May/June 2020

M AY/J U N E 2 0 2 0

THRIVING

IN A NEW REALITY: THE FUTURE CPA

Think bigger.

AICPA certificates take your career from here to there.

When you’re ready to show your competencies, expand your career opportunities or enter new areas of practice, start by earning an AICPA certificate.

When you successfully complete any program, you can display a digital badge and gain recognition as an invaluable asset to your firm or organization.

Choose a certificate that matches your next career goal. We cover multiple areas: • • • • •

Data Analytics Forensic Accounting Personal Financial Planning Not-for-Profit Blockchain

Learn more at njcpa.org/certificates SAVE 25% on Not-for-Profit I & II certificates now through June 30, 2020 with code NFP25.

Message to Our Readers Amid the Coronavirus Pandemic As the coronavirus pandemic continues to alter our way of life and how we conduct business, we want to express our sincere wish for you to stay healthy, be safe and keep your businesses and firms running as smoothly as possible. Our heartfelt thoughts are with the entire NJCPA community as this virus has touched everyone in some manner. We want to remind you that we are here for you as an information source, a sounding board and a friendly ear.

This issue of New Jersey CPA was written before the coronavirus became a pandemic, so the authors did not reflect the crisis in their articles. The theme of this issue, “Thriving in a New Reality: The Future CPA,� was also planned before the pandemic; little did we know just how much our reality would be changing. Accounting professionals are navigating unchartered territory and are being tested in new ways with work/office space challenges, changing regulations and rethinking business plans for their own companies and their clients. At the NJCPA, we are striving to make those efforts a little easier.

We acknowledge that there are a lot of uncertainties going forward amid this new reality and things are rapidly changing, so we have created a coronavirus page on our website at njcpa.org/ coronavirus. We will continue to bring you the most timely and relevant information surrounding tax extensions and relief, federal economic relief packages, resources available to New Jersey businesses and individuals, and more.

Learning and CPE Though all in-person NJCPA education events are cancelled through at least June 30, hundreds of online CPE options are available from the NJCPA and our learning partners, including two of our popular in-person conferences which have been converted to virtual events this year: y Audits of Employee Benefit Plans Conference, May 19 y Governmental Accounting & Auditing Conference, June 25 Search all upcoming events at njcpa.org/events

2020 ANNUAL CONVENTION & EXPO CANCELLED It was with a heavy heart that NJCPA decided to cancel the 2020 Annual Convention & Expo due to the coronavirus pandemic. The health and well-being of our attendees, staff, exhibitors and sponsors is our highest priority. Cancelling nearly 100 exhibitors and sponsors does not come easy, nor does erasing a year’s worth of planning. But we are confident the NJCPA community will forge through these trying times and come out stronger.

We would like to thank the companies that were planning to participate in the Convention as sponsors and exhibitors: SPONSORS y y y y y y

ADP Wells Fargo Bank JPMorgan Chase Investors Bank PNC Bank Provident Bank

y y y y y y

Bank America Connell Foley Columbia Bank Paychex Santander Bank MindBridge

y y y y y y

Netgain Overwatch Group PCS Sage Guaranteed Rate NJ Business Magazine

y y y y y y y y y y y y y y y y y

Gallagher Affinity GruntWorx Heartland Systems HQ Advisory Group Intrepid Advisors Jetpack Workflow KBKG Kearny Bank M&T Bank Management Planning, Inc. Mazteck IT McGowan Professional Merchant Advocate National Life Group Northeast Professional Planning Group Northfield Bank Peapack-Gladstone Bank

y y y y y y y y y y y y y y y y y

PEO Spectrum Plymouth Rock Point Vantage Benefits Preferred Pension Planning QuickFee Ramapo College of New Jersey RBAC Real Time Consultants SourceHOV Tax Spencer Savings Bank TaxDome Unified Trust USA Payroll USI Affinity Vision33 Wolters Kluwer Workplace HCM

EXHIBITORS y y y y y y y y y y y y y y y y y

1st Constitution Bank Advanced Computer Technologies Affinity Federal Credit Union Balance Point Business Learning Institute Capstan Tax Strategies Casa Payroll Cedar Risk Management Citi ConnectMeVoice CorpCo Cost Recovery Solutions Dale Carnegie Dow Wealth Management Drake Software Exchange Authority First Bank

We welcome you all to join us for the 2021 Annual Convention & Expo June 15-18, 2021, at the Borgata in Atlantic City. See you next year!

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contents M AY/J U N E 2 0 2 0

THE MAGAZINE OF THE NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS

6 Evaluating the CPA License: What’s the True Value?

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, CAE Chief Marketing Officer dmeyer@njcpa.org RACHAEL BELL Managing Editor rbell@njcpa.org KATHLEEN HOFFELDER Content Editor khoffelder@njcpa.org DIANE ESPIRITU Senior Graphic Designer despiritu@njcpa.org WALT HARTSFIELD Junior Graphic Designer whartsfield@njcpa.org

Beyond the traditional reasons to obtain a CPA license — such as gaining prestige and respect from colleagues, family and friends; enhancing career development; gaining more career security; ensuring job satisfaction; and money and benefits — it can offer rewards for a lifetime.

8 Handling Competition: Is it Time to be Innovative?

With technology throwing monkey wrenches into the world of accountants, CPAs need to differentiate from the pack and provide more value to clients. It is important for CPAs to remind clients and prospects who they are, what they know and how they got here. CPAs will continue to be in demand — just not in the same way as in the past.

10 Forward Thinking: The CPA 10 Years Out

The CPAs of the future will not be a new kind of data cruncher with advanced technological skills; he or she will have to proactively anticipate client needs, react to new business opportunities and perform daily routines with the mindset of putting clients first. They need to work towards being the consummate client relationship manager and trusted advisor all rolled into one.

14 How to Develop Professional Relationships in a Digital World Amid a digitized world, using technological know-how to meet contacts and potential clients is important. But face time still matters and so does having one-on-one conversations — it’s not enough to attend a large business event and call it networking. Learning to “sell without selling” one’s services is the best follow-up to any networking.

4 CLOSE UP

Getting to Know Alan Sobel

THE NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS 105 EISENHOWER PARKWAY SUITE 300, ROSELAND NJ 07068 973-226-4494 | NJCPA.ORG #NJCPAMAG READ NEW JERSEY CPA ONLINE AT NJCPA.ORG/ NEWJERSEYCPA

TO ADVERTIS E I N NEW J E R S E Y C PA Visit njcpa.org/advertising or contact Eileen Proven at eproven@njcpa.org or 862-702-5640

16 ACCOUNTING, AUDITING & ATTEST

The Auditor’s Role in Internal Controls 17 BECOMING A CPA

Skills Needed in Today’s Workforce 18 FINANCIAL PLANNING SERVICES

Elder Care Funding Considerations for Clients 19 FIRM & PRACTICE MANAGEMENT

Tone at the Top

20 FORENSIC ACCOUNTING, LITIGATION SERVICES & BUSINESS VALUATION

3 Considerations When Providing Forensic Services for Cryptocurrency 21 GOVERNMENTAL & NONPROFIT

Nonprofit Filing Thresholds Vary by State 22 PROFESSIONAL DEVELOPMENT

Career Path and Progression Options for CPAs 23 TAX

Key Considerations in Closing a Business

24 NJCPA NEWS

y 2020/21 Executive Committee and Board of Trustees y NJCPA Members: Making a Difference and Building Career Skills y NJCPA COO Ellen McSherry to Retire y NJCPA Awards Accounting Scholarships 27 CLASSIFIEDS 28 MEMBER STORY

Sasha Pailet Koff, CPA

CLOSE UP

Getting to Know Alan Sobel

BY KATHLEEN HOFFELDER, NJCPA CONTENT EDITOR

The New Jersey Society of CPAs welcomes Alan D. Sobel, CPA, CGMA, managing member of the firm at SobelCo, LLC, as the 2020/21 president beginning June 1, replacing outgoing president Kyle Sell, CPA, MBA, audit partner at Deloitte & Touche LLP. Most members of the NJCPA know Alan Sobel as a hard-working advocate for small and midsize businesses in New Jersey who led the charge for the passage of the Pass-Through Business Alternative Income Tax Act, which allows passthrough businesses to pay New Jersey income taxes at the entity level instead of at the personal level. With his passion to assist businesses taxed as flow through entities in the wake of the Tax Cuts and Jobs Act (TCJA) and its state and local tax deduction cap, Alan worked tirelessly with New Jersey legislature and the NJCPA to inform Governor Murphy’s office about the importance of the bill to business owners. This initiative is poised to collectively save New Jersey business owners between $200 and $400 million annually.

Governor Murphy signed the bill into law on Jan. 13 and it is effective starting with the 2020 tax year.

INSPIRING CPAs But there’s another side to Alan. Like most CPAs, he carries a strong service mentality to help others in the accounting profession — those needing encouragement to become CPAs and those current CPAs needing inspiration. “Accountants tend to be doers,” he explains, noting that in his role as the NJCPA president he sees it as a priority to inspire members to

“bring forth their collective know how for the betterment of our economy. We need to inspire people within our profession.”

Whether CPAs are in public practice and deal with external clients, or are in industry, nonprofit, government or academia, the goals of the CPA are very much the same, he adds. “We should be positioned as trusted and reliable advisors. People talk about my passion for helping businesses, but it is the passion of all CPAs to help businesses, nonprofits or individuals.

Most successful CPAs are not selfish people; they believe their well-being is best served when they are serving others. It’s a service mentality.”

Improving networking, he says, is one way to move the needle forward engaging accountants and helping them to be that trusted advisor. Networking, he adds, is crucial for growing businesses and advancing careers, as well as the profession itself. “The usefulness of networking has never gone away; people who don’t see the value in it are not necessarily doing it effectively.” However, what used to work 15 years ago clearly is not working today, he says. “We have to find other ways to engage CPAs. I don’t care where they work.

Their values and integrity are the same and they have the same commitment to lifelong learning.”

Adapting to new technological advancements can also help keep CPAs inspired. The more the profession embraces new uses of technology, the more opportunities exist for participants already in the field and those who may want to enter it. But he notes that technology can’t replace the human element

that’s still needed to get, and keep, people engaged.

