New Jersey CPA - Summer 2023

VALUING CRYPTOCURRENCY AND DIGITAL ASSETS

ALTERNATIVE CPA FIRM STRUCTURES GAINING GROUND 125 YEARS OF NJCPA HISTORY

SPECIAL SECTION

RALPH ALBERT THOMAS, CPA (DC), CGMA Chief Executive Officer & Executive Director rthomas@njcpa.org

THERESA HINTON Chief Operating Officer thinton@njcpa.org

DON MEYER, CAE Chief Marketing Officer dmeyer@njcpa.org

RACHAEL BELL, CAE Managing Editor rbell@njcpa.org

KATHLEEN HOFFELDER, MA Senior Content Editor khoffelder@njcpa.org

DIANE ESPIRITU Senior Graphic Designer despiritu@njcpa.org

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125 Years of NJCPA History

In honor of the NJCPA celebrating its 125th anniversary, we’ve created a timeline of important, meaningful and interesting facts to commemorate the special moments that make up our history.

Valuing Cryptocurrency and Digital Assets

Not all digital assets are alike. While the Financial Accounting Standards Board’s exposure draft addresses fungible assets, CPAs need to use guidance on nonfungible tokens from the American Institute of CPAs. Audits provide their own challenges.

6 Alternative CPA Firm Structures Gaining Ground

Taking a closer look at new structures for growing accounting practices is on the minds of most accounting practice leaders. From novel partnerships to private equity splits, accounting professionals are looking for the most cost-effective means to operate and grow.

Getting to Know Ed O’Connell

BY KATHLEEN HOFFELDER, NJCPA SENIOR CONTENT EDITOR

The New Jersey Society of CPAs welcomes Edward G. O’Connell, CPA, CGMA, CFF, CFE, as its 2023/24 president. Ed is an audit partner in the Technology and Life Sciences practice at Withum. He replaced outgoing president Kathleen F. Powers, CPA, CGMA, PSA, CFO of Chelsea Senior Living, on June 1.

BUILDING THE PIPELINE

Ed took the presidential reins knowing what needs his attention the most — increasing the number of students and professionals going into accounting and becoming CPAs. That’s been a key focus for him since first starting out in the accounting profession, initially following in the footprints of his father, Edward W. O’Connell, CPA, (now deceased), a former managing partner at Wiss. Ed worked in public accounting at firms including EisnerAmper; Wiss; and Cowan, Gunteski & Co., P.A., and a 10-month stint at the Public Company Accounting Oversight Board (PCAOB) as an inspections specialist before settling in at Withum in 2010. He has been involved with boards of various lyme disease organizations and is currently an executive board member of the Global Lyme Alliance.

Recognizing the need to inform the younger generations about such a rewarding profession has been important for Ed throughout his career. “The pipeline is the biggest issue right now for the profession.

There are not enough candidates,” he admitted. While there is no one solution, O’Connell agrees that making accounting courses more prominent in high school could help. “We are losing the students who may want to take AP or higher-level math courses in high school unless accounting becomes on par with those classes. The fact that accounting is not in the curriculum that typically attracts students interested in math and technology at the highest levels is not helpful.” Knowing that his son, Ed (a junior studying accounting at Rider University), will be coming into a profession today that is much more data-driven, he noted, “It’s a good transition between the past and the future of the profession.”

Encouraging more mentoring is also a big part of building the pipeline, according to Ed, who was a mentor to Sarah Krom, CPA, MST, managing partner at SKC and Co. CPAs L.L.C. and the 2018/19 NJCPA president. Due to his father’s involvement in the NJCPA, Ed has had many mentors himself. Because of the NJCPA, he worked with several past presidents and countless members.

THE EARLY YEARS

With his father’s successful accounting reputation, and with parents who met while working at Price Waterhouse (now PwC), it was only natural to expect Ed to go into accounting. His first known memories of the Society date back to its events in the 1970s. “People would think we are all

competing with each other. To me, the Society really was a big family of people who cared about each other and called each other to request or offer help to one another,” he said.

But accounting wasn’t a done deal from the start. He originally studied drama in high school, was captain of the chess team and performed a lot of magic. “When I was graduating high school, I wanted to go to New York and get involved in theater. But my dad instilled in me to get a degree and have something to fall back on,” he said.

When he finally set a course for accounting, he made sure to steer his own path. In fact, according to Ed, his first job was in Toms River, south of his family’s home near Metuchen. “It’s the only job that didn’t ask me about my dad,” he admitted. Sitting in his office at Withum, he realizes he made the right decision.

And true to his love for magic, he kept on performing — though mostly for his wife, Tammy, and children, Ed, Kayla and Joey, when they were growing up. “When we would go on trips, they would ask, ‘what’s the magic angle? Is there a store, a show or club here?’” Today, while he is not actually practicing magic, he is still involved in magician societies, collects magic memorabilia and advises other magicians. Having studied all kinds of magic, he remarks, “I enjoy it in my spare time.”

Learn more about Ed at njcpa.org/ about/board.

New Jersey CPA (ISSN 1534-6692)

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.

VALUING CRYPTOCURRENCY AND DIGITAL ASSETS

By KENNETH A. HEASLIP, CPA, CGMA, MBA, MS CULLARI CARRICO LLC

While the profession awaits formal accounting guidance from the Financial Accounting Standards Board (FASB), the American Institute of CPAs (AICPA) established the Digital Assets Working Group. The Group has issued nonauthoritative guidance for accountants and auditors: a 2020 comprehensive practice aid and subsequent periodic updates. The most recent aid — which can be accessed by AICPA members for free at aicpa.org — was issued Feb. 28, 2023, and is 81 pages long.

As more companies invest in digital assets, they are looking to CPAs to help them with the accounting treatment — and CPAs are looking for guidance on how to audit such investments. To date, there has been little authoritative guidance on the issue.

On March 23, 2023, the FASB issued a much-anticipated exposure draft proposing standards for the treatment of crypto assets. Comments are due by June 6, 2023, and it is hoped the final standard will be issued by year end.

ACCOUNTING TREATMENT

When the AICPA assessed the accounting treatment, they addressed several questions:

y What type of asset is a digital asset?

y Should it be carried at cost or fair value?

y How should impairments be determined?

While most people consider cryptocurrency to be an investment, there are significant differences between financial instruments and digital assets. The primary difference is that financial instruments are backed by a government or business entity. The entity has revenues, income and net assets that support the instrument’s value. Digital assets do not provide the asset holder with any enforceable rights to, or claims on, underlying goods, services or other assets. For that reason, digital assets are classified as intangibles.

Under Generally Accepted Accounting Principles (GAAP), intangibles are valued at cost, those with a useful life are amortized over its life and they are tested annually for impairment. This has led the AICPA to conclude that digital assets would be treated the same; since there is an indefinite life, they should not be amortized. When impairments are recognized, the asset should be written down and recovery of impairments will not be allowed.

When the FASB took on the digital asset project, it quickly realized that not all digital assets are the same. They decided to limit the project to fungible assets, not address nonfungible ones, and to rename the topic as crypto assets. Fungible is defined as an item that is readily interchangeable with an identical item at a transparent rate. Under this definition, nonfungible assets such as nonfungible tokens (NFTs) are not within the scope of the exposure draft. For NFTs, accountants should continue to use AICPA guidance. The FASB’s proposal follows the AICPA conclusion that crypto assets should be recorded as indefinitelived intangible assets. However, unlike other intangibles, they will be presented at fair value, limiting the need for impairments.

The FASB proposes that any changes in fair value of crypto assets be recognized in net income. Transaction costs to acquire them would be treated as an expense when incurred unless applicable industry-specific guidance requires capitalization of such costs. Crypto assets must be presented separately from other intangible assets on the balance sheet, and changes in fair value are to be shown separate from other intangibles on the income statement.

The FASB recognizes that there will not be many changes to the statement of cash flows, but if crypto assets are received as noncash consideration in the ordinary course of business and converted immediately into cash, the transaction should be recorded as cash flow from operating activities.

The exposure draft provides for disclosures of the nature of the crypto asset, the presentation of fair value and cost either in the aggregate or individually, depending on the materiality. Any restrictions should be disclosed, and rollforward information will be required. The disclosures should disclose the line item in the income statement where gains and losses are presented. Finally, the disclosures should include the difference between sale price and the cost basis as well as a description of the activities that resulted in the disposition and the method for determining cost basis.

The new standard will apply to all entities, and the implementation date has not been determined. Cumulative-effect adjustments to retained earnings will be necessary as of the beginning of the annual reporting period of adoption.

AUDITING ISSUES

Auditing has unique challenges. The nature of digital assets makes it difficult for an auditor to confirm their existence, value the less-traded assets and determine internal controls. The demise of FTX Trading Ltd. is a perfect example of the risks associated with audits. In that case, entities deposited their cryptocurrencies with FTX for secured holding. FTX regularly reported portfolio status to their depositors. The controls and reporting turned out to be poor and false. FTX comingled depositor assets with that of their own, improperly withdrew the deposits and lost millions of dollars in depositor assets. To date, it has not been determined who took the assets and where they are now. Any confirmations offered by FTX are unreliable.

For entities that choose to hold the assets in their own wallets, it is not practical to obtain third-party verification of the assets due to the secrecy of the blockchain method of storing the assets.

The AICPA states that audit risks should be addressed in client acceptance and continuance, risk assessment and processes and controls, laws and regulations and related parties. Their guide is a comprehensive approach for auditors. It consists of the following:

y Overview

y Auditor skill sets and competencies

y Management skill sets and competencies

y Management integrity and overall business strategy

y Processes and controls, including information technology

The AICPA document is titled as an aid for auditors, but it also has implications for nonattest services offered by practitioners. Practitioners should evaluate self-review, management participation and advocacy threats before accepting a client.

Auditors need to stay apprised of regulatory, industry, technological or financial reporting developments. In particular, they should identify relevant professional standards that apply to the engagement. The firm should maintain a competent staff at all levels. Risks should be adjusted as new issues are identified, and training should be continuous.

Firms should develop specific procedures that will address the many challenges in digital assets. The procedures should encompass all areas such as identifying policies and procedures, building awareness among firm personnel, communication, training and quality control.

The AICPA practice aid is an excellent tool for any entity with digital assets and firms that service those entities. It is thorough and offers a framework for firm quality control procedures. The document is an important non-authoritative tool. The FASB’s proposed changes will be welcomed by many stakeholders, but until the ASU is issued, the provisions in the draft are not GAAP and should not be implemented.

