIONS BY MAY 17 njcpa.org/ovation

NJCPA Honors 50+ Years of Membership Every year, the NJCPA honors members who reach 50 years of membership. There are currently more than 240 members who have attained that goal.

Special mention goes out to Milton Zisman, CPA, who has the highest number of years of membership at 72 years, followed by Benjamin Barth, CPA; Bernard Tillis, CPA; and Frank

Timoni, CPA, at 68 years each. Martin Levy, CPA; Morton Parish, CPA; and Irwin Traurig, CPA, have been members for 67 years. Daniel Goldberg, CPA; John Sheehan, CPA; Vincent Simonetti, CPA; and Robert Stefany, CPA, have 66 years of membership.

“To have such incredible dedication to the NJCPA is remarkable,” said

Ralph Albert Thomas, CPA (DC), CGMA, CEO and executive director at the NJCPA. “We truly appreciate such longstanding commitment to our organization and to furthering the accounting profession.”

For a complete list of CPAs with 50-plus years of NJCPA membership, go to njcpa.org/about.

NEW JERSEY CPA | MARCH/APRIL 2019

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NJCPA NEWS

Presenters Expand Diversity Outreach NJCPA members visited more than 3,000 accounting and business students at New Jersey high schools in 2018 as part of its Career Awareness Program. Presenters discussed accounting careers and the importance of becoming a CPA at 115 schools, with a special emphasis on increasing diversity in the profession.

John W. Citti, CPA, associate director in treasury and investments at the American Civil Liberties Union Foundation and NJCPA presenter, says he discusses advancement opportunities, salary potential and job security with the students along with emphasizing the wide range of career paths open to CPAs. “The program gives us an opportunity to present a more realistic picture of the profession. I recently worked with the CFO of a large nonprofit who told me he studied accounting largely because he was introduced to it through a program like Career Awareness, so this program really can impact a student’s life,” he says.

“I have long thought inner city schools were under resourced. One of the goals of the Career Awareness program is to increase diversity in the profession, and I thought presenting the program at a diverse urban school would help achieve that goal while introducing students to a career they might not have considered,” he adds.

Making students from low-income backgrounds aware of scholarships available from the NJCPA and other places is a key part of the discussions. Presenters discuss the NJCPA Scholarship Fund, which awards $7,000 scholarships to college-bound New Jersey high school seniors who intend to major in accounting or obtain a concentration in accounting. The Fund also awards $6,000 one-year scholarships to accounting students at New Jersey colleges or universities who are currently in their junior year or in their senior year and are entering an accounting-related graduate program. Last year, the fund awarded $375,000 in scholarships to more than 70 high school and college students.

“Students need good advice on college financing. Many students from low-income families don’t consider top public and private colleges because of the cost, not realizing many of these schools have large financial aid budgets,” says Citti. “Qualified students can graduate from top schools with manageable debt, but they need someone to make them aware of this.”

Peter Bozzo, CPA, CFO at American Continental Properties, LLC and presenter at various New Jersey schools, agrees. “To generate interest in the accounting profession is very rewarding.

Students need career advice at both the high school and college level.” The

Amy S. Perrone, CPA, RMA, PSA, manager at Bowman & Company LLP, makes a career presentation at Lenape Regional High School.

presentations, he adds, are a “great way to give back to the next generation and help get them started in accounting.”

DO MORE SIGN UP TO BE A CAREER AWARENESS PRESENTER njcpa.org/volunteer

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CLASSIFIEDS

MERGERS/ACQUISITIONS

Seize a merger/acquisition opportunity with benefits for you. We are looking for firms ranging from $300,000 to $5,000,000 eager to combine forces as we continue to grow across northern NJ, Westchester and the Hudson Valley region. Goldstein Lieberman & Company is ideally situated to service all types of industries. Visit www.glcpas. com; email me, Phillip Goldstein, CPA, Managing Partner, philg@glcpas.com; or call me at 800-839-5767 to have a confidential conversation.

Local Morris County firm is seeking to acquire practices ranging from $200K to $500K from retirement-minded practioners and/or seeking compatible merger of candidates who have a book of business exceeding $200K. We have partner, manager and staff offices available. Contact Carl Gutt at 973-451-0800 ext. 22 or cgutt@dglcpa.com.

Essex County retirement-minded CPA seeks CPA to assume his partnership interest and continue with remaining partner at our office location. Retiring partner will remain during transition period. Interested candidates should reply with resume to essexcpa@gmail.com.

