BROUGHT TO YOU BY THE VIRGINIA SOCIETY OF CPAs
Counting on Culture
Culture of a Connector
The New Auditor’s Report
JANUARY/FEBRUARY 2012 I VOL. 25 NO. 1 I WWW.VSCPA.COM
INSIDE this issue
COVER STORY >>
An organization’s culture doesn’t have to evolve over time. It can be crafted. On page 18, learn how PBGH’s culture permeates how it does business. And on page 22, read how a Northern Virginia managing partner builds his firm on the importance of respect.
FEATURES COUNTING ON CULTURE
Your corporate culture needs a solid definition that all employees understand and respect.
CULTURE OF A CONNECTOR
Learn from the experiences of Christopher Helmrath, managing partner at SC&H Group, LLC.
THE NEW (AND IMPROVED) AUDITOR’S REPORT 28 Prep yourself now for the first major revision of the standard auditor’s report since 1988.
TECHNOLOGY: IT’S ABOUT THE PEOPLE 14
It’s time to move the IT perception beyond technology to information service delivery.
ADVERTISERS INDEX Accounting Practice Sales inside back cover • Audimation Services Inc. p. 39 • Beth A. Berk, CPA p. 17 • Keiter, Stephens back cover • PNC, inside front cover • Securities Claims Management, LLC p. 25 • VSCPA Insurance Service Center p. 38
BOARD OF ACCOUNTANCY 10 TAXATION
SELF-ASSESSMENT 33 VSCPA NEWS
VSCPA EDUCATIONAL FOUNDATION 42 CLASSIFIEDS 43 I AM
disclosures is published bimonthly for members of the Virginia Society of CPAs.
Our mission is to enhance the success of CPAs.
VIRGINIA SOCIETY OF CPAs
4309 Cox Road Glen Allen, VA 23060 Ph. (800) 733-8272 Fx. (804) 273-1741 www.vscpa.com
BACKTALK you said it
Enjoying the Day of Service
Here’s a pic from my Day of Service, at my client, Homeward Trails Animal Rescue (homewardtrails. org). I helped out Sue Bell (the exec director) by organizing volunteer boxes for the events that they participate in, organize “adopt me” vests that the dogs wear at events, and set up a computer and printer that was donated to them. And I got to pet a few dogs. Sue and the other people there were grateful for my help, and it was a fun day!
EDITORIAL STAFF Jill Edmonds Managing Editor firstname.lastname@example.org Jenny Hansen Communications Director email@example.com Tina Lambert, CAE Vice President, Member & Public Relations firstname.lastname@example.org
JAY E. REINER, CPA, sole proprietor, Vienna
EDITORIAL TASK FORCE Joan D. Aaron, CPA Bill Barrett, CPA/ABV, CFF Beth A. Berk, CPA James D. Cole, CPA Cheri G. David, CPA, CVA James P. Davis Jr., CPA William C. Foote, CPA/ABV, CVA Elizabeth M. Helle, CPA Heather L. Judson, CPA Clare K. Levison, CPA Gabriele Lingenfelter, CPA Haven S. Pope, CPA, MBA, CFE George D. Strudgeon, CPA Philip H. Umansky, CPA, Ph.D. Thomas L. Visotsky, CPA DEADLINES Articles and advertising for future issues are due by 5 p.m. on the following dates: May/June 2012 July/Aug. 2012 Sept./Oct. 2012 Nov./Dec. 2012 Jan./Feb. 2013 Mar./Apr. 2013
Feb. 15, 2012 Apr. 15, 2012 June 15, 2012 Aug. 15, 2012 Oct. 15, 2012 Dec. 15, 2012
VIA EMAIL >> [Through the Nonprofit Pro Bono Assistance Program], the connections you are facilitating make a big difference. Particularly, in these times of constrained resources, it allows organizations to stretch. The impact cannot be understated.
TWITTERSPHERE >> Art Aurebach says that the new Schedule D will increase processing time by 15%. — @HENRYDAVISCPA
DAVID H. TIKKALA, CPA,
FROM CONFERENCE EVALUATION >> I have attended so many different government contracting conferences offered by several societies and associations. The VSCPA 2011 Government Contracting Conference is the best so far. Thanks for the great job. ANONYMOUS CONFERENCE ATTENDEE
RT @VSCPANews: Ed Mazur, CPA, explaining importance of intergovernmental fin. dependency in his @AICPA_JofA article: bit.ly/sJo97C — @AICPA_JOFA
Some auditing practices are unique to nonprofit organizations. Terry Fraser is addressing them to the VSCPA today. @VSCPANews — @LARSONALLEN BLOG: www.cpacafe.com TWITTER: @VSCPANews, @FinancialFit LINKEDIN: http://tinyurl.com/VSCPALinkedInGroup
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Get in touch
At the Virginia Society of CPAs, we love to hear from you. Whether it’s a quick email to a staff member, chat on the phone, Disclosures letter to the editor, tweet, blog comment or something different altogether, let us know what you’re talking about, how you feel about different issues affecting CPAs and how we can help.
REALIZE YO UR G RO WT H P O T E NTIAL WITH THE VSCPA CAREER CE NT E R
O NLI NE CA RE E R CE NT E R
Move your business in the right direction. The Virginia Society of CPAs understands how important it is for employers to find qualified talent quickly and efficiently so weâ€™re upgrading our services to provide an enhanced online career center. With more than 10,000 highly qualified accounting professionals, VSCPA members represent the largest association of licensed CPAs in Virginia. Members will continue to benefit from free resume posting services while employers will have access to affordable posting packages and enhanced searching options. For more information visit the new VSCPA Career Center online at www.vscpa.com.
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LINE items FUTURE OF THE PROFESSION >>
What’s on the horizon? More than 75,000 CPAs, regulators, thought leaders and others have had their say about the profession’s future. The final report of CPA Horizons 2025, a year-long project from the American Institute of CPAs (AICPA), reveals the trends affecting the profession up to year 2025. The report reveals 10 key insights on which the profession should focus: 1. TECHNOLOGY: Understand and leverage relevant technology in conjunction with core CPA competencies to deliver superior services. 2. PRE-CERTIFICATION AND LIFELONG LEARNING: Evolve the educational framework to keep pace with the changing dynamics of business, government and the profession. 3. WORLDWIDE PROFESSION: Position the CPA as a premier designation of the accounting and finance profession throughout the world. 4. PRIDE IN THE PROFESSION: Encourage pride among CPAs within the profession and in the value CPAs create throughout society. 5. TRUSTED ATTESTER: Preserve the role of the CPA as the trusted attester of financial and other information. 6. TRUSTED ADVISOR: Promote the CPA as the trusted advisor who develops solutions to complex problems. 7. MARKET PERMISSION: Leverage the strengths of the profession to expand market permissions. 8. MARKETPLACE: Address changes in the marketplace, economy, business and regulations by managing change. 9. VALUE PROPOSITION: Increase the visibility of the profession’s value proposition by demonstrating the profession’s core values in multiple areas of business and society. 10. DEMOGRAPHIC SHIFTS: Continue to offer opportunities that enhance the appeal of the profession and be proactive in addressing both U.S. and global demographic shifts. The VSCPA helped the AICPA with the project by holding focus groups across the state to discuss the future of the profession. Visit www.cpahorizons2025.org to download the full report. n
LINE items CFAs STUDY IFRS >>
Risk disclosures need improvement, report finds
VSCPA LEGISLATIVE AGENDA >>
Protecting the profession in 2012 The VSCPA’s chief aim related to government affairs is always to protect and promote the CPA profession and designation in Virginia. In addition to that focus, VSCPA leaders, members and staff develop a legislative agenda each year to narrow the Society’s advocacy efforts even further. During the General Assembly session this year, the VSCPA will: • Advocate for automatic conformity of Virginia’s tax code with the federal tax code. • Advocate for CPAs on state legislative and regulatory matters, including but not limited to promoting sound tax policy, preventing duplicative licensure requirements and protecting the important services CPAs offer. • Support financial literacy education, including the mandatory onecredit course graduation requirement in Virginia high schools. • Support the continued independence and expertise of the Virginia Board of Accountancy. • Advocate for CPAs on federal legislative and regulatory issues, including but not limited to tax preparer registration, tax strategy patents and private company financial reporting. • Support and promote practice mobility among all states. For more information on these agenda items, contact VSCPA Government Affairs Director Emily Walker at (804) 612-9428 or firstname.lastname@example.org. n
A new study from the CFA Institute, the organization of Chartered Financial Analysts (CFA), reveals the need to improve the quality of financial instrument risk disclosures among financial and non-financial institutions. The report, User Perspectives on Financial Instrument Risk Disclosures Under IFRS, addresses credit, liquidity, market and hedging activities risk disclosures under International Financial Reporting Standards (IFRS) Statement No.7, Financial Instruments: Disclosures. After noting several deficiencies, the report offers several recommendations, such as companies should provide an executive summary of risk disclosures and the components of market risk should be differentiated into more specific categories. Download the report for free at http://tinyurl.com/ CFAReport, and watch for the second volume of the CFA study, which will offer a user perspective on disclosures of hedging activities. n
D.C. MOBILITY UPDATE >>
The ball continues to roll on the Washington, D.C., mobility front. On Oct. 11, 2011, D.C. Mayor Vincent Gray signed the Accounting Mobility Amendment Act, which allows for CPA practice mobility in the District. Following Gray’s signature, the bill went through a 30-day congressional review period. At press time, the bill needed to secure funding in D.C.’s upcoming FY 2013 budget, but CPAs and mobility activists in the area were hopeful that mobility would be effective in D.C. before the Jan. 1, 2013, licensing renewal date.