Kenneth A. Heaslip, CPA, CGMA, MBA, MS, is a director at Cullari Carrico LLC, CPAs, managing member of Kenn Heaslip Seminars LLC and a lecturer at Queens College. He is a member of the NJCPA and can be reached at kheaslip@comcast.net.

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CRYPTOCURRENCY KNOWLEDGE HUB

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ALTERNATIVE CPA FIRM STRUCTURES GAINING GROUND

By DR. SEAN STEIN SMITH, CPA, DBA, CMA, CGMA, CFE CITY UNIVERSITY OF NEW YORK — LEHMAN COLLEGE

Pipeline concerns, the increasing use of automated accounting work and the demand for non-traditional financial reporting are leading accounting professionals to seek out competitive advantages, such as alternative structures.

PRIVATE EQUITY

Private equity (PE), as well as other alternative investors, have made their presence known in the accounting profession, and there continues to be much discussion around the alternate ownership of CPA firms. While some may be content that PE has finally taken a look at the accounting profession, this involvement is something that should be undertaken only after carefully weighing the pros and cons of doing so.

At a fundamental level, PE firms have much higher earnings expectations — with doubledigit returns being the norm rather than the exception — and almost always have an exit strategy and timeline from the start. Pressure to reduce costs and grow revenue can often take partners or other firm leaders by surprise, and it needs to be planned for accordingly.

We are currently seeing the tip of the iceberg related to private equity. The concept of moving from a merger transaction where there typically is no money exchanged at closing, to one where there is cash up front, is starting to become the norm. This can be very exciting for CPA firms that are looking to transition. PE has already entered many CPA firms clients’ industries. Private equity and other strategic investors in the accounting industry will continue to grow for the foreseeable future.

PARTNER WITH NON-CPA FIRMS

Strategic partnerships other than PE are also becoming common. See chart 1. These can be a way to build out service lines and typically are turnkey. The strategic partner usually has invested the necessary capital, is passionate and is expertly knowledgeable around the new service lines. The only requirement is for the typical CPA to think differently about what and who they bring to the client relationship and how they will operate.

BUILDING OUT NEW SERVICE LINES

Expanding and building out new service lines is also an option for growth. These service lines can include environmental, social and governance (ESG) reporting, other types of non-financial reporting, cybersecurity considerations, fractional CFO offerings and other client accounting services (CAS) packages.

EXPANDING NON-ATTEST SERVICES

Increasing non-attest services is not necessarily new in and of itself but the reality is that clients are in need of an increasing number of non-attest services. Technology tools have finally developed enough to allow practitioners to offer those services. Most common is the alternate practice structure where all attest services are segregated under a separate entity. This helps especially where you have states that prohibit the ownership of CPA firms by non-CPAs. For tax and other advisory services, there is no requirement that the firm register as a CPA firm.

There is no shortage today of issues that founders, partners and staff at all levels of accounting firms need to keep an eye on.

PHILIP J. WHITMAN, CPA, CEPA WHITMAN TRANSITION ADVISORS LLC

Regardless of the kind of alternative structure being considered, CPA firms need to be diligent and do their homework before embarking on ways to increase revenue growth.

Dr. Sean Stein Smith, CPA, DBA, CMA, CGMA, CFE, is a professor at the City University of New York — Lehman College. He is a member of the NJCPA Board of Trustees, participates on several interest groups and can be reached at sean.steinsmith@lehman.cuny.edu. Philip J. Whitman, CPA, CEPA, is the CEO of Whitman Transition Advisors LLC, an NJCPA member benefit provider. He can be reached at pw@ whitmantransition.com

READ MORE FIRM MANAGEMENT KNOWLEDGE HUB

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CLIENT ADVISORY SERVICES KNOWLEDGE HUB njcpa.org/hub/cas

DO MORE NJCPA MEMBER BENEFITS OFFERED BY WHITMAN TRANSITION ADVISORS njcpa.org/marketplace

LEARN MORE Aug. 3, Live Webcast FIRM GOVERNANCE, BUY INS, BUY OUTS AND PARTNER AGREEMENTS njcpa.org/events

TRANSITIONING TO A NEW BUSINESS MODEL

According to a March 2023 Journal of Accountancy article, there are five steps a firm should take when considering a change to its business model.

1. Review the firm’s operations and business strategy.

2. Reassess the firm’s relationship with talent.

3. Reevaluate governance structures.

4. Reconsider client service offerings and billing model.

5. Rethink how the firm leverages technology.

Read the full article at journalofaccountancy.com/ news/2023/mar/is-it-time-forfirms-to-transform-their-businessmodel.html.

Finding Value in the 150-Hour Requirement

BY SARAH L. O’ROURKE, CPA, RUTGERS BUSINESS SCHOOL

In contemplating the 150-hour requirement for licensure — if and how the rule benefits both CPA candidates and the profession — it’s important to note that it’s also part of a larger discussion around the decline in the CPA pipeline and accounting program enrollments in general. It seems there’s no better time to be an accounting student — you are in high demand! But the trend is troubling for the accounting profession itself.

So why does the 150-hour requirement exist and what value does it provide? I assume that, at least in part, the thoughtprocess behind the rule initially was that accounting students should acquire additional knowledge which would prove useful in their future careers. But how has this scenario played out over the years? How do students choose to complete these credits?

OPTIONS FOR STUDENTS

Students have various options for completing their 150 credit hours, including the following:

y Earning Advanced Placement Credits

Some students come to college with so many advanced placement (AP) credits from high school that the 150-hour requirement is barely a concern. This is a positive situation, because the AP credits free up time for students to focus on other useful courses in college — courses that will hopefully best prepare them for the professional world.

y Completing a Double Major or Other Additional Credits as Undergraduates. Students who don’t have significant AP credits can still figure out ways to complete the 150 hours during their undergraduate years. These students may take an extra class each semester or take advantage of summer and winter session offerings. Some even choose to pursue a double major. The benefit here is the additional knowledge gained — for example, a double major means a wider skillset. However, cramming 150 credits into four years could mean students are not getting the most from their education. While some excel at this pace, others struggle and barely get by with mediocre grades. In addition, some students don’t pursue a double major or even take additional business credits; some complete the 150-hour requirement with nothing but random classes. While this certainly is a means to an end, it’s difficult to see the value in this approach and how it will benefit students in their professional careers.

y Pursuing a Graduate Degree. Some students choose to pursue the extra 30 credits in the form of a business-related graduate program. After all, why not turn that effort into a degree? This is the pathway I chose in completing my 150 hours, and I have never, not even for a day, regretted the decision. It has opened so many doors for me. The downside is that a graduate degree can be too expensive or time-consuming for some.

SUPPORT FROM THE PROFESSION

Given these potential options, how can we best support CPA candidates on their pathway to licensure? Most importantly, we need to provide candidates with a route to complete these credits — not just to get them done, but to turn them into something valuable.

I am often puzzled when I hear that some CPA firms uphold a policy where job

candidates must complete their 150 hours before starting full-time work. While I understand new employees must be ready to work plenty of hours, this also seems like a short-sighted approach and detrimental to the profession in the long term.

Perhaps we should consider the bigger picture and the enduring value in making these credits meaningful. For example, courses often become more meaningful once you have some work experience under your belt, and doing a graduate program part-time in the evenings while working could be an ideal solution. In a profession where an ever-increasing skill level is demanded, we should encourage candidates to get the most value possible from these additional courses. Otherwise, the 150-hour requirement, in my opinion, could make the profession more difficult to enter, without providing any real benefit to the profession itself.

READ MORE ISSUES IMPACTING THE CPA PIPELINE njcpa.org/pipeline

WATCH MORE HELPING STUDENTS MEET THE 150-HOUR REQUIREMENT

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Sarah L. O’Rourke, CPA, is an assistant professor of professional practice in the Department of Accounting & Information Systems at Rutgers Business School-New Brunswick. She is a member of the NJCPA and can be reached at slilley@ business.rutgers.edu

Rebranding Accounting and Engaging Students in the Classroom

BY PETER C. DESARNO, CPA, MBA, MS, BLOOMFIELD COLLEGE

THE EDUCATOR’S ROLE

As an accounting professor, it’s my teaching philosophy to appeal to both the mind and the heart — it’s critical to not only teach but to inspire. In addition to imparting subject knowledge, there is also a responsibility in the classroom to provide students with perspective, motivation and confidence. A growth mindset and a can-do attitude is especially important when teaching accounting.

25-year professional career, which included working in public accounting and as a controller for public, private and nonprofit organizations, provides students with the real-life perspective that they crave and find engaging.

Many CPAs have experienced first-hand in their own recruiting efforts the shortage of students entering the accounting profession. Many have provided their thoughts about how best to address this critical issue. In this article, I will share my perspective as an educator about what can be done on the front lines — in the classroom — in order to rebrand accounting and fully engage students.

ROOT CAUSES AND NEGATIVE STEREOTYPES

There are a number of reasons typically cited as the root cause for this situation, including:

y The time commitment involved in fulfilling the 150-hour credit requirement

y The challenge of passing the CPA Exam

y The reputation of the profession for working long hours

This is compounded by a number of negative stereotypes and myths such as:

y Accounting is not interesting.

y You need to be gifted in math to be an accountant.

y Accountants spend all of their time working on spreadsheets and crunching numbers.

Needless to say, a rebranding of our profession’s image is needed.

It’s critical to set the tone right from the start in the two introductory Principles of Accounting classes. In doing this, students will immediately become engaged and the process will begin of fanning the flame for their passion to pursue a degree in accounting and possibly become a CPA.

Another aspect of these introductory accounting classes is that you typically have other business majors who are required to take the class as part of their business core. To quickly engage these students as well, I begin my first class session with a simple question: “Tell me your dream job.” This shows the students that I want to take the time to learn about them. I also want to know their aspirations so that I can pitch the examples that are used in future classes towards their interests. Finally, this exercise is conducted in order to show each student the value that learning accounting will have on their own careers, no matter what business discipline they are ultimately pursuing. After we go through this exercise, each student knows that understanding accounting is essential for their future success as it is the language of business.