SPEAKING UP So, what can CPAs do to get more engaged? “They can speak up,” he says.

“CPAs are incredibly smart people. They have the insight and intellect for problem solving. There are tremendous amounts of good ideas trapped inside CPAs as they go about their day-to-day work,” he explains.

“If you have a good idea and don’t speak up about it, then it’s just an idea. Change can happen. New Jersey can benefit greatly by the collective wisdom, ideas and intellect of our CPA community.”

Similar to Alan’s quest in moving the pass-through entity legislation forward, he recommends others follow his efforts and voice their opinions. “I would encourage everyone to provide their input. NJCPA has the resources to help. Everybody can make a difference, even at a small level, in the way our state succeeds,” he explains. Learn more about Alan at njcpa.org/about/board.

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. 81 Copyright © 2020 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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Purple

How CPA Firms Can Navigate the Coronavirus Pandemic Now more than ever, CPA firms need to be proactive as we all address new daily challenges and operate in a ‘new normal.’ Read our latest blogs at www.accountantsadvisory.com/red-zone for recommendations on sustainability, communications, security measures, and key marketing strategies to get your firm through these unprecedented times.

TA R G E T M A R K E T I N G + L E A D G E N E R AT I O N SOLUTIONS TO GROW Y O U R C PA F I R M

· · · · · · · ·

Promote Value-Added Services to Targeted Prospective Clients Explore M&A Opportunities to Grow or Sustain your Business Increase Staff Communications to Ensure Productivity, Retention, and Morale Conduct Online Meetings Using Video Conferencing Expand Technology Security Measures for your Remote Workforce

Increase Thought Leadership Communications Host Digital Events and Webinars, and Send Videos Ongoing email Campaigns, Social Media, and Website Updates

Contact us to learn more about how we can assist your CPA firm grow and achieve long-term success.

845-265-9046 www.accountantsadvisory.com

Joseph Tarasco, Chief Executive Officer, Senior Consultant Nancy Damato, President, Senior Consultant, Marketing & Business Development and Leader of The Growth Zone®

EVALUATING THE CPA LICENSE: WHAT’S THE TRUE VALUE?

By BARRY R. PALATNIK, Ed.D., CPA, AND JEAN INGERSOLL ABBOTT, Ed.D., CPA

STOCKTON UNIVERSITY

Students often ask, “Do I really need a CPA license?”

The obvious answer is that a CPA license is needed to perform financial statement audits and reviews. But not all students are interested in auditing. How will a CPA license enhance their accounting career?

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The National Association of State Boards of Accountancy (NASBA) lists the following five reasons to obtain a CPA license: y Prestige and respect y Career development y Career security y Job satisfaction y Money and benefits PRESTIGE AND RESPECT CPAs are members of an elite group of financial professionals. There are approximately 1.3 million accountants in the United States and approximately half of them — 664,532 — are CPAs. The American Institute of CPAs (AICPA) noted in a 2016 report1, “When most people think about a strong brand, Disney or Apple come to mind. But when we at the AICPA think of a strong brand, we think of the CPA. And we are pleased again to report that independent research confirms that the CPA stands stronger than ever.”.

The CPA brand is supported by the three attributes of licensing: education, examination and experience. For most candidates, the biggest obstacle is the Uniform CPA Examination (CPA Exam).

While we never hear a student say they are looking forward to taking the exam and have never known a licensed CPA

willing to take it again, the work that goes into passing the exam can offer rewards for a lifetime.

CAREER DEVELOPMENT The CPA profession continues to be at the forefront of business transformation.

In its “2019 Trends” report, the AICPA stated that the accounting profession is rapidly evolving, driven by data science and analytics, changing the way the CPA is doing business. The profession responds to the dynamic business and technology environment by keeping the CPA Exam relevant and by requiring CPAs to engage in continuing professional education. The CPA Exam is frequently refreshed and aims to test the higher-order skills that the profession requires of newly licensed CPA. The CPA profession is proactive in guarding and enhancing the value of the CPA license. In December 2019, the AICPA and NASBA introduced a proposal for a “New Model for CPA Licensure.” The model uses a “core and disciplines” approach. The proposed CPA Exam will test a core of knowledge in accounting, auditing, tax and technology, and candidates will select one discipline for further testing, such as tax, business reporting or information systems. This proposal is currently in its

comment phase; the AICPA anticipates finalizing the approach for an updated CPA licensure model in summer 2020. The implementation is expected to be a multiyear effort.

CAREER SECURITY The U.S. Bureau of Labor Statistics expects a 6-percent job growth rate for auditors and accountants from 2018 to 2028, in line with average job growth expectations. But they state that, “Accountants and auditors who have earned professional recognition, especially as Certified Public Accountants (CPAs), should have the best prospects.”

Decision makers and stakeholders have a growing need for nonfinancial information.

The CPA profession is in the position to step in and fill this need. According to a 2018 report on the future of the accounting profession by Ovidius University2, “People trust the accountancy profession just as they trust in doctors, even more the CPA is viewed with greater confidence in comparison with professions such as journalist, lawyer or politician, which shows that the accounting profession benefits from trust from the population.” There is ample evidence that the CPA has the skill set to add value to businesses.

JOB SATISFACTION CPAs have great job flexibility. Many start careers at public accounting firms, but there are other options. Businesses, nonprofits and governments all need accountants, and the CPA license enhances the careers of those who specialize in management accounting. The Institute of Management Accountants’ 2019 Global Salary Survey found that, in the United States, those with a CPA and Certified Management Accountant (CMA) credential made approximately 15 percent more than those with a CMA only. CPAs also have the option of starting their own firm and specializing in an area of interest. Job flexibility allows the CPA to tailor work to their lifestyle and life stage.

Public accounting firms, with their wide variety of services, can offer satisfying careers and opportunity for advancement.

A 2016 survey3 in the Journal of Accountancy showed what areas of public accounting

had the happiest employees. The survey used a five-point scale; a score of five indicated the happiest employees. Auditing and assurance employees were the happiest, financial advisory the least happy, with taxation and consulting in the middle.

Job Satisfaction 3.7 3.65 3.6 3.55 3.5 3.45 3.4 3.35

Financial Advisory

Taxation

Consulting

Auditing and Assurance

To maintain job satisfaction, public accounting firms must be proactive. Firm leadership should be flexible in creating work/life balance for their CPAs. Compensation packages should not be overlooked to retain top talent. Young CPAs should be mentored for leadership positions and given the opportunities to learn about the different services offered.

MONEY AND BENEFITS According to the U.S. Bureau of Labor Statistics, the median salary for accountants and auditors in 2018 was $70,500. Keep in mind that there are many factors that contribute to salaries, including geographic locations and size of employer. Accounting graduates who passed the CPA Exam with one year of experience can earn, on average, between $46,000 and $68,000, again depending on the geographic location and size of the firm. Without the CPA license, earnings drop to between $44,000 and $60,000.

Putting it into accounting terminology, one approach is to use the net present

value method to evaluate the CPA license as an investment. In a 2016 Journal of Accountancy article4, the authors used a conservative approach, considering all the expenses of acquiring and maintaining a CPA license. They found that the net present value of the license when obtained right after college graduation, over a 37year career at a small firm, is approximately $130,000. This value increases for those working at a large firm.

Based on both research and anecdotal evidence, accounting students have a high probability of receiving a satisfying return on their investment and having respected, challenging and flexible careers. ¹ blog.aicpa.org/2016/05/cpa-brand-researchthe-good-the-challenge-and-the-opportunity.html ² ideas.repec.org/a/ovi/oviste/ vxviiiy2018i2p684-689.html ³ journalofaccountancy.com/issues/2016/jun/ increase-happiness-at-work.html ⁴ journalofaccountancy.com/issues/2016/may/ cpa-credential-delivers-high-value.html Barry R. Palatnik, CPA, Ed.D., MBA, is assistant professor of accounting at Stockton University. He can be reached at barry.palatnik@stockton.edu.

Jean Ingersoll Abbott, CPA, Ed.D., MBA, CIRA, CDBV, is associate professor of business studies in accounting at Stockton University. She is a member of the NJCPA Student Loan Debt Task Force and can be reached at jean.abbott@stockon.edu.

READ MORE CPA EVOLUTION evolutionofcpa.org ARTICLES AND RESOURCES ABOUT BECOMING A CPA njcpa.org/becomeacpa

NEW JERSEY CPA | MAY/JUNE 2020

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HANDLING COMPETITION: IS IT TIME TO BE INNOVATIVE?

By CHRISTOPHER R. CICALESE, CPA, MSTFP

ALLOY SILVERSTEIN ACCOUNTANTS AND ADVISORS

Let’s get straight to the point.

The number-one reason most people start building a network is to grow their business. But, after some time in the game, you realize how much more building business relationships can benefit all aspects of your life.

Despite what popular TV commercials may say these days, all people aren’t tax people. In addition, they might not be a CPA, an auditor or even a bookkeeper. The world of accounting continues to grow with “experts” trying to supplement their income by equipping themselves with software purchased at the local store or online.

Thanks to new technology, even geography is no longer a barrier. The accountant located a state over is just as competitive in the market as the accountant down the street.

An accountant’s competition is no longer found just within the accounting industry as it could start appearing from Silicon Valley or even overseas. Looking at the types of technology firms use and the high costs of recruiting and retaining employees, it is easy to see the writing on the wall. Technology and automation will begin replacing accountants’ jobs if they haven’t already. At the same time, some firms outsource work to foreign countries.

This puts more and more pressure on the modern accountant to adapt to today’s world so they can remain competitive.

THE VALUE OF SOCIALIZING In a world of screen time, be human!

Building relationships with clients, prospects and referral partners is even more important in 2020. Although some events and connections may seem insignificant at

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first, you never know who someone knows.

Sharing who you are as a person, behind the business card, can go a long way.

Many times, a contact has thanked me for taking extra interest in their business.

That interest could be as simple as having a conversation with someone and just seeing where their industry is going or asking questions about how they operate.