NEW REPORT >>
Setting sights on sustainability More and more small and medium-sized enterprises (SMEs) are making operational changes to implement sustainable models of business. So the American Institute of CPAs, the Chartered Institute of Management Accountants (CIMA) and the Canadian Institute of Chartered Accountants (CICA) got together to research the sustainable business practices of SMEs around the world.
firm or company’s sustainability goals and measurements. Communicating a clear definition is key.
If your firm or company is ready to implement sustainability, take a look at the takeaways in this comprehensive report, “SMEs Set Their Sights on Sustainability: Case Studies from the UK, US and Canada.”
TIE SUSTAINABILITY TO PROFIT: Much about sustainability is related to efficiency, which in turn affects profit. Develop clear goals related to efficiency and how it affects the bottom line.
In 2010, the three organizations surveyed more than 2,000 organizational leaders to investigate corporate sustainability initiatives. They found that one-third of smaller companies surveyed have a defined sustainability strategy, and 23 percent more will develop one in the next two years. If you’re in that boat, consider these top tips gleaned from the case studies: DEFINE SUSTAINABILITY AT YOUR COMPANY: Everyone needs to be on the same page when it comes to your
TAP IN TO THE RESOURCE NETWORK: Thousands of other companies are starting their own sustainability initiatives, and you don’t need to develop yours in a vacuum. Hook up with national and international initiatives and organizations for help.
The finance function in all organizations is critical to making sustainability stick, and CPAs are being asked to use their specialized skills to help develop sustainability initiatives. “Finance professionals are at the heart of the data gathering processes that enable an organization to show how well it is improving its performance around specific goals,” the report states. Check out case studies and get more tips by downloading the report at http://tinyurl.com/sustainabilityPDF. n
IFRS? Yes, CPAs say As American businesses remain in a holding pattern as far as implementation of International Financial Reporting Standards (IFRS) is concerned, the American Institute of CPAs (AICPA) surveyed CPAs to see how ready they really are. A (slight) majority — 54 percent — said U.S. issuers should be given the option to adopt IFRS, regardless of the U.S. Securities and Exchange Commission’s (SEC) decision to incorporate IFRS into the U.S. financial reporting system. Other key findings from the IFRS Member Readiness Survey include: • Eighteen percent of respondents believe the SEC should not allow IFRS adoption. • Forty-four percent are delaying IFRS preparations until the SEC reaches a decision. • Only 36 percent are aware of the SEC’s “condorsement” option, which refers to a hybrid approach of conversion and endorsement, standard by standard. n
BY THE NUMBERS >>
The percentage of VSCPA members who work in companies with 20 or fewer employees, according to the 2011 Member Needs Assessment.
Blacksburg on top for families Blacksburg beat out 4,169 contenders to be named the best place in the United States to raise children, according to Businessweek.com. The Southwest Virginia town, located in Montgomery County and the home of Virginia Tech, has excellent schools, low crime and an affordable cost of living, the website said. “More than half the population of Blacksburg, Va., is Virginia Tech students, so it may be easy to mistake this town of 41,383 as just another college town. Yet this small community, between the Blue Ridge and Allegheny Mountains, also has the makings of a great place to raise children,” the Businessweek article said. Nos. 2 and 3 are Arlington, Neb., and Morton Grove, Ill., respectively. Visit http://tinyurl.com/Blacksburgwins for more info. n RECOVERY IN REVIEW >>
The 411 on federal recovery funds in Virginia Each week, U.S. agencies report the funds announced, made available and paid out to each state from the Recovery Act. You can follow all things recovery-related at www.recovery.gov. As of Oct. 28, 2011, the recovery website reported that $6,540,221,569 has been paid to the Commonwealth. Here are a few federal agencies and their payouts to Virginia thus far: DEPARTMENT OF AGRICULTURE $586,567,459 DEPARTMENT OF EDUCATION $1,972,139,718 DEPARTMENT OF HEALTH AND HUMAN SERVICES
DEPARTMENT OF LABOR $769,903,904 DEPARTMENT OF TRANSPORTATION
For more on state numbers from the Recovery Act, check out http://tinyurl.com/2dkr7he. n DISCLOSURES
FACING THE MUSIC >>
CPAs discuss U.S. financial crisis Attendees of the VSCPA’s Fiscal Responsibility Town Hall Meeting on Nov. 9, 2011, heard the message loud and clear: CPAs can play a role in solving the country’s fiscal problems. The meeting, held at the CPA Center in Glen Allen, featured expert speakers discussing topics related to government debt, spending and dependency. Speakers were American Institute of CPAs (AICPA) Chair Gregory Anton, CPA; U.S. Government Accountability Office (GAO) Director for Intergovernmental Relations Stanley Czerwinski; Clifton Gunderson LLP Senior Advisor for Public Sector Services Edward Mazur, CPA; Virginia Tax Commissioner Craig Burns; VSCPA Board of Directors Chair-Elect John Montoro, CPA; and VSCPA President & CEO Stephanie R. Peters, CAE.
Edward Mazur, CPA, senior advisor for Public Sector Services at Clifton Gunderson LLP, is passionate about communicating the government’s issues of financial interdependence.