As the semester continues, in addition to achieving the desired student learning outcomes for the class, it’s also important that students begin to see the world through “an accountant’s eyes.” Being aware of their activities and transactions they have throughout their day allows them to apply the concepts being learned in the classroom. In addition, sharing experiences that I have had over my

It is also critical to be cognizant that students come from different backgrounds, have varied life experiences and learn in different ways. It’s important to employ a variety of teaching methods and approach a topic from a number of perspectives. My students particularly enjoy it when I role play a real-life situation that I’ve had as an auditor or controller. Beyond simply memorizing the material from a book, the students can understand how the concept being taught can be applied. This is where the magic happens. This is where accounting is rebranded in the classroom, negative stereotypes are dispelled and this wonderful profession begins to come alive!

All of us — CPAs, firms, accountants in all industries, professional organizations, educators — have an important role in helping to attract a new generation of accountants and increase the pipeline of students entering the profession. Whether it’s being an advocate for the profession, a mentor or simply telling your story, these actions will impact students by helping them begin to understand the tremendous opportunities that this profession affords.

Peter C. DeSarno, CPA, MBA, MS, is assistant professor and coordinator of accounting at Bloomfield College. He is a member of the NJCPA and can be reached at peter_desarno@bloomfield.edu

8 Business Exit Options

BY ERIC L. DEGEN, CPA, CGMA, CEPA, LPBC, CMEC, TITAN BUSINESS DEVELOPMENT GROUP, LLC

There are a variety of strategies to consider when planning a business exit. Here are some of the pros and cons of the eight most common internal and external options. The right exit strategy for a particular business depends largely on the individual needs of the business owner and the current state of the business.

INTERNAL TRANSFERS

y Intergenerational Transfer. Transferring ownership to a family member is a popular option for the preservation of an owner’s legacy and to provide opportunity for the next generation of family members to take over the business. Pros include lower costs, more control over the process, reduced disruption and high buyer/seller motivation. Cons of this strategy could include a lower overall sales price, a disruption in family dynamics, lack of funds/an illiquid buyer and the risk of flight by key employees.

y Management Buyout. In this type of transfer, the owner sells all or part of the business to the company’s management team. Management typically uses the assets of the business to finance a significant portion of the purchase price. This route provides highly motivated buyers, the preservation of human capital and continuity. Disadvantages may include potential management “sandbagging,” heavy seller financing, managers who may not be entrepreneurial and a threat of flight (coercion of owner).

y Sale to Existing Partners. In this scenario, success is closely linked to the existence and quality of a buy-sell agreement. This has the advantage of being planned and less disruptive. This type of sale is controlled and has well-informed buyers. On the downside, this may yield a lower sales price and slower payment terms. Competency gaps and restrictions baked into the agreement are also considerations.

y Employee Stock Option Plan (ESOP). This is a common vehicle for gradually transitioning a business to employees over time. This often prompts employees to think more like owners and can be used for attraction and retention. The business stays in the “family” and they have favorable tax treatment. However, it can be complicated, expensive and compel the company to buy back shares from departing employees.

EXTERNAL TRANSFERS

y Sale to a Third Party. In this type of transfer, the business is sold to a strategic buyer, financial buyer or private equity group through a negotiated sale, controlled auction or unsolicited offer. Advantages include a higher sales price, more cash up front, stability in deal terms and overall cost-effectiveness. It can also inject renewed energy into the business. However, the process is long (nine to 12 months). There can also be privacy concerns and it can be emotional, complex and often include post-sale tie-downs.

y Recapitalization. This method basically finds new ways to “fund the company’s balance sheet” by bringing in a lender or equity investor to act as a partner in the business. Under this option, one can sell a minority or majority position, allowing for a partial exit and the ability to “take a second bite of the apple” later. It can also be used in conjunction with other exit options. However, the transaction can be slow, expensive relative to its benefit and there is a continuing accountability to partners along with a loss of control.

y Orderly Liquidation. In this process, a business is shut down relatively simply and quickly. It can make sense if asset values exceed the ability of the business to produce the income required to support it as an investment (going

concern). It can be efficient and less expensive than other exit options. Nonetheless, the proceeds are typically uncertain, there is no goodwill value, it is emotional, it damages employees and jobs, it often carries a stigma and taxes may be higher, particularly for C corporations.

y Taking the Business Public (IPO). This is an option for some business owners. It can be a way to maximize their return on investment and receive a large payout by allowing the company to access capital from public investors. However, going public can be a long, complex and costly process, possibly resulting in the owner relinquishing control of the business.

There are a variety of business exit options available, even beyond the ones covered in this article. The right option for a particular business depends on the individual needs of the business owner and the current state of the business.

Eric L. Degen, CPA, CGMA, CEPA, LPBC, CMEC, is a principal at TITAN Business Development Group, LLC. He is a member of the NJCPA and can be reached at edegen@TitanBDG.com

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CONTROLLERSHIP SKILLS UPDATE: MERGERS, ACQUISITIONS AND ALLIANCES

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Building a Culture of Commitment and Accountability

BY RICH McLAUGHLIN, McLAUGHLIN CONSULTING SERVICES AND PRIMEAST LIMITED

As someone who works with leaders around building cultures where people want to fully show up to work each day, I get questions about “commitment” and “accountability” quite a bit. While there is no single practice that gets you there, there are some that help and some we need to abandon. I like to use the continuum below to get a sense of where a majority of the people are in the organization I’m working with. The usual answer from clients ranges from begrudging compliance to commitment.

why just once may not be enough. It is also about helping staff understand the big picture and how what you’re asking them to do fits into that picture.

FORGET THE CARROTS

There are still a number of organizations that think employee retention and engagement is all about the “carrots” — rewards and recognition. We need to get away from the extrinsic motivators (e.g., bonuses, perks) and leverage intrinsic motivators more. According to Dan Pink, (ted.com/ talks/dan_pink_the_puzzle_of_motivation) we need to tap into three intrinsic motivators:

y Purpose: the degree to which people feel connected to the work they do and how it serves the greater community

y Autonomy: the degree to which we give people room to do the work in a way that allows them to express their unique personality

y Mastery: the degree to which people feel they can deepen and broaden skills they feel are important

BE MORE PERSONAL

Probably the best — but most difficult — way to create a culture of commitment and accountability is to make our workplace more personal, not less. This challenges those in leadership positions to “go first” — to be more personal and transparent, to care enough about the people working for them to want to know about their personal lives. Leaders can be personal and still hold people accountable.

A caution about making things more personal: You can’t mandate any of this. You can only invite people to participate. Make it clear that not participating is perfectly fine. As more people come around to the idea, they will influence many of the rest to come along.

My last caution to leaders is to not take this all on yourself. Everyone contributes to the prevailing culture, so challenge employees to step up and help out. This quote by Peter Block sums it up well:

I also ask clients if “compliance” is good enough for their business model, because if it is, that is certainly easier. Real commitment is harder, and many leaders are finding that to recruit and retain good talent these days, they need to do more than just push for compliance. Commitment requires leaders to stop caretaking AND employees to step up more. So, how do we get there? Here are four practices that help, from easiest to do to more difficult.

GIVE PEOPLE THE “WHY”

This is so simple; I‘m surprised to still hear from people inside organizations: “We’re often told the what, but sometimes we’re not told the why.” This is unfortunate, especially because it takes very little effort, and leaders must understand that telling them

Of the three intrinsic motivators above, I think purpose has the most power and is probably the least leveraged. Lately, I find I am advising companies on how to onboard people effectively and connect them to the company’s purpose right away.

BRING FORWARD WORTHY QUESTIONS RATHER THAN ANSWERS

When it comes to strategies to move the organization forward, smart leaders are realizing they need to take the right question to people inside the organization and challenge them to discover the best response — a “design thinking” approach. This approach has the double benefit of less stress on leadership and more engaged staff who are given an opportunity to shape and influence the direction of the organization.

“There is the dominant belief that leadership should come from the top and bosses are in some way responsible for their employees’ performance and morale, much as loving parents are responsible for their children. Holding on to this line of thought represents the choice of dependency over empowerment. Empowerment means that each member is responsible for creating the organization’s culture, for delivering outcomes to its customers and especially for the quality of their own experience. This is the adventure…”

Rich McLaughlin is the principal of McLaughlin Consulting Services, a senior consultant/trainer with Primeast Limited and the author of several books. He can be reached at rmclaughlinnj@gmail.com

Developing the Next Generation of Leaders

BY ROBERT J. TRAPHAGEN, CPA, CGMA, TRAPHAGEN CPAs & WEALTH ADVISORS

With a demand for services at an all-time high and a decline in the number of people entering the accounting profession, attracting, developing and retaining the next generation — Generation Z (GenZ) — is crucial to the success and sustainability of CPA firms.

Gen Z is the demographic cohort following the Millennials. Born between 1997 and 2013, they are the first generation to be born into technology. Initially, this generation was branded as the “iGeneration” with information and connectivity at their fingertips.

Gen Z traits can be traced to the 2008 recession, which fosters their entrepreneurial vision. In a survey, 72 percent of Gen Zs indicated they would like someday to start a business. Gen Zs want to bring value and change to the workplace. They define themselves by their work; they desire an independent, flexible work environment; and they seek innovative training strategies. By 2025, Gen Zs will account for approximately 27 percent of the workforce and are positioned to become a major catalyst of change in their future workplaces. This generation focuses on the use of social and emerging technologies and expects firms to provide robust learning and development programs, as well as a different workplace culture to attract and retain them. Research shows that Gen Z associates value:

y Emerging technologies

y Flexibility in the work environment

y An entrepreneurial vision

y Culture, culture, culture

When asked about factors that are important in the workplace, one of our firm’s Gen Z associates, Nicole L. Garcia, an accountant and an Affiliate member of the NJCPA, said, “1) flexibility, 2) learning and developing with growth opportunities and 3) firm culture.”

She added, “I want to know there is a clear career path to be successful in my career, but I also want to have a social

life. I want to know that with the right technology I can get my work done from anywhere…including the beach!”

I also have personal knowledge of this generation thanks to my entrepreneurial son, a Gen Z college sophomore who is already thinking about his future impact in the workplace.

ATTRACTING GEN Z

Gen Z candidates will review your online presence before they make any career decision.

Our most recent hires shared that what distinguished us from other firms was our “50 Acts of Kindness” presented on our website and social media platforms. This specific campaign was launched in celebration of our 50th anniversary to highlight our firm’s history of giving back to the community. This was a significant influence in their decision to join the firm because they felt our social responsibility aligned with their values.