Although this might not directly translate into business, it does build more of a connection and give valuable insight that can be used with other contacts in a similar industry. More importantly, taking a small amount of time to show interest in a contact overcomes the introvert accountant stereotype. So if your contact is later out on the town, they can boast about how you aren’t the “typical” accountant.

INNOVATION HELPS Today there is software that can do almost every part of the accountant’s day-to-day tasks. To remain competitive with other firms, big and small, physical and virtual, it is important to implement technology to help automate tasks and mitigate manual billable hours. This could be anything from write-up work to audit sampling.

When searching for software options, it is vital to evaluate and test the software thoroughly to understand how it will work and if staff can handle it. If new software

that costs tens of thousands of dollars can’t be used correctly, it is just a waste of money. At the same time, as awesome as it would be to automate all processes, it is important for software end-users to understand what the software is doing so they can interpret the results or output. A prime example would be scanning client source documents for a personal tax return and using the scanning software to automatically enter the data into the return. If a fresh graduate doesn’t understand tax law, they may assume a return is correct because the computer did it and time will be wasted making corrections. The more reliant a user becomes on software, the less likely they will truly understand a task.

Having top-notch technology at your fingertips is great, but when that technology fails, you need to have a backup plan so that the job still gets done. Having the knowledge to complete the task manually will provide an advantage over the competition that solely relies on that same technology. Many non-CPAs that enter the traditional CPA territory don’t always understand the theory behind tasks that they enable technology to handle for them. While technology is valuable and helps complete the tasks faster, CPAs still must educate not only their staff, but also their clients so everyone can understand the “why.” Technology gives everyone the

ability to achieve the same result, but the interpretation could be way off if they don’t truly understand what they are doing.

When evaluating an app or software, it’s important to know when to realistically call it. If the hoops one is going through to be more efficient are actually making them less efficient and productive, it’s time to reconsider. Not every business can use the same tech stack and, in some instances, the client may not be able to use it correctly.

Although the urge to use technology to compete with other firms will always be there, it is important to be smart about it and still focus on the core business. If the tech doesn’t work, turn attention to the client and find the most efficient way to complete the job.

KEEP THE FOCUS Whether a CPA is at a conference or reading a monthly accounting journal, he or she will see new things in the industry that will often distract from core services. Today, many firms are trying to adapt to cloud accounting and outsourced accounting services. The truth is that this could possibly overextend the resources of some firms. At that point, the work product may suffer and actually be a disservice to clients. Many of the new faces in the accounting world that have no true accounting background are solely relying on a tech stack to help them

complete their tasks. As accountants, we need to differentiate ourselves from the pack and provide more value to clients.

Clients don’t want just a copy-and-paste tech stack. They want their CPA’s expertise, time and service. Those who do that well will be harder to replace.

As the outside world enters the accounting market, it is important for CPAs to remind clients and prospects who they are, what they know and how they got here.

Christopher R. Cicalese, CPA, MSTFP, is a manager at Alloy Silverstein Accountants and Advisors. He is a member of the NJCPA and can be reached at ccicalese@alloysilverstein.com.

LEARN MORE

MAY 14, JUNE 29 AND JULY 14, WEBINAR

2020 CPA TECHNOLOGY TRENDS UPDATE

MAY 15, JUNE 19 AND JULY 16, WEBINAR

MIXED REALITY FOR ACCOUNTANTS

MAY 15, JUNE 19 AND JULY 16, WEBINAR

AUTOMATION SURVIVAL GUIDE

FOR ACCOUNTANTS

Register at njcpa.org/events

NEW JERSEY CPA | MAY/JUNE 2020

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FORWARD THINKING: THE CPA 10 YEARS OUT

By KATHLEEN HOFFELDER

NJCPA CONTENT EDITOR

Where will the accounting profession be 10 years from now? NJCPA members and noted experts in the profession weigh in.

Beyond advanced digital capabilities, applying analytical know-how will be one of the main skillsets of future CPAs. They will not be a new kind of data cruncher with advanced technological skills; they will have to proactively anticipate client needs, react to new business opportunities and perform daily routines with the mindset of putting clients first.

So, how do CPAs get there from here?

They need to work towards being the consummate client relationship manager and trusted advisor all rolled into one. Baby Boomers and Gen Xers naturally excel at relationship building, but they will have to mentor and inform the next generation of CPAs on how to better interact with clients, garner new business and retain customers. They will have to hone, relearn or, in some cases, learn for the first time, the use of data analytics. Though it may mean losing more control over certain functions, they will have to automate anything that can be automated. Similarly, newcomers

CONTRIBUTORS In order of appearance

BILL REEB, CPA, CITP, CGMA Co-Founder and CEO Succession Institute, LLC Chair, AICPA

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JAMES C. BOURKE, CPA, CITP, CFF, CGMA Managing Director of Advisory Services Withum

MAY/JUNE 2020 | NEW JERSEY CPA

ROBERT TRAPHAGEN, CPA, CGMA Managing Partner Traphagen CPAs & Wealth Advisors

JASON CULLARI, CPA, PSA, MBA Managing Member Cullari Carrico LLC

SARAH KROM, CPA Managing Partner SKC & Co., CPAs, LLC

THOMAS PEDERSEN, CPA Principal WilkinGuttenplan

BARRY R. PALATNIK, CPA, Ed.D., MBA Assistant Professor of Accounting Stockton University

to the profession will have to enhance their people skills and their communication — abilities not normally finessed in curriculums today — though they have some of the strongest technology-based backgrounds of any generation. Together, along with their mature counterparts, they will have to understand that proactive thinking, not reactive, is how they will best respond to clients and anticipate future client needs.

Bill Reeb, CPA, CITP, CGMA, co-founder and CEO of Succession Institute, LLC, and chair of the board of the American Institute of CPAs (AICPA), says despite the inevitable changes to the profession, the current time is one of the most exciting to be a CPA. According to Reeb, “the digital era has brought about a blistering pace of change that’s transforming the world around us. This pace of change is not incremental — it’s exponential.”

“We need to reimagine ourselves and start building right now the competencies to add an advisory component to everything we do. And we need to be prepared for the reality that the bread-and-butter basic compliance work we have gotten comfortable producing will no longer be part of our job expectation and, therefore, we need to skill-up and be ready to take on highly complex transactional work,” he adds. “Yes, our future will be different, but I believe it will be exemplified by new opportunities, fulfilling and valued work, and knowing that we are continuing to make a difference for the people and public we serve.”

Learning new skills or ways to strategize is never easy but it’s an imperative for future CPAs. Reeb explains that in order “to leave this profession as strong or stronger than we inherited it, we must take leaps, not steps. We must achieve a common state of being uncomfortable with our discomfort and not thinking about our own self-preservation, but rather the preservation and sustainability of our profession.”

As James C. Bourke, CPA, CITP, CFF, CGMA, managing director of advisory services at Withum and a past president of the NJCPA says, huge changes are ahead for CPAs, but some CPAs are more than halfway there. “When I look up what

NEW JERSEY CPA | MAY/JUNE 2020

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‘Wiki’ says about an accountant today, it states, ‘An accountant is a practitioner of accounting or accountancy, which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resource(s),’” he says, adding that “we are so much more than that to our clients and, quite frankly, always have been.”

Accounting professionals with more advisory skillsets will increasingly find their way to the upper layers of management in CPA firms. Robert Traphagen, CPA, CGMA, managing partner at Traphagen CPAs & Wealth Advisors and a past president of the NJCPA, says, “the upper level will now be comprised of a new thought leadership consisting of CPAs, synthesists and other credentialed professionals, collectively providing a holistic financial solution to clients’ objectives.

CPAs will have a unique opportunity to position themselves as leaders in this new paradigm, leveraging their strength in analytics to continue their role as the trusted advisor.”

Indeed, CPAs are morphing away from the mundane, repetitious functions that have characterized their job functions in the past but, says Jason Cullari, CPA, PSA, MBA, managing member of Cullari Carrico LLC, a lot of that is due to clients forcing those changes. “People are realizing that CPAs have a deep network of trusted advisors, either internally or externally, and want to simply plug into that network.” He says this dynamic, which has always been at the core of the CPA’s relationship with their clients, “is causing CPAs to expand their offering of services.”

So, how might clients view this trusted advisor differently? Bourke notes, “As accountants in 2030, our clients will come to us with all their needs, not just tax and attest.” And, he adds, that it may take a full 10 years for the transformation to fully resonate.

THE MODERN CPA Efficiencies with automation and new advances in technology should continue to alleviate time-consuming functions for CPAs and their staff. And mandatory face time in the office is likely to be a thing of

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the past with remote office working and new apps arriving daily. In years past, CPAs have even put off important life choices due to heavy workloads. While the work may not dissipate in the coming years, future CPAs should have more time-saving workflow systems in place and better ways of tracking client information to get that work done faster.

But, as Sarah Krom, CPA, managing partner at SKC & Co., CPAs, LLC, and a past president of the NJCPA, notes, quicker does not mean replacing client contact.

The future CPA will be all about clients.

“Business owners will have a need for deep relationships with their trusted CPA advisors who focus on strategic and innovative solutions to obtain goals,” she explains.

Flexibility will take on new meaning in any new trusted advisor role, which will impact CPAs as well as their staff. “The modern CPA will have a heavier focus on employee wellness (work/life balance) and flexibility (working from home) as well as an expanded selection of candidates outside of standard accounting degrees in order to combat the shrinking CPA marketplace,” explains Cullari. “They will have more specialized staff and niche services being provided to clients with fewer and fewer CPAs being ‘generalists.’”

Clients will find their accountant is able to spend more time consulting and advising on their business, says Thomas Pedersen, CPA, a principal at WilkinGuttenplan, as opposed to just signing a tax return and rendering an audit opinion. Though, he’s quick to point out, “the modern CPA firm will be strategic in looking ahead to make sure they are leaders of the change in the profession and not afraid to take shortterm risks to ensure long-term success.”

DATA EFFICIENCIES Data, data and more data will be even more important for the future CPA. “Every client, no matter how small, will have custom dashboards on their phone screens in real time. The level of touch between the client and the business advisor will be no less than weekly and will focus on accountability, strategy and innovation,” explains Krom. “Instant, usable data will be at our fingertips with

everything in real time — benchmarks, trend graphs, ratio calculations.”