The speeches were followed by an open forum and a town hall discussion on the United States’ debt crisis and how CPAs can help. Approximately 80 people attended the event, including Virginia Del. Chris Peace (R-Hanover). Anton’s speech discussed the role of Generally Accepted Accounting Principles (GAAP) standard-setting
“CPAs are in a unique position to help inform people as well as to help bring more accountability and encourage responsibility in the fiscal environment.” – TOWN HALL MEETING ATTENDEE JAMES “TRES” BRACKENS, III, CPA
• JANUARY/FEBRUARY 2012
bodies in government accounting, notably the Federal Accounting Standards Advisory Board (FASAB) and its independence. He also discussed the U.S. government’s financial statements and urged the CPAs in attendance to review those statements in order to use their expertise to discuss the issue with the public. “At the end of the day, making people aware of how things are done and what’s going on is a step in the right direction to solving complex problems,” Anton said. He added that reviewing those statements would “help you be better professionals, whatever you do, whether you’re in business and industry, academia, public accounting. To have knowledge of what’s going on through your own eyes and your own perspectives is going to lead to all kinds of knowledge that you’re going to be able to transfer to others.” Czerwinski spoke about the fiscal positions of state and local governments and their relation to that of the federal government. “What you have are state governments who have their own sources of revenues that are very much tied to the health of the economy,” he said. “…The major stream of funding is probably not going to be sustained at that level.” Mazur — who co-wrote an article with Montoro titled “At the Tipping Point? How Intergovernmental Fiscal Dependency Affects Us All” that appeared in the March/April 2011 issue
of Disclosures and the October 2011 issue of the Journal of Accountancy — discussed that topic in his speech. He harkened back to a 1976 discussion with then-House Budget Committee Chairman Robert Giaimo (D-Conn.) about funding problems with the federal government and its pension obligations. “His response was, ‘If you think that the Congress is going to ask the American people to sacrifice resources today for a problem or a need that is 20 years hence, they’re never going to do it,’” Mazur said. “He said, ‘In fact, even if a crisis is afoot and the ceiling is beginning to collapse, they will still be reluctant to ask the American people to sacrifice.’ That very discouraging prophecy has become an even more discouraging reality.” Burns spoke on Virginia’s current budget and revenue issues. He echoed Mazur’s theme and touched on how fiscal issues at the federal level could affect Virginia’s budget, which is more dependent than many other states on federal money. “Part of the state’s long-range job growth and economic development efforts is to diversify our economy,” he said. “While we appreciate and welcome and enjoy the benefits of the federal spending, you want to start branching out and broaden your economy so you’re not so dependent and so susceptible to shocks that you have no control of going forward.” Montoro discussed the budgeting process and fiscal responsibility. He
Hope Cupit, CPA, a VSCPA member, chats with speaker Stanley Czerwinski, director for intergovernmental relations at the U.S. Government Accountability Office.
touched on the issue of health care, which he and Mazur highlighted as a key issue affecting the federal budget going forward. “If we don’t address health care and the entitlement programs, we might as well not even bother with the rest,” he said.
talents and training to communicate the message of fiscal responsibility to the public. The message was heard, loud and clear.
“You see all these trillions and trillions of debt,” he said. “It really isn’t any different than anything that any of us deal with on a daily basis. It’s just a little bit harder to have that family meeting.”
“I think it’s an issue that’s very important to the public at large right now,” VSCPA member James “Tres” Brackens, III, CPA, said, “And particularly to CPAs, because we’re in a unique position to help inform people as well as to help bring more accountability and encourage responsibility in the fiscal environment. “Coming to this event was kind of the first step into raising awareness and educating the very people that are charged with the duty of bringing about accountability and responsibility.”
The speakers charged the CPAs in attendance with using their particular
To view the speeches in their entirety, visit http://tinyurl.com/7pg4xjp. n
He also gave his “Fed Family” presentation, which uses the example of a family budget to simplify federal budget issues and can be viewed here: http://t.co/KIaVkha4.
BOARD of accountancy LIFETIMES OF SERVICE >>
Two members join VBOA If there’s one word that binds the two newest appointments to the Virginia Board of Accountancy (VBOA), it’s “service.” Barclay Bradshaw, CPA, and Bob Cochran, CPA, both made it a point to give back to the accounting profession during their careers, and now they’ll do it by helping shape the future of the profession in the Commonwealth. BARCLAY BRADSHAW, CPA It was a chance conversation that put Barclay Bradshaw on the path that eventually led him to the VBOA. During his junior year at the University of Richmond, Bradshaw took a part-time job with the local firm Gary, Stosch, Walls & Co. (GSW) upon learning of the position from his intermediate Barclay Bradshaw, CPA, enjoys spending time with his great-nephew, Rafe. accounting professor. He eventually accepted a full-time job with the firm, putting him in contact with several civic-minded CPAs who would shape his career. Astute readers will recognize one of the names in that firm. Walter Stosch, CPA, has served in the Virginia General Assembly. But he’s not the only GSW CPA who set an example — Bradshaw mentions Donald Dodson, Richard George, Mike Gracik, Scott Huzek, Bob Keiter and Larry Samuel as other influences in his career in public accounting. “They set an example,” Bradshaw said. “One, you do what’s necessary to comply with professional standards, whatever the cost is. Even if you do not get compensated for it, you have got to do it right.
“Secondly, you need to be active in your profession. They encouraged us to attend Richmond [VSCPA] chapter meetings and set an example by serving as officers themselves.” That example led Bradshaw, who now works at L.P. Martin & Co. in Glen Allen, to become active in the VSCPA himself. His passion for pushing the profession forward led him to the VBOA, and Gov. Bob McDonnell recently confirmed his appointment, which is retroactive to July 1 and runs through June 30, 2015. Bradshaw’s interest in public service began during his time at GSW and led to his work with the Richmond chapter of the VSCPA. He held several positions with that chapter and then moved to the VSCPA Board of Directors, where he eventually served as vice chair. Now he has a top-down view of the profession, serving on the board that enforces the standards all Virginia CPAs must follow. His motivation for seeking a spot on the VBOA? Maintaining the value of the CPA designation and protecting the public interest. “The profession has given a lot to me and my family,” he said. “A lot of people have spent a lot of effort to make those three letters mean something. This is just another way to contribute to the profession as well as serve the Commonwealth.”
BOARD of accountancy
BOB COCHRAN, CPA Bob Cochran is used to a big-picture view of the accounting profession. After two decades in the field, he transitioned to academia in 2001 and has spent the past eight years as an accounting professor at Longwood University.
IT’S NOT TOO LATE TO GO TO CPA ASSEMBLY DAY! >>
Now Cochran is going to get another view of the life of a CPA. McDonnell recently confirmed his appointment to the VBOA, retroactive to July 1. Bob Cochran, CPA, is an accounting professor at Longwood University.
If you’re looking for an opportunity to speak your mind to your legislator on issues affecting your profession, here’s your golden opportunity.
Cochran’s appointment is just the latest example of his interest in exploring all parts of the profession — and of his desire to pass on the lessons he’s learned in his career.
“Accounting has provided me with an exciting and rewarding career,” he said. “Academia is an environment that fosters the notion of service. Having received so much from accounting, I have a desire to give back. That is what motivated me to seek a position on the VSCPA’s Ethics Committee. When the VSCPA expressed a willingness to support my nomination to the Board, I welcomed the opportunity to serve in an expanded role.”
CPA Assembly Day will be held Tuesday, Jan. 17. Join leaders and staff as they meet with legislators to discuss issues affecting the profession and observe the General Assembly in session. Don’t worry … the VSCPA provides information on issues and helps guide you along the way.
That time on the Ethics Committee helped prepare Cochran for his new role on the VBOA, as he gained experience in investigating allegations of professional misconduct. That experience will be helpful, as his teaching job involves imparting those standards rather than enforcing them.
And if you can’t attend in person, watch the VSCPA’s e-newsletters for information on virtual participation and use the VSCPA’s new online advocacy tool to contact your state legislator to make your voice heard.