Monmouth County tax and wealth advisory firm seeking partnership with sole practitioner, CPA practice(s): looking for an additional source of recurring revenue to compliment your tax practice? Looking to enter the wealth advisory business without the costs and complexities? Do you have a succession plan in case of incapacity? Contact Gregg at gshaw@hstaxwealth.com, 732-859-4949; www.hstaxwealth.com.

Union County Accounting & Tax practice is looking for potential acquisition or merger candidates with annual billing ranging from $250K - $750K. Possible scenarios include: outright acquisition, merge and transition toward retirement or merger of equals.

Please reply in strict confidence to unioncountycpa2000@gmail.com.

New Jersey practices for sale: gross revenue shown: Toms River area Tax $62K; Hunterdon County CPA $650K; North Essex County CPA $320K. For more information, call 800-397-0249 or visit www.aps.net.

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REAL ESTATE

Office space for lease. 142 Livingston Ave, New Brunswick, NJ. Rent includes all utilities, gated parking, security cameras, alarm system and common conference room and kitchen. Ideal for accounting. Please contact Beata at beatagall@hotmail.com or 908-581-3322.

To see additional classified listings or to place an ad, visit njcpa.org/classifieds.

NEW JERSEY CPA | MARCH/APRIL 2019

27

MEMBER STORY

Howard, who didn’t complain too much since his office’s location was also next door to that of Irving Berlin’s (of White Christmas fame) and above the restaurant owned by Jack Dempsey, the famous boxer. “I did audits of royalties for Frank Sinatra and a couple of other stars,” explains Howard.

And when Howard was offered the chance to usher, and eventually emcee, at the Palace Theatre next door, he jumped at the chance — in between accounting work, of course. “I was 6'2" at the time, and the guy running the Palace Theater asked, ‘Would you like to be an usher?’” It’s there where he met and dined with Danny Kaye, Harry Belafonte and Jerry Lewis.

How One CPA Never Left Broadway

BY KATHLEEN HOFFELDER, NJCPA CONTENT EDITOR

Not many CPAs have led as full a life as Howard Bookbinder, CPA. From having lunch with the likes of Harry Belafonte and Jerry Lewis, to doing stand-up comedy, to being on the set of “Howdy Doody,” Howard has pretty much done it all.

In his own words, “I’ve been on Broadway since I was 16,” referring to being an usher at the Palace Theater on 47th Street and Broadway and running his CPA practice today on Broadway in Fair Lawn. Born in Brooklyn, Howard has met movie stars, been on a television program as a child, ran for mayor of Glen Rock and Bergen County Freeholder and became a Councilman in Glen Rock.

So, where did all of this limelight start?

With his grandmother. “My grandmother was a big shot in Coney Island,” he says, referring to how she ran the New York division of the USO during World War II. As a perk, he was able to help her lead the Fourth of July parade. His grandfather was a dancer,

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wrestler and steeplechase barker, who had quite a few brushes with stars of his own.

From there, Howard spent time in both Brooklyn and the Bronx after a challenging turn of events where his father contracted tuberculosis and the family separated. Reunited years later, Howard’s entertaining personality always got him noticed in school and in the community. He participated in the “Howdy Doody Show” since his teacher’s niece was the puppeteer who manipulated Howdy Doody. “They would take us from school to the NBC building, bring us upstairs and give us balloons and candy,” he said.

SURROUNDED BY MUSIC Though accounting and theater don’t exactly go together, he enjoyed both. And it’s a good thing too — while working at M. Silberman & Co., an accounting firm in Manhattan, a music composer had the office in front of them. “I had to work and do tax returns listening to his piano playing,” said

GOOD AT NUMBERS Realizing his true talents were still with numbers, he worked at Chemical Bank (which became Chase Manhattan Bank), and eventually met his wife Beverly and had three children, David, Glenn and Melisa (deceased 1991). He attended night school at Pace University to set his course to become a CPA. In an unprecedented move, Pace let him take the actual CPA Exam as his class’s final exam since, by this time, he had already worked six years in public accounting. “I was able to sit for the real exam, which was thrilling,” said Howard.

After a short stint at a larger firm, he returned to M. Silberman and became partner. Eventually he leapt to New Jersey to be closer to one of his clients, set up a private practice, became a teacher at Rutgers University, joined several NJCPA committees and interest groups, authored Bergen Record’s Tax Mailbag as well as his own books, and was appointed to the New Jersey Israel Commission.

But though Howard’s life has taken various turns, some aspects of his childhood will always remain. “As I tell everybody when I teach ethics, my mother left me with very good bones and post nasal drip.

She also me gave me a ‘twitch.’ When a client starts giving me a lie, my twitch comes out and notifies me,” he said.

WATCH MORE VIEW A VIDEO PROFILE OF HOWARD njcpa.org/videos

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