With data at their disposal and clients looking to interact with their CPA more frequently, Cullari says there will be more opportunities “where CPAs are acting as part-time controllers, CFOs and even business coaches, providing constant and reliable feedback at a reduced cost.” The controller function, for example, will be extremely automated, with some functions, at least, outsourced.

And artificial intelligence (AI) will assist CPAs in their new advisor role. As Krom explains, “AI will aid in our accountability through apps that keep us on schedule and organize our time to allow us to accomplish everything on our to-do lists in the most efficient way.”

Vast amounts of data will result in more meaningful metrics, admits Traphagen.

“Just as analytics changed the baseball landscape during the Moneyball revolution, access to more data will also allow for significant changes in accounting; more financial data in audits will provide a higher level of comparability allowing the CPA to identify anomalies on a larger scale.” But he cautions about relying only on data. Metrics will be extremely important; however, he says, CPAs will need to recognize that strategy is an abstract and, while metrics give strategy form, we should not lose sight of strategy by focusing merely on metrics.

The most significant technological development is 5G, according to Traphagen.

“Some say 5G is 100-times faster than 4G. With 4G networks, the latency, or the time it takes for data to go from source to destination, has an average of around 50 milliseconds (ms). That could drop to one millisecond with 5G technology. This means more data and more content loading the internet and other areas of storage. The speed and greater amount of data that can be transmitted will have a steroid effect on big data. The ability to collect huge or large amounts of data and convert it to AI will be a global game changer and, coupled with cloud technology, will alter strategic planning for the future.”

In short, CPAs must help businesses manage change while helping themselves

manage their own futures, explains Barry R. Palatnik, CPA, Ed.D., MBA, assistant professor of accounting at Stockton University. “Changes in the workforce, technology, the economy and regulations will no doubt reshape the CPA profession over the next 10 years. Our hope is that the CPA profession works together to anticipate and manage these changes.”

LEARN MORE

MAY 19, JUNE 8 AND JULY 24, WEBINAR

AUTOMATION SURVIVAL GUIDE

FOR ACCOUNTANTS

MAY 21, JUNE 10 AND JULY 23, WEBINAR

UPSKILLING FOR ACCOUNTANTS

JUNE 20 AND JULY 14, WEBINAR

LEADERSHIP SKILLS FOR PEAK

PERFORMANCE IN THE 21ST CENTURY

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NEW JERSEY CPA | MAY/JUNE 2020

13

HOW TO DEVELOP PROFESSIONAL RELATIONSHIPS IN A DIGITAL WORLD

By ANTHONY MONGELUZO PCS

Do professional relationships still matter in the digital universe? And if they do, does their impact and importance remain at the forefront of acquiring new clients?

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You might wonder why a tech guy is writing about networking in a CPA-focused magazine. My expertise on this subject rests on an unknown backstory to my company’s progress. I started the business with no employees in my parents’ spare bedroom. The year was 2000. Today, I’ve brushed past the 170-person mark in a two-story Moorestown headquarters that we own. It would be easy to say that focus, technical expertise, hard work, becoming a TV personality with an 10-plus year run as FOX-TV’s tech expert, and luck — yes, luck, the element most business people hate to acknowledge — all played a role.

But there was a glue that brought these components together.

That glue which is the backstory to my tech success and one that you must consider if you wish to grow your accounting practice: Networking.

I can succinctly sum up my approach in three words: “Every night out.” I know it sounds like hyperbole, but as a 21-yearold, I was out virtually every night at functions, meetings, coffees, dinners, receptions, it didn’t matter. You name it, and I was there.

I understand that the scale and style (no one would ever call me a wallflower) essentially fit some of the criteria for becoming a networking maven. I’ve lost

count on the number of inroads — yes, gaining new clients — that I’ve achieved from all these networking events.

Before going further, you must decide on a singularly important issue. If you wish to grow your business, networking must be a component to your expansion even in this digitally connected world.

There’s no way to escape it. If you’re satisfied with your current size, then you don’t have to take the plunge. You will grow modestly, if at all.

The specifics that you can apply almost immediately include the following: 1. Occam’s razor. When faced with two conflicting choices, choose the simplest. Ask yourself two simple questions: “Who do I want as clients?” and “Where can I find them?” The answers will help you home in on an organization, conference or similar vehicle to find them.

2. The time commitment. This is the tricky one, especially if you’re not 21, unmarried and, well, free of all social encumbrances. Perhaps once a week or even twice a month is all that you are willing and able to commit. Decide on a limit and then follow it for a year. But you must commit.

3. Is this networking stuff working?

One of the most frequent questions people ask me is how long they should stick with a networking event. I normally suggest that they give every regularly scheduled networking event up to one year before making a judgment. Then it’s simple. Did you get at least one client, and what was the financial value of the business? It will allow you to calculate a cost-to-effort ratio and decide whether to continue. This is especially true if there is a fee to belong to the organization. I’m always surprised how few people use this barometer. If your networking efforts are modest relative to the time you’re willing to commit, I would consider a six-month trial.

4. Don’t sell, solve a problem. Tech people like me, and accountants like you, are fortunate. Everyone at some point has a computer-related problem.

Most businesspeople, at one point or another, either have an accounting problem or, at the very least, want to run an idea past their accountant before leaping. That’s where you come in. Don’t try to close the deal the first time you meet. Let them talk about their accounting issues. Ask them about their accounting approach or their accountant. I have a client who loves his accountant. And he says so. This person is unlikely as a prospect. At an event, be

polite, chat a bit, give him or her your card and move on. But when you see someone puzzled about an accounting issue or, better yet, if you see them groan when they bring up their accountant, you’re in a field of clover. Provide a solution. Even better, demonstrate the breadth of your knowledge by offering several solutions. It’ll impress them.

5. The follow up. Every time you read about networking, the advice is to follow up and become ruthlessly adherent to this rule. Then why don’t we do it?

The bottom line is that you must follow up if you promised to do so. And don’t allow three months to go by. Do it within a week, with a phone call or, even better, a short, hand-written note. For the 40-plus crowd, that still has great cachet value.

6. Social media. No, we can’t ignore this.

It’s the digital business card. Here’s the quick rundown: y Facebook —You can have a personal and a business site. y Twitter — Breaking news and “topics of the day.” y Instagram — It favors photos and videos. I’m not sure potential clients want to see you crunching numbers.

y LinkedIn — Often regarded as the best for B2B. Here’s your chance to shine by strutting your accounting knowledge.

I have a friend who is a public relations expert and wrote a 250-page book on the subject. He never pitches his business. When he’s out and about, he’ll ask for a prospect’s card and send them his book. It establishes his expertise.

But you don’t have to write a book. I know of a CPA who sends out year-end tax tips to her clients. She should send that same tip sheet out periodically to potential clients as her “book” and include a note. It’s selling without selling, and it’s the follow-up to your networking. It works.

Anthony Mongeluzo is the CEO and president of Moorestown, New Jersey-based IT company, PCS. He can be reached at Anthony@helpmepcs.com, on Twitter @PCS_AnthonyM or online at helpmepcs.com.

LEARN MORE

MAY 11, JUNE 6 AND JUNE 17, WEBINAR

COMMUNICATION SKILLS FOR INTROVERTS

MAY 15, JUNE 15 AND JULY 17, WEBINAR

EFFECTIVE NETWORKING: TAKE

CONTROL OF YOUR CAREER

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NEW JERSEY CPA | MAY/JUNE 2020

15

ACCOUNTING, AUDITING & ATTEST

The Auditor’s Role in Internal Controls

BY DONALD J. KAISER, CPA, McCARTHY & COMPANY, PC

Internal controls are among the most important anti-fraud controls that businesses have. According to the Report to the Nations on Occupational Fraud and Abuse (2018) from the Association of Certified Fraud Examiners (ACFE), in 30 percent of the cases studied, a simple lack of internal controls was the main factor that enabled the fraud to occur. Another 19 percent of the cases happened because the perpetrator was able to override the controls. More internal control weaknesses cited in the research included lack of management overview (18 percent), poor tone at the top (10 percent), lack of competent personnel in oversight roles (8 percent), lack of independent checks/audits (4 percent), lack of employee fraud education (2 percent), lack of clear lines of authority (2 percent) and lack of a reporting mechanism (less than 1 percent).

FRAUD FACTS It is not surprising that more fraud cases were reportedly done in accounting than any other department in the Report to the Nations. An external audit of company financial statements was one of the most common anti-fraud controls reported being used by 80 percent of the entities. Companies with this mechanism in place typically reduced the median loss due to fraud from $170,000 to $150,000 (29 percent).

Other controls may be more effective in reducing a median loss like having a code of conduct (56 percent); proactive data monitoring (52 percent); surprise audits (51 percent); external audit of internal controls, management review and hotline (50 percent); anti-fraud policy (47 percent); internal audit department (46 percent); management certification of the financial statements (43 percent); fraud training for employees (43 percent); and formal fraud risk assessments (41 percent).

THE AUDITOR’S ROLE The American Institute of CPAs defines internal controls as a process “effected by those charged with governance, management and other personnel — designed

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to provide reasonable assurance about the achievement of the entity’s objectives with regard to the reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations. Internal control over safeguarding of assets against unauthorized acquisition, use or disposition may include controls related to financial reporting and operations objectives.”

The auditor’s job when conducting an audit is to identify and assess the risks of material misstatement due to fraud or error. To do this, the auditor must understand the entity, its environment and its internal controls. The auditor should have information on internal factors such as the company’s ownership, management team, operations, investment opportunities, growth strategy, financing, and accounting methods and policies. The auditor also needs to understand how external factors like industry trends, economic data and regulatory requirements impact the entity.

The auditor must know the classes of transactions, account balances and disclosures to be made to the financial statements. The auditor should evaluate whether the entity’s accounting policies are appropriate for its business and consistent with industry standards. A review of the entity’s financial performance needs to be done. The auditor must also know who, if anyone, is in the position to override internal controls meant to safeguard the company.