Cochran began his career in the Washington, D.C., area, at Peat, Marwick, Mitchell & Co., which eventually became KPMG. He spent several years in the mortgage banking industry before moving to academia full-time upon receiving his doctorate from Virginia Commonwealth University, which he calls “one of the best decisions I ever made.” Cochran is ready for the experience that comes with a spot on the VBOA, as well as the “on-the-job training,” as he puts it, that comes with it. “I do not come to the position with any agenda other than to provide service to the profession and the Commonwealth,” he said. “I do hope that my dual experience, both as an academic and a practicing CPA, will be of benefit to the Board.” n
Visit www.vscpa.com/ CPAAssemblyDay for more information.
BOARD of accountancy NOW ONLINE >>
VBOA publishes enforcement activity Staying in compliance with CPE requirements should be incentive enough to maintain your CPA license, but if it’s not, deficiencies are now being posted online. At its Nov. 2, 2011, meeting, the Virginia Board of Accountancy (VBOA) adopted a policy to publish the information of Virginia CPA licensees found to be deficient in continuing professional education (CPE) credit hours only in the event of a previous CPE deficiency finding or previous professional violation. Such subsequent CPE violations, in addition to other professional violations and disciplinary action resulting in suspensions and license revocations, will now be accessible on the VBOA’s website, www.boa.virginia.gov. The information will likely be published in the VBOA’s newsletter as well. This change is effective immediately for violations occurring in 2011 and beyond. Previously, the information was accessible via the Virginia Freedom of Information Act (FOIA), but was not published. Several state boards of accountancy across the country, including the North Carolina State Board of CPA Examiners, routinely publish some or all disciplinary actions. Earlier this year, the VBOA adopted a policy to publish all violations. In October 2011, the VSCPA submitted a letter expressing concerns specifically about the publication of CPE violations, after which the VBOA amended its original policy to forego publishing first-time CPE deficiencies. Are you in compliance with CPE regulations? Virginia regulations require that licensees required to obtain CPE must obtain at least 120 hours during the three calendar-year period previous to the current calendaryear. Licensees must obtain at least 20 hours of CPE annually, to include two hours of Virginia-specific ethics. Licensees who release or authorize the release of reports on attest or compilation services must obtain a minimum of eight hours of CPE annually related to attest or compilation services as part of the 20 hours annually, beginning in calendar-year 2011. A summary of CPE requirements is available at www.vscpa.com in the “Education” section. Also, investigation and enforcement information is on the VBOA website at www.boa.virginia.gov. If you have specific questions, contact the VBOA. The VSCPA is also here to help guide members. Contact VSCPA Technical Services Specialist Darshae Dabney at (804) 612-9406 or email@example.com. n
GOT YOUR EFIN? ACT NOW! >>
If you or your firm does not have an Electronic Filing Identification Number (EFIN), the Internal Revenue Service (IRS) urges you to get ready to meet new e-file requirements for 2012. Starting in January 2012, any paid preparer or firm that reasonably anticipates preparing and filing 11 or more Form 1040 series returns, Form 1041 returns or a combination of Form 1040 series returns and Form 1041 returns generally must use IRS e-file. To become an authorized IRS e-file provider, you must create an e-Services account at www.irs. gov, submit an EFIN application and pass a suitability check. The approval process can take 45 days or more. For a firm or an individual, only one EFIN is needed.
JLARC reviews Virginia tax preferences The Virginia Joint Legislative Audit and Review Commission (JLARC) released its draft Review of the Effectiveness of Virginia Tax Preferences on Nov. 14, 2011. Senate Joint Resolution 21 of 2010 directed JLARC to examine the effectiveness of tax preferences in Virginia. Tax preferences collectively reduced taxpayers’ liability by approximately $12.5 billion in 2008, representing nearly 90 percent of state revenue collected from tax systems reviewed. JLARC’s major recommendations to the General Assembly include: • The establishment of a joint subcommittee of the General Assembly to oversee evaluation of tax preferences and make recommendations • Directing the Virginia Department of Taxation (TAX) to conduct routine evaluations • The establishment of a technical advisory group to provide guidance and expertise • Requiring the joint subcommittee tasked with overseeing the evaluation of tax preferences to develop procedures, including which tax preferences should be reviewed, how often they should be reviewed and what performance measures should be used The report dealt with the goals of different tax preferences, whether intended to achieve tax policy or public policy goals, and found that Virginia tax preferences with public policy goals collectively reduced taxpayers’ liability by approximately $2.9 billion in 2008. Preferences intended to provide financial assistance and promote preservation appeared effective, but those promoting other ideas — including economic development and charitable goals — had mixed results.
The IRS has processed more than 1 billion electronically filed individual tax returns since e-filing debuted in 1990. DID YOU KNOW?
found that a legislative joint subcommittee could oversee tax preference evaluations to enhance their effectiveness. The study raised the question of whether the Commonwealth should continue to offer service exemptions to the retail sales and use tax. These exemptions were originally put in place by states because services did not constitute as large a portion of the economy as they do today, and taxes on services were considered to be difficult to enforce. According to the report, service exemptions reduced taxpayer liability by more than $3.5 billion in tax year 2008. The study estimated that the additional revenue collected by the elimination of such exemptions would “far exceed” potential administrative costs and that changing those exemptions could improve the reliability and equitability of the tax system. Virginia currently exempts 150 of the 168 “typical services” identified in a 2007 Federation of Tax Administrators survey.
Most financial assistance preferences intended specifically for lower-income taxpayers were not efficiently targeted, according to the report. Of seven major tax preferences targeted at taxpayers with low to moderate incomes, only the age deduction and the Low Income Tax Credit were deemed both effective and efficient.
According to the study, tax policy preferences account for more than three-quarters of taxpayer liability, with public policy preferences accounting for the remainder. The study also found that sunset dates are not consistently applied to Virginia tax preferences and rarely result in their evaluation or elimination, but that Virginia’s use of sunset dates is similar to the majority of other states.
No consistent mechanism currently exists to inform the Virginia legislature about the effectiveness of tax preferences. The study
Read the draft report on the JLARC website at http://jlarc.virginia.gov/meetings/November11/TaxPref.pdf. n
Forget the computer: It’s about the people Moving the IT perception beyond technology to information service delivery BY ERIC BENSON
Information technology (IT) is one area of any business that is marked by these characteristics: • Excellence is largely determined by a lack of issues. • The skill and knowledge to understand the complexities are not easily understood by most people. (It’s a specialty field, after all). • The most consistent trait is change, and this trait can be controlled, but seldom stopped. Information technology has never truly been about the technology itself. Computer science and computer engineering are about the computer and software. IT professionals may be viewed in many instances as manufacturing personnel (put this here, insert this, type this, install this). However, most IT people are really in the business of information service delivery. That’s “endpoint delivery” in geek terms.
In business terms, it simply means that the end result is a small step from face-toface communication. IT people are just delivering information through screens instead of direct communication — but it’s still a service. To change the perception of IT as a product to IT as a service, new terminology may be needed. Since accounting is a service, let’s call our new model “information service delivery.” This term suggests a shift from the computer (or screen, as we shift more to multiple delivery platforms) to the point at which the screen and the person interact. Looking at technology as … well, technology, tends to reduce the quality of output to the end user (translate this as person). In other words, since you aren’t providing a service, you can get away with fixing the computer and call the problem fixed. If you look at IT as information service delivery, however, you also have to qualify if the information was delivered properly after service was performed, not just that the computer is working. Taking the leap from technology to people can radically improve IT’s level of service, understanding of the IT job and IT’s contribution to the people working in the firm. Let’s revisit the three statements above and look at how shifting to a service model can improve the quality of IT.