To appeal to Gen Z, your firm should:

y Share your story and state your firm’s purpose online

y State your vision, mission and values

y Highlight how your firm gives back to the community

PROVIDING PROFESSIONAL DEVELOPMENT

The best leaders show team members the potential that lies ahead and create pathways to success.

Gen Zs are entrepreneurial and ambitious; therefore, creating a work

environment that promotes growth is essential. Firms need to demonstrate how they invest in their associates’ development. Our firm has adopted a Competency Performance Management (CPM) model that establishes personal and professional goals and objectives. This incorporates a learning environment with individualized training that represents a vision of success.

To foster the development of associates, firms should:

y Adopt a CPM model or other development plan

y Establish a learning environment

y Embrace individualized mentoring

ENGAGE AND RETAIN

Gen Zs value engagement and inclusion with an emphasis on a healthy work environment and flexibility.

The culture of a firm is centered around whether an associate feels valued, supported and truly part of the team. It is the culture of a firm that will dictate retention.

For optimal engagement and retention, firms should:

y Encourage engagement and inclusion

y Offer flexibility

y Provide wellness programs

As Gen Zs continue to enter the workforce, it is imperative that firm leaders embrace the value of this new entrepreneurial generation and recognize their potential impact as key to their firms’ success!

Robert J. Traphagen, CPA, CGMA, is the managing partner of Traphagen CPAs & Wealth Advisors. He is a past NJCPA president, a member of several interest groups and can be reached at robert@tfgllc.com.

Key Metrics Construction Companies Should Watch

BY SALVATORE M. SCHIBELL, CPA, CFP®, CGMA, MBA, MS, LAWSON, RESCINIO, SCHIBELL & ASSOCIATES, P.C.

Key Performance Indicators (KPIs) measure how well a business performs compared to its objectives. The most common KPIs construction companies watch include the following:

y Profit. Key profitability ratios include the return on assets (ROA), which indicates how well assets are utilized to generate profits, and return on equity (ROE), which measures the profitability of a business in relation to equity. Gross profit margin shows the amount of profit made before deducting selling, general and administrative costs, whereas net profit margin reflects how much of each dollar earned is actual profit.

y Costs. Construction projects often have tight budgets, which makes cost management critical. Contractors can use KPIs such as cost per square foot, cost of materials and labor costs to track and manage project costs. Cost variance (CV) should also be measured. It is the difference between the actual cost of a project and the planned budget.

y Cash Flow. Positive net cash flow shows the company is bringing in more than it spends. Conversely, negative net cash low typically means the business spends more cash than it makes. Contractors use net cash flow to measure money moving through a business during a specific period, and projected cash flow to provide a forward-looking view of money that will enter and leave a business.

y Performance. These KPIs include average revenue per hour worked, percentage of labor downtime, percentage of equipment downtime and waste/ recycling per job. Percentage of labor downtime helps businesses calculate productivity on a construction project.

y Quality. Delivering a quality product can help contractors grow and make greater profits. KPIs that measure quality

on the job are the number of defects, number of defects due to workmanship, time to rectify defects, number of site inspections conducted, the ratio of the number of inspections passed to the total number of inspections, the total cost of rework and customer satisfaction.

y Safety. Safety metrics can help reduce insurance and legal costs while keeping employees and subcontractors productive. Important construction safety KPIs include safety/incident rate, number of safety meetings/communications and number of accidents per supplier.

y Employees. Happy employees are typically more productive than disgruntled workers. Therefore, KPIs like worker satisfaction, training completion percentage and turnover rate can help contractors retain workers and identify opportunities to improve productivity.

y Work-In-Progress (WIP). WIP shows the status of a construction project: whether it is on budget, overbilled or underbilled as compared to the project timeline. There are several vital ratios relating to WIP that contractors should watch: contract gain/fade, underbillingsto-equity, underbillings-to-working capital, overbillings-to-cash, total job borrow, total backlog and total backlog gross profit. Creditors and banks use WIP reports to understand a contractor’s profitability. This can significantly impact a contractor’s ability to secure financing, bonding and lines of credit for projects.

Leading KPIs predict where the company is likely to go while lagging KPIs measure what has already been achieved. For example, labor productivity is a leading indicator of job profitability. Net profit, gross profit, current ratio and accounts receivables (AR) turnover are examples of lagging KPIs. Burn rate is a lagging indicator as it describes how much money

is spent (or lost) for any period. Runway is a leading indicator as it predicts how long cash would last with a specific burn rate.

CFMA BENCHMARKS

The Construction Financial Management Association (CFMA) conducts an annual survey so that contractors can compare their financial performance to others in the industry. Its 2022 Annual Financial Survey found profitability measures were strong for most companies during 2021. Return on assets (ROA) grew from 13 percent in 2020 to 15 percent in 2021, and return on equity (ROE) was up 6.5 percentage points at 36.1 percent from pre-pandemic (2019) levels. The survey findings are available at cfma.org. Construction contractors can also purchase CFMA’s Financial Benchmarker to compare their financial performance against similar company and industry data. Benchmarking is essential to help contractors make strategic decisions, improve productivity, reduce costs and increase profits.

Watching KPIs is crucial to a contractor’s success. KPIs will help identify problems before they become issues and show contractors where there are opportunities for growth.

Salvatore M. Schibell, CPA, CFP®, CGMA, MS Taxation, MBA, is the tax partner at Lawson, Rescinio, Schibell & Associates, P.C. He is a member of the NJCPA and can be reached at salschibell@ lrscpa.com.

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Aug. 30, Live Webcast

CONSTRUCTION CONTRACTORS: CRITICAL ACCOUNTING, AUDITING AND TAX ISSUES

Aug. 9, Sept. 7 and additional dates, Live Webcast

CONSTRUCTION CONTRACTORS: ACCOUNTING AND FINANCIAL REPORTING ISSUES

njcpa.org/events

Piercing the Corporate Veil

BY ALLISON GREENFIELD, MBA, CPA, CFE, FORENSIC RESOLUTIONS INC.

Many business owners believe they are separate from their company and cannot be held liable for the company’s actions. However, a court may attempt to pierce the corporate veil and hold an individual — a shareholder or director — liable for a company’s actions or debts by delving beyond the limits of limited liability to potentially hold the shareholders liable for any debts.

This can occur when a company states they are unable to pay an agreed-upon expense, such as rent or legal costs associated with a lawsuit and the company has not been operating as a separate entity from the individual. The individual will attempt to hide behind the company to evade personal liability for the actions they take on behalf of the company. Typically, these companies are identified by being undercapitalized, having daily involvement by a parent company or not meeting corporate formalities. The company and individual may be comingling their assets and liabilities, which is the equivalent of treating the company’s money as their own.

With these matters, documentation and communication are the most important parts of understanding the operations of the respective entities. Explaining why certain documents are important, and what they show, can be difficult to communicate to non-accountants. People without financial backgrounds may not understand how individual transactions are expected to occur in the company’s regular business or if something questionable is occurring. Many companies have loans with shareholders/ directors, and they may even pay them for different services. Money being passed in this manner may not necessarily be comingling; however, it is certainly something that needs to be examined in more detail.

The main question to ask when examining a piercing-the-corporate-veil matter is: Does the company have transactions with the subject individual/related parties where the subject individual has control? Then, a subsequent question: Are the transactions being treated properly or is it comingling?

GATHER DOCUMENTATION

The most important documents or information required in these types of cases are the underlying accounting records, specifically the general ledger. Financial statements, such as balance sheets, show whether loans exist between related companies or shareholders. Companies are permitted to have loans and transactions from related parties, but they have to be handled at arm’s length and recorded properly. The transactions themselves are not direct evidence that comingling exists, but rather it is the treatment of those transactions that will determine if comingling exists. General ledger transactions show the nature of the loans and transactions rather than just seeing the account they end up in.

Audited financial statements with notes can provide important information as well. These statements should discuss related parties. But again, related-party transactions are not evidence.

Bank statements and supporting accounting records, such as invoices and checks, do not show how the company is recording their transactions. However, with the general ledger, one can connect the bank statements and supporting accounting records to the related transactions to show that they are either appropriate or support comingling. Having transfers between the company and individual is not evidence, but rather a caution flag.

ANALYZE RECORDS

Assuming the general ledger has been provided, it is now time to analyze the

records. Are the records showing comingling and improper accounting, or are they showing that the companies or individuals are being treated as separate entities? Comingled entities might show money coming in and going through accounts that close out at the end of each year.

For example, if a bank account that is linked to the individual keeps having money from the company going in and out of it, there would be questions related to the nature of those transactions. Are they related to a loan or is it because the individual needs money? In other words, is it legitimate business activities or comingling?

In any matter, communication is key. If something looks questionable, it is not necessarily a red flag, more like a yellow flag that requires more investigation. Just because a company has a relationship with a related party does not mean they are comingling funds; it is just something to investigate further. The treatment of the transaction is more telling than the underlying relationship.

Allison Greenfield, MBA, CPA, CFE, is a senior associate with Forensic Resolutions Inc. She can be reached at agreenfield@forensicresolutions.com

Deciphering Crypto Tax Issues

BY NICHOLAS J. YOUNG, CPA, WAGMI.TAX LLC

As the world of cryptocurrency and decentralized finance (DeFi) continues to evolve, it’s important for accountants to stay informed about the tax implications of these new technologies.

First and foremost, it’s important to understand that cryptocurrency is considered property for tax purposes. This means that any gains or losses from buying, selling or trading cryptocurrency are subject to capital gains tax. For example, if a client buys one Bitcoin for $10,000 and then sells it later for $15,000, they would have a $5,000 capital gain and would be subject to taxes on that gain. Also, if a client buys one Bitcoin for $10,000 and swaps it for another cryptocurrency when the value of Bitcoin is $15,000, you still must report a $5,000 capital gain. Any time there is a crypto-for-crypto transaction, it is looked at as if the original cryptocurrency was sold at the current fair market value and the newly acquired cryptocurrency was purchased at the same value.

Another important thing to keep in mind is that cryptocurrency transactions are subject to the same reporting requirements as other types of property transactions. This means that clients need to report any gains or losses on their taxes even if they didn’t convert their cryptocurrency to fiat currency. Additionally, if you receive cryptocurrency as payment for goods or services, that is considered income and will likely be subject to self-employment taxes after applicable deductions.