This information will help the auditor design the audit plan, decide what needs to be tested and determine how to assess the risk of material misstatement or fraud.

RISK ASSESSMENT BEST PRACTICES The auditor should know if the entity has processes in place to accomplish the following: y Identify business risks relevant to financial reporting objectives y Estimate the significance of the risks

y Assess the likelihood of their occurrence y Decide about actions to address those risks If the auditor identifies a risk of material misstatement, it must be discussed with management to determine the cause. If the entity does not have a risk assessment policy, management should be advised to develop one. The auditor must evaluate whether the absence of a documented risk assessment process is appropriate and if it represents a deficiency or material weakness.

The auditor is not responsible for finding fraud. Management and those involved with governance over the entity are responsible for fraud detection and prevention. This includes establishing an honesty-based culture, developing and enforcing an anti-fraud policy, training employees to recognize fraud, and reminding employees to watch for and report suspected cases of fraud.

Donald J. Kaiser, CPA, is a principal with McCarthy & Company, PC. He is a member of the NJCPA and can be reached at Donald.Kaiser@MCC-CPAs.com.

LEARN MORE JUNE 12, WEBINAR UNDERSTANDING AND TESTING INTERNAL CONTROL

ON DEMAND

y INTERNAL CONTROL FUNDAMENTALS

y INTERNAL CONTROL TESTING

FOR OPERATING EFFECTIVENESS

y INTERNAL CONTROL

ADVANCED CONCEPTS

y COMMUNICATING INTERNAL

CONTROL DEFICIENCIES

y VALUE-ADDED INTERNAL

CONTROL COMMUNICATIONS

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AUDITING ARTICLES AND RESOURCES

njcpa.org/topics/auditing

BECOMING A CPA

Skills Needed in Today’s Workforce

BY KERI MULLIN, CPA, MBA, WILKINGUTTENPLAN

The role of the CPA has changed dramatically over the years. Young accounting professionals are now expected to have a more rounded skill set. While numbers are a key focus of a CPA firm, accountants are adapting to a more diverse role and becoming a trusted advisor to their clients. Young professionals have to be able to develop additional soft skills to succeed in today’s workforce. Below are a few crucial skills interns and young accounting professionals can focus on to stay ahead of this curve and become successful: COMMUNICATION SKILLS One area in business that has not lost its significance over the years is the importance of numbers. Numbers are still everything to a business — what is our gross profit, how much revenue do we expect to bring in this year, how are we doing financially overall?

These questions have been asked by every business and will continue to be asked.

However, it is not just about the numbers anymore. With automation taking over a lot of the “grunt work,” young accounting professionals can focus more time on becoming a trusted advisor and not just a number cruncher. These new relationships with clients will also lead to more face time and interactions. Interns and young professionals need to be able to hold conversations and present issues to clients. Interns and young accounting professionals should take soft skill development courses that focus on communication skills. Those who are current on hot business topics and can speak confidently and think analytically will add even more value to client relationships.

BECOME INVOLVED Most accounting firms today have different committees that are dedicated to staff development and “next gen” opportunities.

Everyone from interns to entry-level accountants to experienced CPAs should get involved in the firm. Options can include sitting on a committee or in on practice group meetings or becoming an “expert” at something. Those who specialize in a specific industry or technical topic can

become the person that people at the firm reach out to. Another way to be heard and stand out is to continuously ask for more “next gen” experiences. Partners or managers may not always think to ask a new professional to attend a client meeting or a call with them; savvy professionals will beat them to the punch and ask if they can tag along. Getting involved at the firm is a great way for interns and entry-level accountants to make themselves heard.

TIME MANAGEMENT Aspiring CPAs must master their time management skills. Being successful at time management helps to keep priorities straight and the focus on tasks that are truly important. Focusing on tasks that are not a priority can cause accountants to fall behind schedule and make it more stressful to meet deadlines. Time management is also very important for mental health. Keeping an organized schedule and setting a course of action can make client work easier as well as help mental wellbeing. The last thing any CPA needs during busy season is being stressed out about work as they try to go to bed after working long hours. Mastering time management early on in one’s career can also help when trying to balance work and studying for the CPA Exam.

Keri L. Mullin, CPA, MBA, is a senior accountant at WilkinGuttenplan. She is on the board of the NJCPA Union County Chapter and can be reached at kmullin@ wgcpas.com.

LEARN MORE

MAY 11, JUNE 6 AND JUNE 17, WEBCAST

COMMUNICATION SKILLS FOR INTROVERTS

MAY 27, JUNE 19 AND JUNE 26, WEBCAST

COMMUNICATING FINANCIAL

INFORMATION TO NON ACCOUNTANTS

MAY 28 AND JUNE 8, WEBCAST EFFECTIVE BUSINESS WRITING

JUNE 3 AND JULY 14, WEBCAST SUCCESSFUL COMMUNICATION

ON DEMAND

MAKING REPORTING REALLY

COUNT: BASIC COMMUNICATION EXCELLENCE

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READ MORE ARTICLES AND RESOURCES FOR EARLY CAREER PROFESSIONALS njcpa.org/career/early-career

NEW JERSEY CPA | MAY/JUNE 2020

17

FINANCIAL PLANNING SERVICES

Elder Care Funding Considerations for Clients

BY LAURIE HAUPTMAN, ESQ., AND YALE S. HAUPTMAN, ESQ., HAUPTMAN & HAUPTMAN, P.C.

Estate planning answers the questions: What happens when you die? How will your assets be distributed and to whom?

It may involve minimizing estate taxes using trusts. But, increasingly, the bigger questions are: What happens if you live and get sick? What happens if you have increased health care costs and need to rely on others for assistance for an extended period before you pass away? While advances in medical science have extended our lives, many seniors need years of long-term care.

CPAs often have aging clients who may face choices over how to pay for long-term care without depleting their nest eggs. If these clients have time to plan ahead, they can use irrevocable trusts to protect assets so that they can qualify for government benefits such as Medicaid and the Veterans Affairs benefits that can help pay for care. Those programs may not, however, cover the entire cost, so the assets in the trust can be used to pay for whatever the government program won’t cover. For clients who are already at more advanced stages of need, they will need to qualify for benefits to pay for care as quickly as possible and preserve as much as possible for a healthy spouse or other family member in need.

Here are the common issues CPAs should be aware of and which can impact income taxes: y Standard deduction versus itemized.

Given the high cost of long-term care — whether administered in a nursing home, assisted living facility or at home — clients often have an increased medical deduction on Schedule A of their Form 1040. Revisit each year whether a senior client who normally takes the standard deduction may now benefit from itemizing because of increased care for themselves or their spouse. y Using retirement funds. Conventional advice has held that we should only take the minimum amount required from our IRAs and other tax-deferred

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accounts under required minimum distribution (RMD) rules (the recently passed SECURE Act limits this tax advantage). For clients who currently have long-term-care expenses, using retirement funds first is advisable if the tax can be offset by the increased medical deduction. For clients who are looking to protect assets using trusts, this gets a bit more complicated because they don’t yet need care.

If, however, they do need care for a lengthy time period, they may need to spend a large part or all of the retirement account on care. y Medicaid considerations. Medicaid is the primary government program that pays for long-term care. With limited exceptions, Medicaid recipients must contribute their income to the cost of care and the state pays the rest. Income means gross income. Clients should not withhold anything from their Social Security or pension for taxes because the increased medical deduction will eliminate the need but also because Medicaid requires the gross income to be turned over to either the facility or the state. Any amounts already withheld which are then refunded upon filing an income tax return could cause the loss of Medicaid if not handled correctly because of Medicaid’s strict asset limit. y Irrevocable trusts. The irrevocable trusts used for long-term-care asset

protection purposes are typically but not always grantor trusts. In some cases, the income generated by trust assets is taxed to the grantor and in other cases the income can be taxed to other lifetime beneficiaries or to the trust. y Annuities and REITs. Clients can often have annuities or Real Estate Investment Trusts (REITs) which can complicate qualifying for Medicaid.

Annuities are generally considered countable assets subject to spenddown rules (except for Medicaid compliant annuities which are treated as income). Annuities often have surrender charges and REITs usually do not allow for easy liquidation.

Yale S. Hauptman, Esq., is the founding partner of Hauptman & Hauptman, PC, which specializes in elder, estate planning and special needs law.

He can be reached at yale@hauptmanlaw.com.

Laurie Hauptman, Esq., is a partner at Hauptman & Hauptman. She can be reached at laurie@ hauptmanlaw.com.

READ MORE FINANCIAL PLANNING ARTICLES AND RESOURCES njcpa.org/topics/financialplanning LEARN MORE MAY 19 AND AUG. 26, WEBCAST WHAT TAX PRACTITIONERS NEED TO KNOW ABOUT MEDICARE njcpa.org/events

FIRM & PRACTICE MANAGEMENT

Tone at the Top

BY RACHEL ANEVSKI, MATTERS OF MANAGEMENT, LLC

Originating from the field of accounting, the terminology “tone at the top” is generally used to describe an organization’s ethical climate or expected conduct, as established by its board of directors, audit committee and senior management. Having tone at the top is believed by business ethics experts to help prevent fraud and other unethical practices.

CONVEYING THE MESSAGE Is the tone at the top achieved exclusively when CEOs or managing partners speak at a board meeting or state of the union staff address and everyone leaves the room feeling a sense of understanding because the MP says, “…and the tone at the top is…?”

Unfortunately, not.

So, how is it used appropriately? Tone at the top is a behavior that is replicated by every member of the organization, emphasized by management and lived through actions and activities set forth by the top executives.

In firms that practice this best, you can find language that implies tone at the top in every governing document and process. It is the commitment the firm takes daily and momentarily in its execution of all things. Let’s break it down.

STARTING AT THE TOP The top is the CEO, president or managing partner. It is the one person with the most authority in the organization. This is who the message and commitment must come from; this is where it starts. Even firms that have rotating managing partners or office managing partners still have one individual directing the ship. From there, the executive committee and compliance committees (in larger firms) are the next level. It is imperative that all partners, both equity and non-equity, emeritus and those in name, emulate the tone as well, as they are looked upon as leaders as well as the united front of executive management. And since tone at the top is the ideology of ethically operating in collaboration with everyone and everything, it is only worth something if it becomes the tone in the middle and the tone at the bottom, too.