Taking the leap from technology to people can radically improve IT’s level of service, understanding of the IT job and IT’s contribution to the people working in the firm. EXCELLENCE IS LARGELY DETERMINED BY A LACK OF ISSUES. Many technology issues can be benchmarked on this alone. Help-desk ticketing solutions are set up to let you resolve tickets when the issue is gone. They’re even called issues or tickets in most systems — because you’re dealing with computers or other devices, right? IT issues are approached like an assembly line. Contrast this with information service delivery. In this instance, a problem isn’t fixed until the information is resolved, not the issue. So an issue with a faulty computer driver might not stop at just updating the driver — it will stop when the displays are verified as working by the user. I think this, in many cases, is very different from the way the IT person uses the displays. A follow-up two days later may uncover that the assumption for the fix wasn’t quite correct. Is the information flowing again? This follow-up can be automated, but is that good service? Selecting a subset of tickets to call on
might be a great way to see if you are truly providing what you think you are. Other issues are not pure IT and shouldn’t involve just IT. A failed patch is an IT issue, let’s say. But when the patch has been rolled back, what if you find out someone is having trouble using writeup properly during the patch removal (since you have to do it in person on the one machine that didn’t take)? That’s an information service delivery issue and might not involve you directly — but you can be accountable to make sure the issue gets resolved.
THE SKILL AND KNOWLEDGE TO UNDERSTAND THE COMPLEXITIES ARE NOT UNDERSTOOD BY MOST PEOPLE. As an IT professional, specialized knowledge is crucial to complete projects. However, communication is also crucial to the successful delivery of these projects. On teams, this may not be the person
• JANUARY/FEBRUARY 2012
who does the work, but a successful information service delivery should include the business and information delivery reasons why a project was completed successfully, not just what was done. Most often, the heavy lifting in IT is not communicated because of the specialty knowledge needed to understand what happened. However, this often bleeds over into areas that don’t need specialty knowledge. Thinking with a service delivery mindset may allow these areas to shine through, which will in turn allow for improved communication. In addition, that communication, since it is part of the service, will need to be catered to the recipient. You wouldn’t sell a highly technical watch that needs some assembly to someone looking for a stopwatch. So why would you want to communicate more than you need to in order to let someone know their problem is resolved? There is a balance between what was done and why that change was important to the person reading or listening to the message.
THE MOST CONSISTENT TRAIT IS CHANGE. In the IT world, the reaction to change is often loudest in the gadget area, as well as in the camps that are stalwarts for technology that is “tried and true.” In the business world, technology can be delivered too often for comfort for some. For others, it doesn’t come frequently enough to keep up with the times.
If not, it might be a good candidate for re-evaluation. Sometimes, it’s a patch that will fix a lingering issue. Other times, you may be switching out a system without a strong information case — which in some instances is not evaluated properly in the business case for an upgrade. “This will give us a competitive advantage because we’ll be ahead of our competitors” is business language, but says nothing about the quality of information being delivered. Let’s say a software upgrade fundamentally changes the three key screens of an application. Although it gives a competitive advantage, the information will not flow as cleanly after the upgrade. Understanding this and acting on it will help to improve IT from installer to enabler. Consider information service delivery as a great way to consider how IT provides value to a firm. An example would be: “A change is happening Saturday morning to improve the review process during X.” This is much easier to digest than: “Release 6.208 of X package will be installed on Saturday morning.” The first sentence states how information delivery changes; the second merely states what is being installed. The typical IT response is what was done, not what value the change provides. This shift in communication is crucial to helping your firm adjust to whatever change is coming.
Think about change using an information service delivery mindset. Will this change help the information being delivered?
Communication using an information service delivery model may initially increase ticket resolution times. In the long run, however, that communication improvement will help everyone in the firm. Issues will be completely fixed, reducing re-emerging tasks. Updates and system downtime will be assessed based on what is being improved, not what dot release is coming online. And you and your firm can start to benchmark the success of technology on things beyond uptime, service level agreements and other metrics. Things like satisfaction indexes and quality feedback will start to drive an improvement in service that may affect all departments in the firm. The longer information as a service is taken into account during IT projects, the more end users will become allies in transitions and updates. Translation will become easier between technology and business, and understanding of IT projects will improve. Look for those in your team (or your firm) who can view IT as information service delivery and use those people to increase the quality of information you deliver. You will be part of the engine in your firm that develops people because your service and communication will be concerned with how they work, not what they use. Look at ways you can start improving service to your firm. The change will take time, but the change is worth the cost. n
ERIC BENSON is chief technology officer at Boomer Consulting, Inc., where he innovates and develops technology services that enhance internal operations. Contact him at firstname.lastname@example.org.
Attention CPAs: Whether A Decision Maker Looking To Upgrade Your Talent, Or A CPA Looking to Upgrade Yourself/Your Skills, Ask Yourself: Who really chose who in joining your company? Are you/your professional staff really at the right level where you should be/you need them to be? Are you/your staff in a position that truly suits your/their personality, values, and professional and personal needs?
Why leave your future to chance? If you’re seriously interested in making the “right” move for your next hire, I can help you. I am an actively licensed CPA in Maryland and Virginia with over 20 years of experience including public accounting (E&Y) and consulting (KPMG), financial accounting (American Cancer Society), internal audit (Moneyline Telerate), and recruiting (Acsys, formerly Don Richards). As a networker who truly enjoys helping others and sharing my career experiences to guide fellow professionals, here is how I can help you: Decision Makers: Ask you questions, and most likely ask many more questions than other recruiters about your company, duties involved, skills required, corporate culture and more Work with you on finding the “right” professional that is the “right fit” Provide you with valuable information about the professionals I work with, the marketplace, what your competitors pay, and more Career Seekers: Guide you on career paths available in public accounting and industry Enable you to capitalize on your strengths Coach you on how to put your best foot forward to find the “right fit” Advise you when to stay in your current position if that is the right move If you’re interested in working with a recruiter who understands your background, skills, and is genuinely interested in helping you find the “right fit”, then I welcome meeting you!
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Counting On Culture Creating a culture is not always as easy as 1, 2, 3 BY JUDITH A.M. BROOKS, SPHR
When I was barely 4 years old, my grandmother taught me to count by piling used strike-anywhere matches in front of me on the kitchen table, coaching patiently if I tripped on a number. I wasn’t allowed up until all of the tiny wooden sticks were stacked neatly into groups of five and orally tallied, which usually left cinder smudges on the bleached linoleum cloth. Meanwhile, crispy bacon and pancakes flew off the stove to feed the half-dozen other kids left in her charge, also pupils in her bustling kitchen. After the other kids had been picked up by mothers working at the five-and-dime or Goolrick’s lunch counter, we’d sit in the front porch swing at dusk and counter the heat with cool lemon sherbet. Again, we counted. Using a long ice tea spoon to reach the bottom without getting our fingers sticky, we’d scrape thin curls of the tangy iced confection out of the carton, counting each mouthful. If I got the count right, I got another cool spoonful. Even though this was before the era of regulated day-care centers, Grandma Wright was ahead of her time. She
wasn’t just providing a good service; she was promoting a learning culture within her small child-care business.
for our survival; peeling layers of onions to a core; electricity; the glue that holds a business together; and much more.
In its simplest form, a culture is often defined by how you go about doing things.
LESSON 1: RECIPE FOR STRATEGY OR DISASTER?