DEFI

DeFi is a rapidly growing trend in the cryptocurrency and blockchain space that aims to provide financial services without the need for centralized intermediaries. It relies on decentralized networks and protocols, smart contracts and decentralized applications (dApps) to enable a wide range of financial transactions and services such as lending, borrowing, trading and insurance. It is important to keep in mind that transactions that occur on DeFi platforms are still considered taxable events, and the

value of the assets involved should be reported as income or capital gains depending on the nature of the transaction.

NFTs

Non-fungible tokens (NFTs) are a type of cryptocurrency that represents a unique digital asset, such as a digital artwork or collectible. The sale of NFTs is subject to capital gains tax, just like the sale of other types of property. However, it’s important to note that the tax treatment of NFTs can vary depending on the specifics of the transaction. For example, if an NFT is considered a collectible, it may be subject to collectibles tax, which is typically higher than capital gains tax. It is not uncommon for NFTs to also be part of DeFi in the form of “staking” which allows the owner of an NFT to deposit into a smart contract and earn cryptocurrency tokens over time, not unlike an interest-bearing account.

TAX GUIDANCE

Another issue that can arise with cryptocurrency taxes is the lack of clear guidance from the IRS. While the IRS has issued some guidance on crypto taxes, there are still many unanswered questions and gray areas. This can make it difficult for individuals and businesses to know exactly how to report their crypto transactions. As accountants, it is important to stay up to date on any new guidance or regulations and to consult with a tax professional with experience in crypto tax issues when necessary.

It is also important to be aware that different countries have different tax laws and regulations when it comes to cryptocurrency and DeFi. For example, some countries have implemented specific regulations or taxes for the sale of NFTs. It is essential for accountants to be aware of the tax laws of the countries that clients live in, as well as any other countries where they have crypto holdings or conduct crypto transactions.

READ MORE CRYPTOCURRENCY KNOWLEDGE HUB njcpa.org/hub/cryptocurrency

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June 14, July 5 and additional dates, Live Webcast NUTS & BOLTS OF CRYPTOCURRENCY TAXATION njcpa.org/events

Nicholas J. Young, CPA, is the managing member of WAGMI.Tax LLC. He is a member of the NJCPA and can be reached at contact@wagmi.tax.

R&D Tax Credit Opportunities for IP and Patents

BY BRUCE KLETSKY, FI GROUP

y Process of experimentation. The taxpayer must undertake a process of experimentation designed to evaluate one or more alternatives to achieve a result.

y Technological in nature. The experimental process must fundamentally rely on the principles of the “hard science,” including physical, biological sciences, engineering or computer sciences.

INTELLECTUAL PROPERTY, PATENTS AND INNOVATION

The research and development (R&D) tax credit can be a valuable tool for companies that conduct R&D, including the invention of patented products and processes. It provides a 14-percent credit on qualifying expenditures.

QUALIFICATION CRITERIA

To qualify for the credit, research activities must satisfy the following four-part test:

y Purpose. The objective of the activity must be to create a new or improve an existing business component in terms of functionality, performance or quality. A business component is any product, process, technique, invention, formula or computer software that the taxpayer intends to hold for sale, lease, license or actual use in the taxpayer trade or business.

y Elimination of uncertainty. A degree of uncertainty must exist concerning the development or improvement of the business component. Uncertainty exists if the information available to the taxpayer does not establish the capability of development or improvement, method of development or improvement, or the appropriateness of the business components design.

One of the rationales for patents is that they stimulate economic and technological development and promote competition by creating a financial motivation for invention in return for the disclosure of the invention to the public. The potential of the patent system has been widely recognized in the context of dynamic innovation activities.

In view of the rapid technological innovation and the social and economic challenges, the function, value and impact of the patent system need to be constantly adjusted and implemented so that the optimal balance between the right holder, new entrants to the market and the public at large is achieved.

To foster R&D in new technologies, such as information and communication technologies and biotechnology, the patent system needs to be shaped to respond to the challenges arising swiftly and strategically from those new technologies. Further, to support a comprehensive and complex technological development, it is essential to strengthen public R&D activities, including those in universities, and promote better collaboration between the private and the public sectors. It is important to set up policies that provide a balance by offering both incentives to stimulate R&D and ensure a competitive environment for pioneers, down-stream researchers and producers at the end of the valueadded chain.

One of the major functions of the patent system is the dissemination of technical

information. Patent information is a valuable and comprehensive source of technical, commercial and legal information that can be used directly for scientific and experimental purposes and as a basis for stimulating the adaptation and improvement of the technology described in patent documents immediately after their publication. Recognizing the importance of the dissemination of technical information, a growing number of intellectual property (IP) offices and organizations are using the internet to offer access to their patent documents’ databases. The cost and legal fees for IP/patents are considered an R&D expenditure. Note that the R&D costs required to develop the idea being patented cannot be included in the capitalized cost of a patent. These R&D costs are instead charged to expense as incurred; the basis for this treatment is that R&D is inherently risky, without assurance of future benefits, so it should not be considered an asset.

Bruce Kletsky is the managing director USA of FI Group, Inc. and can be reached at Bruce.kletsky@ fi-group.com

The FI Group is an international tax consultancy that specializes in the implementation of state and federal tax incentives and the R&D tax credits for corporations. The FI team consists of CPAs, engineers, IT, legal and business operation specialists. With more than 13,500 clients in 19 countries, their clients’ benefits exceed more than $2 billion in tax savings annually. Contact FI Group at fi-group.com.

Are Secure Passwords Still a Thing?

BY SUSAN FIRRIOLO, CPA, CISA, PET RESCUE 990 PROJECT

Most cybercrimes occur because of stolen passwords. Traditionally, passwords have been the go-to security method and first line of defense for protecting systems. Phishing attacks (links in emails or texts) are the top technique used by hackers to get passwords. Are traditional password policies — creating strong passwords, installing password managers or using two-factor authentication — still protecting data? If not, what are the alternatives?

TRADITIONAL METHODS

y Strong passwords. These are long and complex passwords containing a combination of upper and lowercase letters, numbers and special characters. Common guidance includes avoiding using dictionary words, not sharing the password and changing it every 30 days. However, using strong passwords alone is risky. Hackers use techniques such as phishing, algorithms or brute force attacks to figure out passwords.

y Password managers. Password managers have been considered a secure way to generate, store and manage complex passwords using encryption. Users only needed to remember one master password to access all their accounts. But like any password, master passwords are subject to hacking. When a master password is compromised, a hacker can change it, access all accounts and lock out the user in one attack. Password managers also take time to set up because the user has to enter usernames and passwords for all their accounts.

ENHANCED PROTECTION

There are methods that can be used in combination with passwords to enhance protection. Multi-factor authentication, single sign-on and adaptive authentication are important components in a security program. Here’s how they work:

y Multi-factor authentication (MFA). Simple MFA usually requires users

to provide a password and an authentication code sent as an email or text to verify the user. MFA offers more security than using passwords alone. However, MFA faces challenges and has been hacked using a compromised email account, sim swaps and a practice called MFA fatigue.

y Single sign-on (SSO). This is an identity service allowing users to log in to multiple applications using a single set of credentials. SSO is also used with social media such as when an application asks you to sign in with Google or Facebook. Although SSO increases speed moving between applications, it does have risks: the user network is dependent on the SSO service provider, and if the service provider goes down, so do all user-connected network resources.

y Adaptive authentication. This is a complex form of MFA. It evaluates user risk and chooses how to validate their identity by geo-location, device status, user behavior or other metrics. For example, logging on with a trusted device is considered a low risk so the user will be authenticated without further verification whereas it would be suspicious if a user who typically logs on at the office logs on at home. Then another type of authentication would be required to verify the user. Additionally, advanced adaptive authorization factors can continuously be checked during the log-on period, such as requiring a USB device to be plugged into the user’s machine. Adaptive authorization systems are multifaceted and take time to implement. Systems with strong authentication have a tendency to lock users out of applications but systems with weak authorization can give everyone access including hackers.

PASSWORDLESS SYSTEMS

Passwordless systems, such as biometrics and hardware tokens, may or may not offer users easier access.

y Biometrics. Biometric authentication involves using physical characteristics, such as fingerprints, facial recognition or other biometrics, to verify a user. Although biometrics cannot be replicated, the systems are expensive, have privacy concerns, can generate false positives and sometimes just do not work.

y Hardware tokens. Hardware tokens are physical devices (such as key fobs or smart cards) that generate one-time codes to authenticate the user. Without the device, access is denied. If the device is lost, users cannot access the system until a new device is procured. If the device is stolen, all bets are off.

Depending on the size, structure, risk tolerance and other characteristics of an organization, CPAs may want to consider securing passwords by adding another level of protection. Passwordless security is on the way and should also be evaluated.

Susan Firriolo, CPA, CISA, is the director and founder of Pet Rescue 990 Project, which provides online tax and advisory services for pet rescue 501(c)(3) organizations. She is a member of several NJCPA interest groups and can be reached at sac2364@gmail.com

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June 7, July 10 and additional dates, Live Webcast ANATOMY OF A RANSOMWARE EVENT AND INCIDENT RESPONSE On Demand

TOP 10 TECHNOLOGY RISKS AND TRENDS EVERY CPA SHOULD KNOW njcpa.org/events

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CYBERSECURITY KNOWLEDGE HUB njcpa.org/hub/cybersecurity

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Solutions, Value and Savings for Members

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125 YEARS OF NJCPA HISTORY

1955

Wilbur Parker, CPA, became the first Black CPA in New Jersey and the first Black member of the Society.

JAN.

19, 1898

Four New Jersey accountants — Richard Stevens, Andrew Patterson, Leonard Conant and Charles Phelps — held the first meeting of the Society of Public Accountants of the State of New Jersey. A membership fee of $5 was assessed.

1960

1976

1912

Dora Roworth, CPA, became the first female member and served several terms as treasurer.

1904

The “Act to regulate the practice of the profession of public accountants,” which was advocated for by the Society, was signed into law. The New Jersey State Board of Public Accountants (now known as New Jersey State Board of Accountancy) was established.

1934

The NJSCPA Scholarship Fund was created. To date, the Fund has awarded more than $7 million to more than 2,000 students.

The New Jersey CPA Political Action Committee (NJ-CPA-PAC) was established.

1977

Governor Brendan Byrne signed the Public Accountancy Act.

1973

The organization’s name was changed to the New Jersey Society of Certified Public Accountants.

1978

Robert L. Garrity, CPA, became the Society’s first executive director.