SETTING THE TONE What is the tone or the message? It’s not just compliance with laws and ethics. It is the adherence to best practices in business that work specifically for the company, a set sales process, human capital practices, customer service brand messaging and the “how to” for procurement and retention of staff members.

Tone is not communicated through a one-page whole office memo or posted on a website or intranet. It’s not a policy.

You don’t have to dig through paperwork to find what it is or ask around for what it means. It is a message that is communicated repeatedly and through as many means and avenues of communication as possible. The tone at the top is part of everyone’s business development goals, compliance, auditing and financial controls. It is part of marketing, human resources, firm administration, technology and office management. Weaving toneat-the-top messaging into education and training programs are common avenues of communication, but it shouldn’t stop there. It should be a visible part of every organized firm activity.

Aside from talking the talk, executives can walk the walk and demonstrate tone and their commitment to ethical conduct by their consistent actions. Firms do this when they create compliance committees and executive committees that review tone regularly.

Those that can identify the tone at the top are amongst a collaborative team that, from top to bottom, hits on key drivers that move the firm forward. Firms that lack this strong and necessary tone may want to consider incorporating strategy, programming and communication methods to ensure their firm is moving ahead both ethically and culturally.

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. Rachel can be reached at rachel@mattersofmanagement.com.

READ MORE FIRM MANAGEMENT ARTICLES AND RESOURCES njcpa.org/topics/firmmanagement LEARN MORE JUNE 8, WEBCAST SMALL RUDDERS THAT TURN LARGE SHIPS — THE SECRETS OF TODAY’S SUCCESSFUL ACCOUNTING LEADERS

JUNE 20 AND JULY 14, WEBCAST

LEADERSHIP SKILLS FOR PEAK

PERFORMANCE IN THE 21ST CENTURY

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19

FORENSIC ACCOUNTING, LITIGATION SERVICES & BUSINESS VALUATION

3 Considerations When Providing Forensic Services for Cryptocurrency

BY MARK ECKERLE, CPA, WITHUM

Cryptocurrency gained widespread attention in 2017 primarily due to the swift increase in prices. That attention brought about greater adoption and more users of cryptocurrency. As more and more individuals and companies buy, sell and transact with cryptocurrencies, maintaining accurate records of transactions has become extremely important.

Accounting firms have been thrust into action in recent years due to their clients using and holding cryptocurrencies. Many users of cryptocurrencies do not know the current regulatory framework or the tax implications. This is a great opportunity for CPAs to work alongside their clients in gathering the proper documentation and supporting materials around their cryptocurrency activities. CPAs can provide clients with a schedule of activity that calculates their purchases, sales, current cost basis, realized gains/losses and current positions in each cryptocurrency.

There are some important factors to keep in mind before starting an analysis: y Make sure complete information is provided y Determine if a software tool can assist y Maintain consistency 1. OBTAIN COMPLETE INFORMATION Before beginning any data analysis, whether it is with cryptocurrency or not, it is vital to obtain a complete listing of all transactions to have a full population or data set. If there is only partial information, it is nearly impossible to be able to provide a proper analysis. The key items to look out for in obtaining complete information include the following: y Obtain transactional activity since inception. y Ensure the correct start and end point to calculate the correct cost basis. y Make sure there are not any gaps in the data set. y Request a list of all exchanges and

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wallets used. This is similar to requesting a listing of all bank accounts. If only a checking account is requested and not savings accounts or money market accounts, then the picture of that individual’s banking activity is incomplete.

2. EVALUATE SOFTWARE TOOLS As the industry has matured in recent years, more cryptocurrency software tools have been created to help users compile and aggregate their data into a legible format. As cryptocurrency increased in popularity, many people found it difficult to sort through records and calculate their cost basis and associated gains or losses. There was a great opportunity in the market for software assistance tools and programs to help provide solutions to ease the burden, particularly for those individuals with a high volume of transactions. The main benefits that software solutions provide include the following: y Time and money savings. Automating the tracking of cryptocurrency activities rather than requiring manual entry saves both time money. y Formatting standardization. Since many exchanges and wallet providers have their own standard reports, some with more transactional detail than others, compiling data from multiple sources that is not in a similar format can be difficult.

3. MAINTAIN CONSISTENCY Accounting follows the consistency principle: Once a certain accounting method is adopted, one must continue to follow this method consistently in future periods. The Financial Accounting Standards Board refers to consistency as one of the characteristics or qualities that makes accounting information useful.

This applies to cryptocurrency because there are certain advantages that one may apply in order to reduce their tax position, specifically with choosing the cost basis method. In September 2019, the IRS released frequently

asked questions and responses as a follow-up to Notice 2014-21, which stated that the cost basis of cryptocurrencies can be at either specific identification or first in, first out (FIFO) for calculating gains or losses.

As the cryptocurrency industry continues to grow as an emerging marketplace, the reporting activity obtained from each exchange is not standardized and the records can vary in detail. Reliable source material is critical; having unreliable documentation can be a major bump in the road in providing accurate reporting.

As a trusted advisor, CPAs must stress the importance of properly storing historical data and transactional activity. As the cryptocurrency industry evolves, so should the quality of reporting standards and activity reports users can obtain from their exchanges and wallet providers.

Mark Eckerle, CPA, is an audit manager at Withum.

He is the vice leader of the NJCPA Emerging Technologies Interest Group (#NJCPATech) and a member of the Emerging Leaders, Cannabis and Accounting & Auditing Standards interest groups.

Mark can be reached at markeckerle@gmail.com.

LEARN MORE MAY 21 AND JUNE 19, WEBCAST CRYPTOCURRENCY ETHICS — WHAT CPAs NEED TO KNOW njcpa.org/events READ MORE DIGITAL CURRENCY ARTICLES AND RESOURCES njcpa.org/topics/digitalcurrency

GOVERNMENTAL & NONPROFIT

Nonprofit Filing Thresholds Vary by State

BY MAGDALENA M. CZERNIAWSKI, CPA, MBA, MARKS PANETH LLP

As nonprofits seeks to attract donors, many consider how wide of a net to cast for charitable solicitation and what that means for tax and audit purposes. Should they be broad with their fundraising activities and try to reach as many potential donors as possible, or should they have more narrow focus? Casting too wide of a net could mean multiple state filings and an administrative burden.

While tax exemption starts at a federal level, most states require organizations to file tax returns where they either have a physical presence or are incorporated. In addition, states require organizations to register with them if they solicit contributions in their states. It’s important to note that each state is different, and each has its own specific requirement. Once an organization determines that it does solicit in a particular state, the organization might also be subject to tax filing and audit requirements imposed by that state.

Each state has its own definition of solicitation, therefore, it might be hard to determine if the organization is, in fact, actively soliciting in a particular state. If an organization does solicit and doesn’t register with the state, it will be prohibited from further solicitation until it’s in good standing. Take, for instance, a university that receives contributions from alumni living now in various states.

Does it mean that the university solicited a donation in the states the alumni live, or did the donors just donate without any solicitation?

NEW JERSEY In New Jersey, solicitation means “the request, directly or indirectly, for money, credit, property, financial assistance or other thing of any kind or value which will be used for a charitable purpose or benefit a charitable organization.1” If an organization is not domiciled in New Jersey but solicits contributions, it must register with the state to do so. Once it does, it must file a registration statement

annually and, thereafter, pay a fee. If its total gross revenue is more than $500,000, it has to also submit a certified audit.

However, New Jersey does have exemptions for small organizations. Small charities are not required to have audited financial statements attached to their annual registration filing unless their gross receipts are over $500,000. If the gross receipts are below that threshold, the certification can be done by an officer of the organization. If that same charity wants to solicit contributions in New York or Pennsylvania, it will have to incur costs of receiving either a compilation or review. At that point, an organization should consider the amounts they can potentially raise versus the cost of the additional filing and financial information certification.

NEW YORK Organizations intending to solicit funds from New York residents must register with the New York Attorney General before doing so. There are some exemptions, but those are mainly for religious and educational institutions. Once an organization is registered, it must file annually, pay fees and submit a financial statement of some kind. New York’s audit requirement level is changing. Currently, an organization with annual gross revenue over $750,000 must submit audited financial statements with its filing. This threshold will be increased to $1,000,000 in 2021. Also, unlike New Jersey, New York requires those charities with gross revenue between $250,000 and $750,000 to have the financial statements reviewed by an independent auditor. New York, unlike other states, does not require any attachments for registered charities if the organization doesn’t solicit more than $25,000 from its residents.

PENNSYLVANIA Organizations intending on soliciting in Pennsylvania need to register with the state prior to doing so. Once registered, there is an annual filing, filing fees and financial

statement requirements. The threshold for audited financial statements is $750,000, while a review by an independent accountant is required for contributions between $250,000 and $750,000. Compilation is required for gross revenues between $100,000 and $250,000.

There is a lot to consider when intending to solicit in a particular state, but it’s also important that if a charity no longer solicits in a particular state, it should unregister and withdraw from the state, which could save money.

Above all, with the state requirements in mind, the solicitation should be a business decision followed by a review of state requirements. ¹njconsumeraffairs.gov/statutes/charitableregistration-and-Investigation-Act.pdf Magdalena M. Czerniawski, CPA, MBA, is a partner and member of the Nonprofit, Government & Healthcare Group at Marks Paneth, LLP. She is a member of the NJCPA Nonprofit Interest Group and can be reached at mczerniawski@markspaneth.com.