What’s all the hoopla about creating and managing our organization’s culture anyway? Google “corporate culture” and you’ll get more than 150,000 hits — a modest amount considering that the term first emerged back in the 1980s when Harry met Sally. It was then that the popular business book, “In Search of Excellence,” introduced the corporate culture concept. Since then, getting everyone to agree on a common definition is akin to nailing gelatin to the wall. Organizational culture has been described as synonymous with the air around us, intangible but crucial
Many ingredients factor into what shapes an organization’s culture. Most are grown over long periods of time, and interruption to the established norm, such as a merger, can be most painful. In short, most people resist cultural change. Popular books such as “Who Moved My Cheese?” became workplace primers for managers trying to keep staff engaged following the tsunami of downsizing. Without great leadership or HR assistance to guide a firm through a solid change management process, such as an acquisition by a very culturally different organization, a historically great culture can downshift to a culture of fear (and reduced productivity), losing valuable staff before you can sharpen your No. 2 pencil. In today’s economy, many CPA firms struggle to grow their client bases while sustaining the centers of influence as outgoing partners retire. While passing
those “Happy Retirement” cards around, be sure to take this time to revisit your cultural strategy. As the battle for new accounting talent continues to wage, multiple generations in the workplace now pose new challenges as golf game chat gives way to tweets. Differing values, work habits and priorities emerge. So you’ve got generational diversity … That’s great, right? It should be, but now you’re tasked with ensuring your cultural strategy (think policies, recruiting, technology, performance management, training, etc.) are also diverse enough to be user-friendly across all generations.
LESSON 2: THE DEFINITION DILEMMA Why is corporate culture so important if we can’t even agree on a definition? Probably because they are all valid descriptions. No matter what you call your culture, or even if you choose not to label yours, you’re kidding yourself if you think your firm does not have one; and if you don’t intentionally manage it, others will do it for you. To manage culture, take a good look
Organizational culture has been described as synonymous with the air around us, intangible but crucial for our survival. at what it is to begin with. To simplify, at its most basic level, your firm’s culture is how you get things done. The answer to this has a powerful effect on how others, including employees, clients and competitors, view your firm. For starters, your employees care because it directly affects their day-to-day work and overall career. If you have a culture of learning, perhaps one of the most important cultural values for an accounting firm alongside honesty and integrity, you will attract job candidates more easily than firms that are skimpy on vital CPE support. At PBGH, for example, we built on an existing organically grown culture of integrity and reputable client service. Tapping into our McGladrey Alliance for guidance, we adopted a career advisor mentoring process. We invested in knowledge platforms that enable staff of all levels to select from multiple CPE resources. We rewarded milestones and behaviors. We also embraced technology by becoming “paperless,” scanning engagements as they hit the door. The firm’s leadership was accurate to selfidentify our culture as one of integrity, learning and innovation. However, if you really want to know how your culture is viewed, ask the people who experience
it first-hand every day. Consider conducting an employee survey or host focus groups on the topic. These activities generally “peel the proverbial onion” and meet with the greatest success. At PBGH, a recent employee survey that encouraged comments revealed that our “trust in employees as professionals” was a very recognized and appreciated subculture; the firm entrusts staff to get the work done. In turn, their “Life 101” needs are met by having the flexibility to attend a child’s school play or deal with the plumber. This was extremely high on the staff ’s list of how we do things here. You can bet that when they talk to prospective candidates, this view is mentioned. Once you have decided as a firm what your culture is and/or should be, don’t assume it can go on auto-pilot, and don’t think you can wish for it and wait for it to appear. Cultures are built on behavior, and leadership must set the example. The minute employees see that leadership is not “walking the walk” and modeling the attributes touted in the firm’s cornerstone docs, you might as well shred your mission and vision statements along with last year’s draft returns. Behaviors worthy of accolades, not charades, are what employees will trust and mimic. Keep your culture tuned up through regular interactions between your advisors and
advisees, conduct focus groups that discuss survey results or other key issues and enlist Human Resources to help your leadership team stay in touch.
LESSON 3: THE STAKEHOLDERS After all, it’s not just the folks already at the firm who care about your culture. Aspiring partners and astute job candidates should learn everything they can about a firm’s culture before accepting a job offer. They should explore the website, looking to see if the values of the prospective firm align with their own, as well as to spot other cultural cues. Today’s savvy new job seeker will visit social networking sites to build a profile on the firm, perhaps linking up with a current employee. It’s never inappropriate to ask questions about the company culture as part of the interview process. It’s crucial to see if the factors important to the candidate are evidenced by the culture. For example: • What is the size of the firm? • Do they encourage client interaction? • Is the office business casual or beltway attire? • Are new associates visible and able to make a difference at the firm? • Do the partners have an open door policy? • Is the preferred area of accounting an existing client base? • How will CPE and training be supported? • Does this firm give back to the
community? • Will a mentor be assigned? In similar fashion, the firm should size up a candidate’s cultural fit during the interview by asking behavioral questions to elicit how the candidate’s decision making aligns with the firm’s values, such as being a team player.
LESSON 4: ONE FIRM, ONE CULTURE? While a firm may have several identifiable cultural attributes, such as innovation and learning, employee dissatisfaction lurks when a single firm permits or ignores the presence of different cultures across different departments or locations. Mid-sized and/or regional firms can have visible differences that vary from office to office, and even smaller firms can experience inconsistencies that scream “NOT FAIR!” between departments or ranks. Splintered cultures should be avoided by synthesizing the firm’s policies, tools, processes and values across all groups and/or locations. At PBGH, our policies are applied uniformly across our four regional Virginia offices. As important, we also adopted a company-wide automated performance management system (Halogen). This allows our core competencies and pay-for-performance criteria to be uniformly administered across the firm. Many products exist that are both affordable and scalable, so even small firms can and should consider
automating performance management these days as one way to create uniformity. In addition, smaller firms without certified HR staff should consider joining a formal alliance of similar firms in order to gain access to HR resources. Although a business case can sometimes justify a need for policy differences, such as a difference in state laws, whenever possible, your employee policies should be applied consistently across the firm. Otherwise, employees will be less than receptive to the culture of “Why not me?” that you may inadvertently create. Experts say that cultural inconsistencies can result in reduced productivity and trust in the firm, as employees become less motivated to put forth their best effort.
COUNTING THE RESULTS A weak culture can result in having little to no relationship between the staff ’s behaviors and performance and the firm’s values. In turn, the firm’s only option is usually to (attempt to) influence the desired employee behaviors by enforcing
heavy-handed, often laborious policies or procedures. The less-than-attractive results can then be measured by increased employee turnover, poor performance and even a loss of clients. On the other hand, research (and common sense) shows that firms who promote and manage a clearly defined, mutually beneficial culture are giving employees good reason to willingly embrace and make meaningful contributions to the cultural landscape. Employee morale is boosted, teamwork thrives and client service benefits. There’s an old adage that purports people will seldom remember what you say, but will always remember what you do. This is the essence of culture. It’s how you do things, and how your employees, clients, competitors and job candidates all will view you. Assessing your firm’s culture and taking steps to manage it in order to obtain the desired result is an investment in the firm’s most valuable asset: human capital. Now that’s something worth counting on. n
JUDITH A.M. BROOKS, SPHR, is director of professional development at PBGH, LLP, in Fredericksburg, where she supports the firm’s strong learning culture. Contact her at email@example.com.
The Culture of a Connector A profile of Christopher Helmrath, managing partner at SC&H Group, LLC BY GORDON BERNHARDT, CPA
As a child, Chris Helmrath always knew he was loved. His father, a neonatologist who also graduated from a top 10 graduate business school, however, had his own unique way of showing it. “He’s not the kind of person you sit around with on a Sunday, watching sappy movies and talking about your girlfriend,” Chris laughs. “With him, it was always about achieving your potential and not accepting average results. We were forbidden from getting a ‘C’ on our report cards and could not watch television unless we read books, which he would quiz us over to make sure we had done a good job.” Indeed, Chris and his siblings learned the value of a strong work ethic from the beginning, always understanding that failure was not an option. Now the managing partner of the Northern Virginia office of the SC&H Group, LLC, a CPA and management consulting firm, Chris has cultivated this lesson over the years into an enduring and powerful frame of mind that lends a unique edge to all that he does. “I’m not willing to accept mediocrity,” he readily acknowledges. “I push and push and push.”