Membership topped 5,000 when Kathleen Granstrand, CPA, joined the Society. “As a member of the NJCPA for the past 45 years, I have a feeling of pride and security with my affiliation in this significant organization.” Kathleen Granstrand, CPA

“One thing we worried about was keeping New Jersey’s CPA license reciprocity on the same level as all the other states. To accomplish this, we had lots of discussions with New Jersey legislators.”

George V. Curchin, CPA, retired founder, The Curchin Group, NJCPA President 1977/78

“There was so much pride at that time in getting the message out about the value of the CPA credential and figuring out ways to get people to understand it.” Merryl Richards (formerly Bauer), NJCPA executive director/previous positions, 1979-99

1980

The Society moved to Roseland.

1985

The Society set and exceeded a $100,000 Scholarship Fund campaign.

“ The preparation of estate tax returns was considered the practice of law. We petitioned the New Jersey Supreme Court and received a favorable ruling that the preparation of estate tax returns by CPAs was not considered the practice of law.”

Stephen A. Hennesey, CPA, retired from Arthur Andersen & Co., NJCPA President 1983/84

1988

A bill establishing mandatory CPE requirements for CPAs was signed by Governor Thomas Kean.

1991

The NJSCPA Education Foundation was established.

1995

Governor Whitman signed legislation requiring New Jersey CPA candidates to have 150 hours of college credits starting in 2000.

1990

NJCPA members beat Z100 DJs at a charity softball game

1994

The first group of CPAs learned Lotus 1-2-3 in the Society’s newly opened computer lab.

Governor Christine Todd Whitman signed an NJCPA-supported bill allowing CPAs to form as LLCs.

1996

Bob Garrity retired and Merryl (Bauer) Richards became the executive director.

“I saw guys serving as NJCPA officers who were older and wiser than me, and they loved the Society. I thought at the time, ‘Wouldn’t it really be cool to be president someday?’ And I got that wish 15 years later.”

Douglas P. Stives, CPA, MBA, specialist professor at Monmouth University, NJCPA President 1989/90

“Back then, I wrote about an increasing number of our new members as being female, diversity training, lifestyle change and the virtual workplace as part of our life… sound familiar? That was 1994. As Lee Iacocca said, ‘You either lead, follow or get out of the way.’”

Bernard R. Gingras, CPA, retired director at Murphy, Miller & Baglieri, LLP, NJCPA President 1994/95

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WISHING YOU BEST OF LUCK ON ALL OF YOUR FUTURE ENDEAVORS, FROM YOUR FRIENDS AT BOWMAN & PAST NJCPA PRESIDENTS:

“The greatest reward that I received was the friendships and relationships I made. These are treasures that have lasted over the years.”

Kenneth W. Moore, CPA, RMA, CMFO, retired partner at Ford Scott & Associates, NJCPA President 1998/99

1997

The Society launched its first website.

2000

New Jersey changed to a triennial licensing cycle: 120 CPE credits over three years instead of 48 over two years.

The Millennium Scholarship Campaign raised more than $1 million.

Sharon Lamont, CPA, became the first female president of the Society.

1997/98

The Society celebrated its 100th anniversary.

The Centennial Scholarship Campaign raised more than $200,000.

1999

Merryl Richards resigned and Ralph Albert Thomas became the new executive director (later renamed CEO and executive director).

“I don’t do things for the reward that goes on the wall. I do things because, if I’m going to do it, I’m going to do it wholeheartedly.”

Michael A. Polito, CPA, retired partner at Deloitte & Touche LLP, NJCPA President 2001/02

2003

The Society was successful in getting a provision removed from a medical malpractice bill that would have placed a $50 surcharge on the CPA license fee.

The New Jersey Law and Ethics course became mandatory for the 2003-2005 triennial. The Society’s course was approved.

2006

Society leaders and staff rang the opening bell at the New York Stock Exchange.

2004

The Pay It Forward program (now known as the Career Awareness Program) was launched. Since its inception, hundreds of members have made thousands of presentations at New Jersey high schools.

“For me, it was never about the job, it was always about the people — our members, the business community, staff, students and aspiring CPAs. I don’t even consider it advocating; speaking about this great profession comes so second nature,”

Ralph Albert Thomas, CPA (DC), CGMA, CEO and executive director at NJCPA, 1999-2023

“The bottom line is the New Jersey Society of CPAs really put me on the roadmap. It really elevated me as a thought leader in our profession. No matter where I go — I speak in California, Texas, at other state societies and all over the world — it’s all because of the NJCPA.”

James C. Bourke, CPA, CITP, CFF, CGMA, managing director of advisory services at Withum, NJCPA President 2006/07

“The Society does a really nice job of advocating for its members. I think the fact that we advocate for our members is probably the top thing we can do to bring our profession forward.”

John Coiro, CPA, managing director of tax services at Ernst & Young LLP, NJCPA President 2007/08

2008

New Jersey became the 29th state to enact mobility legislation, allowing CPAs licensed in other states to practice public accountancy and attest services in New Jersey under certain circumstances.

“Most important to me is the type of camaraderie shared by CPAs; that is unique to our profession. It is truly one of a kind.”

Robert J. Traphagen, CPA, CGMA, managing partner at Traphagen CPAs & Wealth Advisors, NJCPA President 2009/10

2010

Past President Paul Stahlin, CPA, became chair of the AICPA.

The Young CPAs (now Emerging Leaders) Food Drive was started.

Connect and the NJCPA Member Open Forum were launched.

The Scholarship Fund celebrated its 50th anniversary.

“I don’t claim to have any super achievements, except that I was the second female president, which to me meant a lot because I thought that was very big for female accountants.”

Carole A. Hedinger, CPA, consultant at Carole Hedinger, CPA, CGMA, NJCPA President 2011/12

2012

In response to the devastation of Superstorm Sandy, Society members participated in a Day of Service throughout the state.

“When I sell the Society to the people in my office, I think about a place where I have resources available and I am a resource to others. The love you take is equal to the love you give.”

Brad E. Muniz, CPA, CGMA, assurance principal at CliftonLarsenAllen LLP, NJCPA President 2014/15

“I made a lot of friends and a lot of business connections through the Society. It’s a great way to network. I think everybody should take advantage of the Society in that respect.”

Frank R. Boutillette, CPA, CGMA, ABV, emeritus partner at Withum, NJCPA President 2015/16

2019

“Going to AICPA Council meetings and seeing what goes on at Council, we at the NJCPA have been one of the leaders in the U.S. when it comes to being at the forefront of issues and challenges facing the profession.”

Walter J. Brasch, CPA, CGMA, chief success officer at Prager Metis CPAs LLC, NJCPA President 2016/17

2014

The Society held the first of many IssuesWatch Live broadcasts, providing timely updates on topics impacting CPAs.

The Society set its vision statement: To equip and empower New Jersey’s accounting and finance professionals to thrive in their careers.

Nano learning and blended learning were approved for CPE credit in New Jersey.

The Society moved to its current offices at 105 Eisenhower Parkway in Roseland.

2021

A minority scholarship, funded by Deloitte and the Deloitte Foundation, and a sophomore scholarship were launched.

2018

The Society established four directional initiatives as part of its Strategic Plan: Digital Transformation, Image Evolution, Future of Learning and Membership 2.0.

2020

The Pass-Through Business Alternative Income Tax Act (BAIT), which was drafted by past president Alan Sobel and strongly advocated for by the Society, was signed into law.

Membership+ was launched to provide NJCPA members with 20 free CPE credits per year.

2022

The NJCPA Convention & Expo returned in person to Atlantic City.

A Senate resolution was signed declaring Nov. 6-11, 2022, as Certified Public Accountants Week in New Jersey.

Society members approved changes to the bylaws to create the Affiliate member category for certain non-CPA financial professionals.

“Through my involvement at the Society, I met some of the finest people in the profession, and I think that’s an undersold aspect of the NJCPA. I tell this to all the folks in my firm. You’ll meet some of the best people you’ll ever want to work with.”

Edward I. Guttenplan, CPA, CGMA, MBA, managing shareholder at WilkinGuttenplan, NJCPA President 2017/18

“The involvement in the Society by the larger firms is fantastic, and they support and underwrite a whole lot of what we do. But so much of our constituency and our membership really is those smaller sole proprietors. And I really wanted to give them a voice.”

Sarah Krom, CPA, MST, managing partner at SKC & Co. CPAs, L.L.C., NJCPA President 2018/19

“A major accomplishment has been to bring DEI to the forefront and make DEI an imperative in everything NJCPA does. It's also been securing over $100,000 in funding to support college scholarships for underrepresented minority students.”

Kyle M. Sell, CPA, MBA, audit and assurance partner at Deloitte, NJCPA President 2019/20

“I am proud that we not only survived, but emerged from COVID a stronger organization, prepared to meet the opportunities and challenges of the future.”

Alan D. Sobel, CPA, managing principal at the New Jersey offices of CliftonLarsonAllen LLP, NJCPA President 2020/21

“We were still in the middle of the pandemic when I became president, but we were an incredible resource and source of stability for our members in a very unstable time.”

“The bylaws changes create an inclusive approach to give members added support and resources needed to navigate their individualized paths towards licensure as a CPA.”

Harry P. Wills III, CPA, CGMA, partner at Bowman & Company LLP, NJCPA President 2021/22

VISIT NJCPA.ORG/125 TO

Kathleen F. Powers, CPA, CGMA, chief financial officer at Chelsea Senior Living, NJCPA President 2022/23 2023

The Society celebrates its 125th anniversary.

Ralph Albert Thomas retires, and Aiysha (AJ) Johnson becomes the new CEO and executive director (effective June 12, 2023).

y Read the reflections of our past presidents and CEOs/executive directors.

y View a more-detailed timeline and see additional photos.

y Watch video messages from members.

y Record your own video message.

2023/24 NJCPA Leaders

The following NJCPA members are serving as officers, trustees, chapter presidents, committee chairs and interest group leaders from June 1, 2023, through May 31, 2024.

EDWARD G. O’CONNELL, CPA, CGMA, CFF, CFE WithumSmith+Brown

JUNE M. TOTH, CPA, CFF, CITP, CGMA WilkinGuttenplan

JOHN M. SZCZOMAK, CPA Smolin, Lupin & Co., P.A.