READ MORE

STATE FILING REQUIREMENTS

FOR NONPROFITS

councilofnonprofits.org/tools resources/state-filing requirements-nonprofits

LEARN MORE JUNE 29, WEBCAST LATEST DEVELOPMENTS IN GOVERNMENT AND NONPROFIT ACCOUNTING AND AUDITING Register at jcpa.org/events

DO MORE JOIN THE NJCPA NONPROFIT INTEREST GROUP njcpa.org/groups

EARN AN AICPA NOT-FOR-PROFIT CERTIFICATE

Save 25% with code NFP25

through June 30

njcpa.org/certificates

NEW JERSEY CPA | MAY/JUNE 2020

21

PROFESSIONAL DEVELOPMENT

Career Path and Progression Options for CPAs

BY BENJAMIN ASPIR, CPA, MST, EISNERAMPER

Today’s CPAs can pursue many different career paths. While many CPAs work in business and industry, this article will focus on career opportunities in the public accounting sector. Public accounting firms’ services extend far beyond traditional tax and audit into a myriad of advisory services and, within those, a host of industry niches.

CAREER OPTIONS An accounting firm’s size often dictates its scope of offerings. The larger a firm, the more likely it is that a CPA can specialize in a particular area. For example, a CPA at a larger firm ($50M+ in annual revenue) will generally specialize in one service line area, such as tax, audit or advisory. At smaller firms, a CPA will likely wear more hats and work in several different service areas.

I found, particularly early in my career, that it was enormously educational to work with clients in a variety of industries, regardless of service line. The approach allows the new CPA to build a solid foundation of skills, because each industry requires its own specialized knowledge and skill sets. It also gives the CPA time to learn the industries about which they are passionate and would prefer to work in longterm. These industries span real estate, financial services, manufacturing, technology, nonprofit and a litany of others.

CAREER PROGRESSION The progression of titles at firms more or less follows a similar path. For example, our firm goes from staff I through partner. Each position comes with its own responsibilities, requiring vastly different skillsets. Regardless of experience, it is highly recommended that CPAs seek out mentors with whom they feel comfortable. The mentor should help the CPA set attainable goals as well as provide constructive feedback and guidance as they grow within the firm and their career.

A CPA should have a clear understanding of the firm’s expectation at each position level. This is where a supervisor or mentor can provide valuable insight help-

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ing a CPA decide on career progression goals, such as manager, director or partner.

Director and partner positions will require varying degrees of business and practice development skills.

Here are five key skills a CPA must develop in order to advance within a public accounting firm: 1. Technical skills. It is important for a CPA to develop specialized knowledge to perform client work.

This can be accomplished through a combination of education that can be obtained at the university level, via internal or external CPE, or from practical, hands-on experience.

2. Client service. CPAs must dedicate themselves to client service excellence and continue to cultivate relationships.

If clients are treated well, they are more likely to stay and perhaps refer additional work to a firm.

3. Practice development. Early career CPAs should not feel intimidated to raise their hand and get involved in internal firm initiatives. An accounting firm is like any other business and is only as good as the ideas and contributions of its staff.

4. Staff development. Successful CPAs have a thirst for knowledge. Learning can

be obtained from many sources: CPE, networking events, conferences, industry media and so on. Look for a firm that actively invests in its people. Continuing education is essentially a partnership between the firm and its employees.

5. Business development. This is often where the rubber meets the road, generating revenue for the firm. New CPAs should start as early as possible developing their business development skills through networking opportunities and at prospect and client meetings.

Newcomers to the profession might feel overwhelmed by all of this. They shouldn’t; it’s a marathon, not a sprint. While all of this will not be learned over a week, a month or even a year, obtaining all of these skills and knowledge is completely within every CPA’s control. Those who commit to it can receive a lifetime of dividends.

Benjamin Aspir, CPA, MST, is a senior manager at EisnerAmper LLP. He is a member of the NJCPA Emerging Leaders Council and Cannabis Advisory Group, and is the incoming vice chair of the Federal Taxation Interest Group. Ben can be reached at benjamin.aspir@eisneramper.com.

READ MORE

RESOURCES FOR EARLY CAREER ACCOUNTANTS

njcpa.org/career/early

TAX

Key Considerations in Closing a Business

BY CATHERINE V. DAVIS, CPA, MSPC CPAs

As tax advisors, there are several steps we can take to make a client’s business closing an efficient process.

FIRST STEPS A tax advisor should verify any potential payment obligations triggered by the business closure, such as executive compensation payouts or bank loan acceleration. Next, the advisor should prepare an asset inventory, taking into account cash, equipment and intellectual property, among other assets, and, if necessary, obtain a valuation report to assist with the assets’ transfer. This report can become especially important when analyzing the tax consequences of the business’s closure, which vary based on the entity type and its ownership. It is often prudent to set up a reserve account that remains open after the business closes to provide for creditor payments and cover other costs associated with the business’s closing.

DISSOLUTION AND WINDING UP A business’s dissolution must first be approved by its owners, after which winding up will commence. A full discussion of dissolution and winding up is outside the scope of this column, but it is critical to advise clients to confer with qualified counsel regarding the state law nuances associated with these processes, including preparation of resolutions to dissolve or a plan of liquidation.

TAX MATTERS If the business has employees, it should issue final wage information to them on Form W-2, as well as any health coverage information on Forms 1094-C and 1095-C and report the corresponding information to the IRS. Additionally, the business should issue final payment information to independent contractors on Form 1099 and report those details to the IRS. A final employment tax return should be filed, with an appended statement providing the name of the person keeping the payroll records and the address of those records, and a final deposit of the related employment taxes must be made. If the business sponsors any qualified retirement plans, it must decide

whether to terminate the plans. A final Form 5500 may also need to be filed with respect to certain plans.

Most states require that businesses obtain a tax clearance certificate from the taxing authority before they can close. Generally, a requirement to obtain that certificate entails filing final tax returns for the year the business closes and paying any associated taxes. CPAs should review the instructions supplied by state taxing authorities regarding the clearance process, as supplemental documents are often required. Once the tax clearance certificate is issued, the business can generally proceed to filing dissolution documents with the state’s bureau of business organizations. Notably, if the dissolving business is a corporation, the IRS must be advised of its dissolution on Form 966 within 30 days after the resolution or plan to dissolve the corporation is adopted.

NEW JERSEY CONSIDERATIONS While every state has specific laws to keep in mind when clients close a business, any business registered with the State of New Jersey wishing to dissolve must follow a specific process to do so, even if that business was inactive for all of its existence. Those businesses registered for sales, employment and gross income taxes must do the following: 1. Submit a complete NJ Form REG-C-L. This form can be completed online or sent by mail to the Division of Revenue’s Client Registration Bureau.

2. File a final sales and use tax return for the last quarter the business was open, even if no taxes are due.

3. File final quarterly gross income tax returns (Forms NJ-927 and NJ-927-W) for the last quarter the business was open, even if the amount withheld for the final filing period is zero.

4. Provide each employee with a copy of their Forms W-2.

5. File final annual reconciliation of tax withheld (Form NJ-W-3).

6. Provide applicable Forms 1099-R, 1099-

MISC or other statements of payment to recipients and file copies with the state.

7. Complete the back of the Certificate of Authority to Collect Sales Tax and the Business Registration Certificate. Return both forms to the Client Registration Bureau.

8. File final corporation business tax or partnership returns by the applicable due dates.

9. Complete an application for a tax clearance certificate (Form A-5088-TC) and any required supporting documents.

10. File the tax clearance certificate and the dissolving document with the Division of Revenue.

Catherine V. Davis, CPA, is a principal at MSPC Certified Public Accountants and Advisors. She can be reached at cdavis@MSPC-cpa.com.

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JOIN THE NJCPA FEDERAL

TAXATION OR STATE TAXATION

INTEREST GROUP njcpa.org/career/groups

READ MORE FEDERAL TAXATION ARTICLES AND RESOURCES njcpa.org/topics/fedtax STATE TAXATION ARTICLES AND RESOURCES njcpa.org/topics/fedtax

NEW JERSEY CPA | MAY/JUNE 2020

23

NJCPA NEWS

2020/21 Executive Committee and Board of Trustees Meet the NJCPA officers and trustees who will be serving June 1, 2020, through May 31, 2021.

EXECUTIVE COMMITTEE AND BOARD OF TRUSTEES

PRESIDENT

PRESIDENT-ELECT

SECRETARY

ALAN SOBEL, CPA, CGMA

HARRY P. WILLS III, CPA Bowman & Company LLP

JORDAN D. AMIN, CPA, MST

TREASURER

IMMEDIATE PAST PRESIDENT

CEO & EXECUTIVE DIRECTOR

CAROL DONATIELLO IOCCA, CPA, CGMA

KYLE M. SELL, CPA, MBA

RALPH ALBERT THOMAS, CPA (DC), CGMA

SobelCo

WilkinGuttenplan

Deloitte & Touche LLP

EisnerAmper LLP

To learn more about our Executive Committe members, visit njcpa.org/about/board.

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MAY/JUNE 2020 | NEW JERSEY CPA

NJCPA

BOARD OF TRUSTEES

DENNIS BARTLETT, CPA

MICHAEL J. COLETTI, CPA

ISABEL DEL CORRAL, CPA

Cullari Carrico LLC

Mazars USA LLP

McIntee Fusaro Del Corral, LLC

JESSE M. HERSCHBEIN, CPA, CGMA

NOORUS KHAN, CPA

JASON LAURETTA, CPA

JUSTIN D. O’HORO, CPA, CITP, CGMA

ADP

Withum

Smolin, Lupin & Co., P.A.

Prager Metis CPAs, LLC

JOANNE GEYLIN, CPA EisnerAmper LLP

KATHLEEN F. POWERS, CPA

MICHAEL A. STILLITANO, CPA

CHRISTOPHER STOOP, CPA

JUNE TOTH, CPA CFF, CITP, CGMA

Matheny Medical and Educational Center

Hapag-Lloyd

EisnerAmper LLP

ZBT Certified Public Accounting & Consulting, LLC

NEW JERSEY CPA | MAY/JUNE 2020

25

NJCPA NEWS

NJCPA Awards Accounting Scholarships As part of its ongoing commitment to assist aspiring CPAs, the NJCPA Scholarship Fund awarded more than $380,000 in scholarships to New Jersey high school and college students in April. More than 220 students applied for the awards, which included a Robert L. Garrity Award, named in recognition of his service as executive director of the NJCPA by the Council of Past Presidents. Garrity, a retired CPA, passed away on Jan. 13.