FROM THE EDITOR
Sometimes the best way to gain inspiration for your career, or improve your firm or office, is to study the career paths and work ethics of others. To that end, watch for a few profiles of Virginia-based executives and CPAs this year in Disclosures.
‘THE ART OF GETTING ALONG’ Chris’s upbringing, however, was by no means all work and no heart. In fact, he remembers the stories of his grandfather’s examples of unwavering kindness as among the most influential lessons of his life. His grandfather had dropped out of school in the eighth grade to support his mother and sister after his father’s untimely death, later overcoming all odds when he was named president of the Passenger Division of the Illinois Central Railroad. He was also one of the original founders of the Sugar Bowl in New Orleans. Upon Chris’s graduation from high school, his grandparents gave him a framed print titled, “The Art of Getting Along,” which advocated compassion, friendliness and patience in all that one does. “He knew everybody in New Orleans and he shook everyone’s hand,” Chris remembers. “It was remarkable how he connected in the business community without a formal education, accomplishing such tremendous things with his charisma and personality.” Today, Chris’s leadership philosophy unites the work ethic learned from his father with the benevolence learned from his grandfather and lends an invaluable contribution to SC&H, both in terms of its culture and its bottom line. SC&H is a conglomerate of 265 financial professionals who specialize in developing accounting, tax, management consulting and investment banking solutions for an extensive range of
clients. Founded in 1991 in Baltimore, the firm has offices in the Baltimore and Washington, D.C., metropolitan areas with a smaller office in Atlanta, and it serves clients across the United States. The firm’s revenues are proportioned equally between its audit, tax and consulting practices and its revenue growth rate has averaged more than 25 percent annually since its inception. Since Chris signed on with the firm in 2005, SC&H has grown by 2.5 times across the firm as a whole. The Tysons Corner office, however, has followed a different trend. It had fewer than 10 employees when Chris started and now clocks in at nearly 40. “We see this office as probably the greatest growth opportunity SC&H has right now,” he reports. “Thus, we’re very focused on investing, hiring and getting in the market to grow as much as possible.” When Chris began with SC&H’s Baltimore group, he had no idea he would later be asked to serve as managing partner for Northern Virginia. Certainly his business development potential was impressive and untapped, having taught in two graduate schools for 15 years and also building a strong presence in financial services and in the nonprofit realm for his contributions to the surrounding community. Such alliances speak to a skill set often lacking in the public accounting world — one that blends the diverse challenges of managing people, managing growth and maintaining market presence. Chris’s career in the financial services
industry first began with the acquisition of banks for a Fortune 100 company based in Chicago, originally coming to Northern Virginia to buy failed savings and loans and build the brand out into Maryland. Early on, he was quickly taken under the wing of the regional president, who became a trusted mentor by opening many doors for Chris along his path toward success. “John gave me opportunities that a 23-year-old should never have,” Chris laughs now. “Knowing I wanted to go to graduate school, he sat me down in his office one day and said he wouldn’t promote me until I got my MBA.” Two days later, Chris took the GMAT and quickly enrolled at Loyola University, graduating first in his class of several hundred despite balancing school and work with the challenges of becoming a father. Though Chris eventually departed from that industry after deciding that it held no long-term viability for him, he never forgot the invaluable tools he had collected through the experience. “I’m a connector,” he remarks now, commenting on his respect for the role of relationships in personal growth. “I have learned that every relationship has a purpose in your life, even if you may not understand it today. Never forget who people are, because it is people that will help you get where you’re going.” Chris later joined the accounting and tax group of American Express, which was the ninth largest accounting firm in the United States at the time. Such opportunities lent him a tremendous wealth of knowledge, not only in the technical aspects of his trade, but also
in employee development, training and group management. The resulting alchemy of expertise would prove to make all the difference for Chris and his career at SC&H. “If you watch any business evolve, you need people that are growers and people who are maintainers,” he points out. “I’m not a maintainer, I’m a grower.” Drawing upon his extensive and textured expertise in investment banking, Chris now serves as president and principal of SC&H’s FINRA-regulated merger and acquisition services practice, SC&H Capital. This entity entails 10 professionals focusing in investment banking, business valuation, strategic planning, debt and capital raise, offering a truly unique service in the field and serving as a testament to the creative, outside-the-box culture that SC&H is proud to call its own.
CULTURE MATTERS Above all else, SC&H is about culture. “Culture is our No. 1 corporate objective,” explains Chris. “It’s the first litmus test in examining any next step for us, be it a possible acquisition or something else. If it doesn’t fit within our culture, we won’t do it.” Through its innovative and imaginative method of managing people and creating environments and career paths, the firm challenges the traditional mold of the accounting industry’s accepted firm structure in virtually all that it does, and this capacity toward originality has won SC&H an employee turnover rate which is about a third of the industry-wide figure. Respect and integrity are of paramount importance for Chris and his team, and this entails a very unique attitude toward both clients and employees alike.
“At SC&H, no employee has billable hour goals,” Chris reports. “Our job as partners is to monitor and manage across the line and make sure we’re delivering to our clients what they need. We focus on not burning anybody out and are continually assessing every situation to ensure that we have the right resources at work on each job.” This attitude allows the firm to skirt the bureaucracy that so often strangles the work-life balance at other firms, engendering an atmosphere of collegiality and equality. This company culture allows the partners at SC&H to develop lasting and genuine relationships with their clients just as
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PRACTICE management diligently as they develop products and solutions that work. “We want the client to be as delighted about the work product we’ve done as they are about working with us,” Chris explains. “Churning out employees and clients is simply not what we do here. At the beginning and end of each day, we ask ourselves, are we doing the right thing?” In ensuring that the answer to this question is a perpetual and resounding yes, Chris sees himself as a servant just as much as he sees himself a leader. Honoring the mantra, “Do what ought to be done but would not have been done unless I did it,” he holds that there is no job he’s unwilling to do and no statement he’s unwilling to make. “Everything we touch leaves a mark,” Chris observes. “That’s what I enjoy most. If you can help someone see something, or see through something, or think better and differently about something, that’s my favorite part of the day.” What makes Chris’s philosophy so unique, then, is its keen awareness of each person’s ability to affect the world and the essence of responsibility that necessarily accompanies that reality. “No one human being can motivate another,” Chris points out. “You can only create an environment in which one motivates himself. We all have the ability to create an environment that affects others, and using this power to maximize someone’s potential — that’s what it’s all about for me.”
mother the passion it takes to truly affect environments in a meaningful and lasting way — through education. “With a father who taught in a medical school and a mother who was a kindergarten teacher, teaching became such a critical part of my world,” he remarks now. When he first began teaching at Loyola University, it quickly became apparent that teaching was a true passion — a way to give back. Chris’s teaching career spanned across two graduate business schools and 19 years, where he ultimately ran the MBA Capstone Program for the Carey Business School at Johns Hopkins University. Reflecting back on instances when prior students of his would approach him outside of the classroom to let him know how meaningful his lessons had been, Chris considers such moments to be lessons in themselves. “That’s a ‘Wow, I did something right’ moment,” he emphasizes. In 2003, the Johns Hopkins University named him the top teacher in the business school by granting him the Excellence in Teaching Award, and he considers this to be one of his greatest professional achievements.