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

BOARD OF TRUSTEES

BRENT M. ASHTON, CPA Ernst & Young LLP

KATHLEEN BERNARD, CPA Lota & Bernard, LLC

NICOLE M. DeROSA, CPA, MAcc Wiss & Company, LLP

ALTHEIA LEDUC, CPA Gold Gerstein Group LLC

CHRISTOPHER M. LOVASZ, CPA Deloitte

BRIAN G. NAFASH, CPA Massood & Company, P.A.

CHRIS J. SCHIFFER, CPA, CFP, MBA, AIF Wealth Enhancement Group

DR. SEAN D. STEIN SMITH, CPA, CFE, CGMA, CMA, DBA Lehman College (CUNY)

CATHERINE SYSLO, CPA

CohnReznick LLP

MICHELE THEUERKAUF, CPA Michele Theuerkauf, CPA LLC

PAULA M. YOUNG, CPA EisnerAmper LLP

KATHERINE E. ZECH, CPA PKF O’Connor Davies, LLP

CHAPTER PRESIDENTS

ATLANTIC/CAPE MAY

Teresa L. Zipf, CPA, CFP Benjamin F. Edwards & Co.

BERGEN

Edgard F. Bueno, CPA Bueno and Company CPA, LLC

ESSEX

Joseph W. Zapf, CPA CliftonLarsonAllen LLP

HUDSON

Brian R. Dethlefsen, CPA, MST, MAcc

MERCER

Lisa Herzer, CPA EisnerAmper LLP

MIDDLESEX/SOMERSET

Vikram Venkataramani, CPA, PFS, CGMA, CITP VVV CPA PC

MONMOUTH/OCEAN

Joseph A. Caplan, CPA RRBB

MORRIS/SUSSEX

Olivia Campaniolo, CPA, CGMA, PSA, MBA World Insurance Associates LLC

PASSAIC COUNTY

Christopher E. Massood, CPA Massood & Company, P.A.

SOUTHWEST JERSEY

Douglas R. Madanick, CPA, J.D., LL.M. Kulzer & DiPadova, P.A.

UNION COUNTY

Jeffrey Christakos, CPA/PFS, MBA, CFP Christakos & Co.

Learn more about our chapter presidents and the activities taking place in their chapters at njcpa.org/chapters.

INTEREST GROUP LEADERS/COMMITTEE CHAIRS

Accounting & Auditing Standards Interest Group

Michael S. Kaplan, CPA Smolin, Lupin & Co., P.A.

Audit Committee

Robert J. Valas, CPA/ABV, CVA, CFE Cullari Callico LLC

Business & Industry Professionals Interest Group

Caren C. Jesseman, CPA, MBA

CFO Solution, LLC

Cannabis Interest Group

Alex E. Krasnomowitz, CPA

Alex E. Krasnomowitz, CPA, LLC

Chapter Operations Committee

George S. Charne, CPA Sax LLP

Committee Operations Committee

Amy MacFadyen, CPA EisnerAmper LLP

Education Foundation Executive Committee

Brad E. Muniz, CPA CliftonLarsonAllen LLP

Emerging Leaders Council and Emerging Leaders Interest Group

Zachary B. Cohen, CPA CFGI

Emerging Technologies Interest Group

Karolis Matulis, CPA, CVA WilkinGuttenplan

Federal Taxation Interest Group

Darren W. M. Thomas, CPA, J.D., EA

Traphagen CPAs & Wealth Advisors

Finance Committee

Ralph J. Evangelista, CPA, CGMA, MST

Frazer, Evangelista & Company, LLC

Governmental Accounting & Auditing Interest Group

Jerry W. Conaty, CPA, CFE, RMA

Holman Frenia Allison, P.C.

Investment Committee

Teresa L. Zipf, CPA, CFP

Benjamin F. Edwards & Co.

NJ-CPA-PAC

Gary W. Higgins, CPA PKF O’Connor Davies, LLP

NJCPA Scholarship Fund

Henrietta G. Fuchs, CPA CohnReznick LLP

Nominating Committee

Harry P. Wills III, CPA, CGMA

Bowman & Company LLP

Nonprofit Interest Group

Robert J. Dethlefsen, CPA, CGMA, MBA

Robert Dethlefsen, CPA

Peer Review Executive Committee

Michael M. Wolansky Sr., CPA

Buchbinder Tunick & Company LLP

Professional Conduct Committee

Charles A. Lota, CPA Lota & Bernard, LLC

Retirement Savings Plan Committee

Edward G. O’Connell, CPA, CGMA, CFF, CFE WithumSmith+Brown

State Taxation Interest Group

Jason L. Rosenberg, CPA, EA, MST, CGMA WithumSmith+Brown

Strategic Planning Committee

Maryann Holloway, CPA, RMA, PSA, CMFO Bowman & Company LLP

Student Programs & Scholarships Committee

Tara M. Baldwin, CPA WilkinGuttenplan

Volunteer Relations Committee

Jesse M. Herschbein, CPA, CGMA AICPA

NJCPA Names New CEO and Executive Director

AJ has more than 20 years of experience working for nonprofits, including professional and trade associations, building strategic partnerships and developing member value strategies. She most recently served as executive director of BKR International’s Americas Region, where she was responsible for overseeing the implementation of all strategic efforts for BKR accounting and business advisory member firms in the United States, Canada, Latin America and the Caribbean.

“We could not be more excited to have AJ at the helm. She is well-versed in the accounting profession globally and in New Jersey,” said Kathleen F. Powers, CPA, CGMA, chief financial officer at Chelsea Senior Living and the 2022/23 president of the NJCPA. “She is knowledgeable about how CPAs can strengthen their organizations and personal brands.”

After an extensive search, the NJCPA has named Aiysha (AJ) Johnson its next CEO and executive director, replacing Ralph Albert Thomas, CPA (DC), CGMA, who is retiring June 30 after leading the organization for more than 23 years. AJ will start June 12.

“It is an honor to continue to support the profession and build upon the amazing success of my predecessor,” said AJ. “The NJCPA remains strongly positioned to support CPAs and accounting professionals. I look forward to working closely with constituents and our members to ensure that their needs are represented and addressed.”

Retiring CEO and Executive Director Ralph Albert Thomas, CPA (DC), CGMA, added, “I am confident the Society will flourish under AJ’s leadership. It’s an exciting time to be part of the NJCPA community.”

Learn more about AJ at njcpa.org/ about/board.

Convention Exhibitors Showcase Services

The NJCPA Convention & Expo, themed “Breaking Through,” to be held June 13-16 at the Borgata in Atlantic City, will show CPAs and accounting professionals what’s needed to stand out from their peers and enhance their business or personal brand in a crowded field. The following exhibitors will be on hand to direct attendees towards the most efficient pathways to growth:

ADP

ADVANCED COMPUTER

TECHNOLOGIES

AFFINITY FEDERAL CREDIT UNION

AVANTAX

BANK OF AMERICA

BERNSTEIN PRIVATE WEALTH

BLOCK ADVISORS

CAMICO AND GALLAGHER

AFFINITY

CAPITAL ONE BANK

CAPSTAN TAX STRATEGIES

CITI

CITIZENS

COLUMBIA BANK

CONSOLIDATED HUMAN RESOURCES

CORALTREE

COST RECOVERY SOLUTIONS

CRSP CONNECT LLC

CSI GROUP LLP

DEBTBOOK

DRAKE SOFTWARE

FI GROUP

FIRST BANK

FIRST CHOICE BUSINESS BROKERS

FIRST HOPE BANK

FULTON BANK

GKM

GUARANTEED RATE-MARC DEMETRIOU

JPMORGAN CHASE & CO.

KBKG

KEARNY BANK

KENN HEASLIP SEMINARS LLC

LIBERTY PAYROLL AND HR

M&T BANK/WILMINGTON TRUST

MERCHANT ADVOCATE

MPI

MURPHY BUSINESS SALES

NETSURIT, INC.

NETWOLF CYBER INTELLIGENCE

ADVISORS

NEW JERSEY BUSINESS ACTION

CENTER/NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY

NORTHFIELD BANK

NPPG FIDUCIARY SERVICES

OMEGA ACCOUNTING SOLUTIONS

PARESHAH PARTNERS

PAYCHEX

PEAPACK-GLADSTONE BANK

PLYMOUTH ROCK

PNC BANK

POINT VANTAGE BENEFITS

PREFERRED PENSION PLANNING CORPORATION

PROFOUND TECHNOLOGIES

PROVIDENT BANK

PURSUIT

RAMAPO COLLEGE OF NEW JERSEY

RBAC

RIDER UNIVERSITY

RIGHT NETWORKS

ROI-NJ

SOURCE ADVISORS

SPENCER SAVINGS BANK

STOCKTON UNIVERSITY

SUSSAN, GREENWALD & WESLER

TD BANK

THE GARBACK AGENCY

THE LACKNER GROUP, INC.

THINKWEALTH, LLC

TITAN TECHNOLOGIES

UNITED SUCCESS WEALTH MANAGEMENT

USI AFFINITY

VISION 33

WORKPLACE HUMAN CAPITAL MANAGEMENT

•

New Membership Categories Are Now Active

BY SUSAN DYER, CAE, NJCPA MEMBERSHIP DIRECTOR

Changes to the NJCPA membership categories that aim to help retain student members, update terminology and simplify and consolidate member classes went into effect on June 1. The changes were approved by NJCPA members in November 2022.

INTRODUCING AFFILIATE MEMBERSHIP

The new Affiliate membership was created for non-CPA financial professionals who meet any of the following requirements:

y Completed the academic requirements to become a CPA and pursuing further requirements necessary to become a CPA

y Work in an accounting or finance position under the supervision of a CPA

y A chartered accountant or its equivalent in any country other than the United States

y An instructor of accountancy in a school of collegiate standing

y A non-CPA owner, partner, shareholder or principal of a firm licensed by the New Jersey State Board of Accountancy

Affiliates will not be able to vote on ballot measures presented to the membership but may be eligible for certain leadership positions.

ADDITIONAL UPDATES

The definition of the NJCPA Student Member category was changed to welcome students with various skill sets and different academic tracks but headed towards the same goal of becoming a CPA. Student Members are undergraduate or graduate students who have an interest in accounting,

finance, business or information systems. Student membership is free and is open to college students in any state.