Out of 81 applications from high school seniors, 33 students with the highest scores were invited to interview, resulting in 16 winners selected to receive $7,000 four-year scholarships. For the college awards, 141 juniors and seniors applied, 72 were interviewed and 34 applicants were selected to receive $6,500 one-year scholarships. This year the college scholarship amount increased from $6,000 to $6,500. More than 65 NJCPA members volunteered to read essays and/or conduct interviews.

The Atlantic/Cape May, Bergen and Mercer chapters also presented awards in varying amounts to local students. All scholarship recipients were mailed their award certificates as the 60th annual scholarship ceremony was canceled due to coronavirus restrictions.

CONTRIBUTORS The NJCPA thanks all of the members and firms that contributed to the Scholarship Fund and particularly thanks the following firm benefactors: y Bowman & Company LLP y CohnReznick LLP y EisnerAmper LLP y Frazer, Evangelista & Company LLC y Mazars USA LLP y PKF O’Connor Davies LLP y Smolin, Lupin & Co. P.A. y Untracht Early LLC y Wilkin & Guttenplan PC y Withum

“It’s imperative to help the next generation of CPAs and those aspiring to have a career in accounting. It reminds us all to do our part and assist in any way we can. As always, I’m thankful for the generous support of our members,” said Ralph Albert Thomas, CPA (DC), CGMA, CEO and executive director of NJCPA. To date, the Scholarship Fund has supported more than 2,000 New Jersey students with more than $7 million in awards. For a complete list of this year’s winners, visit njcpa.org/scholarships.

CPA EXAM FEE LOTTERY The Scholarship Fund also awarded 10 aspiring CPAs last November in its inaugural CPA Exam Fee Lottery with $750 each going towards their CPA Exam fee costs. Whitman Business Advisors, a provider of strategic consulting for CPA firms, sponsored the lottery for the students.

NJCPA COO Ellen McSherry to Retire After 29 years of dedicated service to the NJCPA, Chief Operating Officer Ellen McSherry will retire effective May 31. McSherry will be succeeded

by Theresa Hinton, NJCPA director of member engagement.

McSherry has long been a driving force behind increasing membership, inspiring women to make their voices heard at the Society and in the profession and engaging with new and young members. Ellen joined the NJCPA as a member in 1985, eventually chairing the Scholarship and Student Programs Committee and serving as secretary of the Scholarship Trust. In 1991, she joined the NJCPA staff, where she oversaw the management of all programs that support the NJCPA’s strategic plan, mission and vision.

Ellen was instrumental in successfully restructuring the NJCPA’s governance structure and pipeline system for future NJCPA leaders. In addition, she assisted in creating the Women’s Leadership Forum, an online forum for

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MAY/JUNE 2020 | NEW JERSEY CPA

female NJCPA members to make meaningful connections.

“Ellen’s leadership in furthering the growth of the CPA profession and her commitment to assisting members has always been second to none,” said Ralph Albert Thomas, CPA (DC), CGMA, CEO and executive director at the NJCPA. “She will be missed by staff and members alike.”

McSherry has also been active in the community, currently sitting on three boards: Executive Women of New Jersey (since 2015), where she is the Membership Committee chair and member of the board; National Association of Corporate Directors (NACD) (since January 2019), where she is the chair of the Programming Committee and a member of the Audit Committee; and Montclair State University Foundation (since February 2018), where she is a board trustee and member of the Audit Committee.

Hinton will be bringing to the COO role a long history with the NJCPA

including an eight-year stint earlier in her career managing membership development and chapter relations as well as helping to direct operations.

More recently, she has more than nine years heading up NJCPA member engagement and chapter relations as well as acting as interim director of continuing professional education.

NEW JERSEY CPA | MAY/JUNE 2020

26

CLASSIFIEDS

MERGERS/ACQUISITIONS

Matthews, Panariello P.C., a well-established Bergen County firm located in Paramus, is looking to acquire small firms and sole practitioners ranging in size from $100,000 to $550,000. We are a full service, peer reviewed firm with a strong track record of client satisfaction and retention. We have been successful in prior acquisitions; let’s talk. Please visit our website at www.mpcpas.com.

To confidentially discuss this opportunity email us at pmanetta@mpcpas.com.

Monmouth County tax and wealth advisory firm seeking partnership or potential acquisition with CPA practice(s) in the Monmouth/Ocean County area. Seeking an additional source of recurring revenue to compliment your tax practice? Do you have a succession plan for incapacity or retirement? Contact Gregg at gshaw@ hstaxwealth.com, 732-268-8813; www. hstaxwealth.com.

Union County accounting and tax practice seeks growth through retirement-minded practitioners looking to transition toward retirement. Ideal annual billing should range from $250K to $750K, but would welcome all discussions. Please reply in strict confidence to gary@mlcpanj.com. To learn more about us, please visit www.mlcpanj.com.

PROFESSIONAL SERVICES

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Quality Review for CPA firms: audit, review, compilation; guidance in revenue recognition. Contact James M. Sausmer, CPA at 732-261-7710 or james.sausmer@ gmail.com.

Activate your CPA firm’s free listing in the Find-A-CPA web directory.

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NEW JERSEY CPA | MAY/JUNE 2020

27

MEMBER STORY

How Data and Analytics Helped One CPA Find Her Niche

BY KATHLEEN HOFFELDER, NJCPA CONTENT EDITOR

Sasha Pailet Koff, PMP, CPA, CGMA, knew data and analytics would be the wave of the future in accounting. From helping to build out the digital strategy for the U.S. Postal Service’s first web page to becoming senior director of global supply chain digital operations at Johnson & Johnson Services, Inc. in Bridgewater, Sasha has always been about data and analytics.

In this role, on a daily basis, Sasha incorporates data science and predictive modeling and analytics for the supply chain organization to seek out opportunities to improve the patient, consumer and customer experience, as well as drive revenue and cost improvement opportunities. “I work with everybody… from people on a plant floor, to data engineers and developers, to sales and marketing staff, to our finance departments all over the world… dealing with currency, tax and system models to be sure our customers have the products they want and need, while simultaneously driving profitability for our company,” she explains.

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MAY/JUNE 2020 | NEW JERSEY CPA

Data, analytics and predictive modeling is huge for the accounting profession, she adds. “When we think about forensic accounting, in particular, there’s a whole world of capabilities.” A CPA’s job is not just about the mechanics of running the books, she notes, it’s about understanding the financial performance and making sure the public has confidence in the financials that were compiled. “I see a huge need for those skillsets, and potentially more need because of the digital age in which we live.”

NEVER FAR FROM ACCOUNTING While Sasha saw value in an accounting background owing to her father running his own CPA practice in the greater New Orleans area, she was more fascinated by engineering while at The George Washington University.

She never entirely gave up on accounting, however, as she took the majority of her non-engineering elective courses in accounting. “If I look back on my college years, I think I actually built the futuristic CPA pathway. When I think about accounting or business acumen of the

future, I fundamentally believe folks who will succeed will have to balance the problem-solving acumen of an engineer and the sound fundamentals of the accounting background,” she explains.

Her career path is a testament to those beliefs. After consulting at Andersen Consulting and having the U.S. government as a client for three years, she ended up going back to graduate school full time and getting even more accounting courses under her belt. She eventually achieved her MBA from Columbia University, where she had her first introduction to working in a corporate environment. Earning a summer internship at Rohm and Haas, which is now Dow Chemical, was a great opportunity as was landing a job after graduating at Johnson & Johnson Health Care Systems, LLC, working for who else? A CPA. “My first job at Johnson & Johnson was in the strategic pricing group for North America.

My role included the oversight of rebates and warranty payments to customers in the U.S. and was akin to an internal audit function,” she explains.

From there, Sasha moved into a new business development role at Johnson & Johnson, looking at acquisitions and divestitures and understanding profit and loss. She subsequently ran commercial operations for Cordis, a Johnson & Johnson Company, and was responsible for everything from sales force compensation to new product launches, cash flow and supply chain operations.

LESSONS LEARNED Choosing the corporate environment over public accounting and consulting was never an easy decision. Her first consulting opportunities with Andersen Consulting taught her many lessons, as well as how much she valued seeing projects through from the planning stages to fruition. As a consultant, she gave tremendous recommendations, she said, but she never knew whether they were put into practice and in what timeframe they would be implemented. Being on the corporate side, she has much more skin in the game. “I also have the accountability of it working and seeing it through. That really intrigues me,” she says.

As the End of the New Jersey Triennial Approaches, Get High-Quality Education When and Where You Want it Remember to complete your triennial CPE credit requirement

by December 31, 2020.

60

in technical areas

4

in New Jersey law and ethics

24

in accounting and auditing (for CPAs in public practice)

Learn more at njcpa.org/triennial

The NJCPA is your go-to source for exceptional learning experiences and affordable CPE. SEMINARS

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CAMICO – A Preferred Provider of the NJCPA since 2007 “CAMICO’s exclusive commitment to CPAs, combined with extensive risk management knowledge and expertise, led the NJCPA to partner with CAMICO for the benefit of our members more than 13 years ago. Today, CAMICO continues to help New Jersey CPAs grow their practices by delivering outstanding support, services and resources.”

Ralph Albert Thomas, CPA (DC), CGMA NJCPA CEO & Executive Director

Why CAMICO? • For more than 33 years, CAMICO has been protecting CPAs with insurance solutions tailored to the professional services and concerns faced by CPA firms every day.

• Policyholders can call CAMICO as often as needed and consult with in-house experts on loss prevention, tax, and accounting and auditing issues — all at no additional cost.

• CAMICO’s depth of services for CPA firms is unmatched by other insurance programs.

• CAMICO policyholders have unlimited access to proactive loss prevention and potential claims assistance.

These are just some of the reasons why the NJCPA selected CAMICO as a preferred provider of Professional Liability Insurance.

CAMICO Representative Irene M. Walton Area VP, Affinity Manager T: 215.351.4765 E: irene_walton@ajg.com

Accountants Professional Liability Insurance may be underwritten by CAMICO Mutual Insurance Company or through CAMICO Insurance Services by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued. © CAMICO Services, Inc., dba CAMICO Insurance Services. All Rights Reserved.