The Fellow Member category was renamed CPA Member to modernize the name and to indicate exactly who qualifies under the category — licensed CPAs from any state. Eligibility for this category remains the same.

y Read more about the bylaws changes: njcpa.org/bylaws

y Recommend a colleague for membership: njcpa.org/mgm

Susan Dyer, CAE, is the membership director at the NJCPA and can be reached at sdyer@njcpa.org

New Jersey Students Honored with Scholarships

The NJCPA Scholarship Fund awarded $221,500 in scholarships to New Jersey high school and college students at the 63rd Annual Scholarship Awards Ceremony on April 27. Out of 146 applicants, 53 students were given scholarships. Eighteen high school students received $1,500 scholarships, and 35 college students received scholarships ranging from $2,000 to $6,500. The college awards also included minority scholarships given in conjunction with the American Institute of CPAs (AICPA) and the National Association of Black Accountants (NABA) — Northern New Jersey Chapter.

Eight of the high school students and two of the college students selected by the NJCPA received scholarships funded by the Deloitte Foundation to support racially and ethnically diverse students on their educational pathways towards accounting degrees and CPA career readiness. Each student received $1,500. The participating high schools selected by the NJCPA were Dwight Morrow High School (2 winners), Rahway High School, Sayreville War Memorial High School, Union High School, West Orange High School (2 winners) and Williamstown High School. The two college recipients were from Seton Hall University and St. Peter’s University.

“We are extremely pleased to be distributing these awards. The scholarship program was not only designed to assist the students financially but also to motivate them to pursue an accounting career,” said Henrietta Fuchs, CPA, president of the NJCPA Scholarship Fund, partner at CohnReznick LLP and a former scholarship recipient herself. Special thanks go to the following organization/company benefactors:

y Citrin Cooperman (Untracht Early)

y CohnReznick

y Deloitte Foundation

y EisnerAmper

y Frazer Evangelista & Company

y Holman Frenia Allison

y Mazars

y Smolin Lupin

y WithumSmith+Brown

This year’s in-name-of awards included the following:

y Bowman & Company in memory of John F. Dailey Jr.

y Bowman & Company in memory of Lisa Donahue

y Council of Past Presidents

y In Honor of NJCPA Past President Michael Polito

y In Honor of Ralph Albert Thomas, NJCPA CEO & Executive Director

y In Memory of Howard Bookbinder

y In Memory of NJCPA Past President John F. Dailey Jr.

y In Memory of Frederick and Lenore Horn

y In Memory of NJCPA Past President John S. Lee

y In Memory of NJCPA Past President Z. Thaddeus Zawacki

y PKF O’Connor Davies in memory of Stephen Mannuzza

y WilkinGuttenplan in memory of Jules C. Frankel

y WithumSmith+Brown in honor of NJCPA Past President Frank Boutillette

All of the scholarships take academic grades, standardized test scores, essays and personal interviews into account. A complete list of winners can be found at njcpa.org/scholarships.

Members Give Back with Free Tax Help

Before the close of the 2023 tax season, NJCPA members fielded nearly 200 tax calls from New Jersey residents during the tax call-in programs in conjunction with the Asbury Park Press on March 5 and at News 12 New Jersey on March 30. Members offered free tax help on everything from medical expense deductions and IRA calculations to rental property.

Of the many questions asked, several centered around IRS services; federal and local tax; ANCHOR property tax relief; standard/itemized deductions; calculating estimated tax payments; and determining the taxability and interest allocation of municipal bonds.

Volunteer Olga Lubomirsky, CPA, a senior tax manager in the Private Client Services group at Mazars USA LLP, said, “It feels so great helping our senior citizens, most of whom cannot afford a qualified tax preparer. All callers were very appreciative

to receive professional advice and discuss their tax issues.” Callers were grateful to be informed on many levels, she added. “One caller was preparing his return by hand and was going to file by paper. He had no idea that free e-file services exist!”

Joseph R. Petrucelli, CPA, managing partner of Petrucelli, Piotrowski & Co., Inc., also had interesting callers. “One elderly person asked if they were going to jail for not filing taxes and another asked if plastic surgery was deductible,” he said. Petrucelli keeps returning to the NJCPA tax program annually for the rewarding memories. “Receiving the God bless you’s and the appreciation makes it an amazing experience. Also, it’s fun when someone walks up to me in a store and says, ‘I saw you on TV’ and that I was informative.”

The following NJCPA members participated in the programs:

y Neil B. Becourtney, CPA Smolin Lupin & Co.

y Christopher R. Cicalese, CPA Alloy Silverstein

y Melanie Cobb, CPA, CGMA Abacus Financial

y Nicole DeRosa, CPA, MAcc Wiss & Company

y Robert A. Fodera, CPA

y Olga Lubomirsky, CPA Mazars

y Stephen J. Mazur, CPA, CGMA, MBA Mazur & Associates, CPAs and Business Advisors

y Joseph R. Petrucelli, CPA Petrucelli, Piotrowski and Co.

y June M. Toth, CPA, CFF, CITP, CGMA WilkinGuttenplan

y Kimberly E. Wilkinson, CPA Wiss & Company

To be considered for future tax Q&A sessions, sign up at njcpa.org/volunteer.

MERGERS/ACQUISITIONS

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

Monmouth County retirement-minded

CPA seeks CPA to assume his partnership interest and to continue with remaining partner at our office location. Retiring partner will remain during transition period. Practice has large individual and small business tax preparation service. Cash collections in excess of $1,000.000. Reply in confidence at njcpa.org/classifieds.

Matthews, Panariello P.C., a full service Bergen County firm located in Paramus, is looking to merge or acquire firms, sole practitioners, or accounts (audits, reviews, compilations and tax preparation and compliance services). We are a peer reviewed firm with a strong track record of client retention. We have been successful in prior acquisitions; let's talk. Visit our website at www.mpcpas.com. To confidentially discuss email Peter at pmanetta@mpcpas.com.

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

Whitman Transition Advisors has been helping CPA firms with their M&A needs since 2003. We are working with several new buyers in the market place that are paying cash up front, regardless of firm size. If your revenues exceed $1.50MM annually then we should talk today! To confidentially discuss this opportunity, please email us at pw@whitmantransition.com.

CPA practice for sale. Retirement minded CPA with Bergen County practice. 440 personal returns and business services (write up, payroll, sales taxes and business returns). Reply in confidence at njcpa.org/ classifieds

Central Jersey sole proprietor’s practice for sale due to retirement. Currently in office share arrangement. No financials, tax and consulting. Small number of write ups. 1040 and 1041 work is approximately 70% from my business clients and extended families. Well established, loyal clientele. Historically grossing over $450,000, 20% less in future due to client's sales of businesses. I have been turning down new business for years. Will help in transition and provide referrals. Reply in confidence at njcpa.org/classifieds.

PROFESSIONAL SERVICES

Quality Review for CPA firms: audit, review, compilation, employee benefit plans, Yellow Book, revenue recognition. Contact James M. Sausmer, CPA at 732-261-7710 or james.sausmer@gmail.com.

ADVERTISERS INDEX

33 ACCOUNTING PRACTICE SALES aps.net

21 BOWMAN & COMPANY LLP bowman.cpa

32 CAPSTAN capstantax.com

3 CORAL TREE coracloud.app

C2 CORVEE corvee.com/njcpa

30 COST RECOVERY SOLUTIONS LLC crscostseg.com

31 THE GARBACK AGENCY garbackagency.com

31 LIBERTY PAYROLL libertypayrollhr.com

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A Father/Son Team That’s More Alike Than Different

BY KATHLEEN HOFFELDER, NJCPA SENIOR CONTENT EDITOR

With their six-week-old son in tow, Alex E. Krasnomowitz, CPA, and his wife, LouAnn, made the trek from New Jersey to the University of Montana for Alex to complete a program to become a forest ranger. That career path wasn’t exactly conducive to raising a family and LouAnn also missed New Jersey. So, after a year, they headed home, Alex enrolled in accounting at William Paterson University, and he never looked back — though he still enjoys the outdoors.

Those twists and turns come naturally to Alex, who spent years working at Deloitte and other accounting firms in the greater New York area. He eventually founded his own company, Alex E. Krasnomowitz, CPA, LLC, in West Caldwell, whose clients run the gamut from music entrepreneurs and landscapers to cannabis market participants. In describing the new cannabis market, Alex, now the leader of the NJCPA Cannabis Interest Group, says, “It’s like packing up the wagons and going west. There’s absolutely no playbook.”

The flexibility in running his own practice also helped in raising his children. “My dad died when I was four, and I wanted to be with my children growing up. The industry was all about facetime. The profession has certainly changed — recognizing that family life contributes to your professional life as well,” he says.

He also never gave up on his passion for the outdoors — he just plans that around tax season. Alex and his now-grown son, Alex L. Krasnomowitz, CPA, CVA, MBA, member of the firm at Smolin LLC, always make time for their yearly ski trip with friends and family — this year it was to Montana. The two also share a passion for baseball, softball and soccer. Alex E. was a coach for 25 years for all of his three sons’ (one now deceased) teams and his daughter’s teams. To him, coaching was simply a part of helping to raise kids. “I have a right hand and if somebody needs something done, it goes up. It’s just my nature. I love being around kids,” he explains. Following that

philosophy, Alex L. also coaches soccer and softball for his daughters — he has five to choose from, ranging in ages from 19 to 9 months.

FORGING HIS OWN PATH

There are some differences between the father and son, however. While they share a love of accounting, they both decided not to work together. As Alex E. notes, it’s best for his son to “set his own path in life.” And, when reflecting on those choices, he admits, “My son is a rainmaker.”

Having focused on baseball at St. Bonaventure, Alex L. eventually realized that accounting was a good path to take. “Between the distractions of college and injuries, I realized that dream wasn’t going to last forever,” he explains. Alex L. received good grades in his accounting classes, which led him to his first job as an auditor with BDO Seidman in New York. He then moved to Denver for a job in forensic accounting, where he could also ski, and eventually San Diego, as a controller. His first daughter was born in San Diego, but after two years, Alex L. moved back to New Jersey to be closer to his family.

For now, he’s content to keep on making a name for himself on Smolin’s Forensic & Valuation team, where it comes in handy having a background as an auditor, controller and litigation consultant. “My job is primarily matrimonial matters and shareholder disputes,” he explains.

Opting to follow his dad into accounting was an easy decision. “Mostly, as he said, he was around a lot. He consistently coached our teams and skied with us. Not many traditional CPAs with tax practices did much skiing. That had something to do with it,” he adds.

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