THE IMPORTANCE OF ATTITUDE If his father imparted the value of work ethic and his grandfather imparted the value of kindness, Chris draws from his
“At SC&H, we believe that giving back is a fundamental piece of who we are. I was very fortunate, having a family that taught me so much and now being able to give back through teaching.” So, when Chris is speaking to a classroom full of entrepreneurs poised to venture into the workforce, what invaluable idioms does he choose to impart? His resounding message is the importance of attitude. Through attitude, one can grasp work ethic by wanting something more than the next person and acting accordingly. Through attitude, one can grasp heart by treating others as you would want to be treated. And through attitude, one can take the raw materials of life and mold environments that engender success, happiness and progress, both for others and for themselves. “So many people are frozen when confronted with ambiguity,” he says. “Dealing constructively with ambiguity is really all about attitude.” By wielding attitude in this manner, one can hope to enter the business world with grace and gusto, fervor and poise. n
GORDON J. BERNHARDT, CPA/PFS, CFP®, AIF®, established Bernhardt Wealth Management, an investment advisory firm in McLean, in 1994. For more information, visit www.bernhardtwealth.com or read Gordon’s blog at http://gordon-bernhardt.blogspot.com. Contact him at firstname.lastname@example.org.
Submitted and reprinted with permission by local financial advisor Gordon J. Bernhardt, CPA, PFS, CFP®, AIF®, author of the book “Profiles in Success: Inspiration from Executive Leaders in the Washington D.C. Area.” The book was developed in conjunction with interviews conducted on Executive Leaders Radio, and highlights personal stories and words of wisdom from a diverse group of business leaders in and around D.C. To purchase a copy of “Profiles in Success” ($24.99), contact Gordon Bernhardt at (888) 356-4380 or visit http://tinyurl.com/6nee25w.
Save the Date — 2012 Conferences Stay up-to-speed through the VSCPA’s live, group update conferences. No matter what your areas of interest are, VSCPA conferences can help you get the CPE and networking you need. Be on the lookout for more information about this year’s conferences: • March 13: NEW! 2012 Virginia State & Local Government Day • April 23: 11th Annual Government & Nonprofit Conference • May 14: 42nd Annual Accounting & Auditing Conference (Northern Virginia) • May 21: NEW! 2012 Specialized Industries Conference • May 22–23: 11th Annual Industry Conference • June 11: NEW! 2012 Women’s Symposium • June 14: Employee Benefits Symposium • Sept. 20–21: 13th Annual Business Valuation, Fraud & Litigation Services Conference • Sept. 24–25: 42nd Annual Accounting & Auditing Conference (Roanoke) • Nov. 5–6: 22nd Annual Professional Development Conference • Nov. 13: 3rd Annual Government Contracting Conference • Nov. 15–16; 42nd Annual Accounting & Auditing Conference (Virginia Beach) • Dec. 13–14: 4th Annual Technology Conference
To learn more, visit www.vscpa.com/Conferences. DISCLOSURES
The New (and Improved) Auditor’s Report BY PAUL M. CLIKEMAN, PH.D.
As part of the Auditing Standards Board’s Clarity Project, auditors will soon
1. TITLE: The report title must contain
be required to change the form and content of their audit
the word “independent” to affirm that the auditor has met all the relevant ethical requirements regarding independence.
reports. The new auditor’s report, which is effective for
2. ADDRESSEE: The auditor’s report
audits of financial statements for periods ending on or after Dec. 15, 2012, is the first major revision of the standard auditor’s report since Statement on Auditing Standard (SAS) No. 58 was issued in 1988. The revised report is intended to improve users’ understanding of managers’ and auditors’ respective roles in the financial reporting process. The new report contains an expanded description of management’s responsibility for designing, implementing and maintaining internal controls, and preparing the financial statements in accordance with Generally Accepted Accounting Principles (GAAP). An expanded three-paragraph overview of the audit process retains the caveat that an audit provides only reasonable assurance, adds an explanation of the
auditor’s use of judgment in assessing risk and designing audit procedures, and concludes with a statement that the auditor has obtained sufficient appropriate evidence to provide a basis for an opinion on the financial statements. Table 1 (on page 31 to 32) contains an example of the new auditor’s report and identifies several significant changes from the SAS No. 58 report. The new standard unqualified auditor’s report contains nine components:
should be addressed to the primary users of the report. For a corporate client, the report will usually be addressed to those charged with governance, such as the corporation’s officers and directors. A report for an unincorporated client may be addressed to the proprietor, the partners or other appropriate parties. 3. INTRODUCTORY PARAGRAPH:
The first paragraph of the auditor’s report states that an audit has been performed and identifies the entity whose statements were audited, the title of each financial statement audited and the date or period covered by the financial statements. The language in the introductory paragraph is similar to the SAS No. 58 audit report except that the new report specifically mentions that the financial statement notes are included in the scope of the audit.
4. MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS:
Whereas the SAS No. 58 report contains only a single sentence in the introductory paragraph stating that the financial statements are the responsibility of the company’s management, the new report explains management’s responsibilities in a separate paragraph identified by its own section heading. The report states that management is responsible for the “preparation and fair presentation” of the financial statements in accordance with GAAP. In addition, the new report explains management’s responsibility for designing, implementing and maintaining a system of internal controls relevant to financial reporting. 5. AUDITOR’S RESPONSIBILITY:
The new report contains three paragraphs describing the auditor’s responsibilities. The first paragraph states the auditor’s responsibility to express an opinion on the audited financial statements, and includes the caveat that an audit provides only reasonable assurance, within the context of materiality. The second paragraph explains that auditors exercise judgment to assess risks and choose audit procedures, and although auditors consider the client’s internal controls while assessing risks and gathering evidence, the procedures performed during a financial statement audit are not sufficient to permit the auditor to express an opinion on the effectiveness of the client’s internal controls. A brief third paragraph states the auditor’s belief that the evidence obtained during the audit is sufficient and appropriate to provide
a basis for an opinion on the financial statements. 6. AUDITOR’S OPINION: A new section
heading identifies the final paragraph of the standard unqualified auditor’s report as the auditor’s opinion. The language is the same as the SAS No. 58 auditor’s report except for using the word “accordance” instead of “conformity” to describe the financial statements’ compliance with GAAP. 7. AUDITOR’S SIGNATURE: The
auditor’s report should include the handwritten or printed signature of the auditor’s firm. 8. AUDITOR’S ADDRESS: In the United
States, the auditor’s report should name the city and state of the issuing office. Auditors outside the United States should identify their city and country. 9. DATE OF THE AUDITOR’S REPORT:
Consistent with SAS No. 103, the report should be dated no earlier than the date on which the auditor has obtained sufficient appropriate audit evidence on which to base an opinion on the financial statements. Furthermore, the report should not be released to users prior to completion of the engagement quality control review.
CONCLUSION SAS No. 58 was issued more than 20 years ago with the goal of narrowing the expectation gap between auditors and financial statement readers. Unfortunately, public opinion surveys still find widespread misunderstandings about managers’ and auditors’ respective responsibilities for the financial statements. And few people, other than auditors, understand the process of performing an audit. The new report clarifies management’s responsibility for designing, implementing and maintaining the company’s internal controls and preparing financial statements in accordance with GAAP. An expanded section about the auditor’s responsibility explains that the procedures performed and the evidence gathered on any given audit depend on the auditor’s judgment and assessment of risks. The new auditor’s report represents the Auditing Standards Board’s most recent attempt to help auditors communicate more effectively with the millions of people who rely on audited financial statements. n
PAUL CLIKEMAN, PH.D., is an associate professor in the Robins School of Business at the University of Richmond, where he teaches auditing, managerial accounting, financial accounting and business assurance services. Contact him at email@example.com.
TABLE 1: CHANGES TO THE STANDARD UNQUALIFIED AUDITOR’S REPORT >>
The letter on the left shows how a current unqualified auditor’s report should read under SAS No. 58. The letter on the right shows how the report will read with the changes effective for periods ending on or after Dec. 15, 2012.
SAS NO. 58
CLARIFIED STATEMENTS ON AUDITING STANDARDS
Independent Auditor’s Report
Independent Auditor’s Report
To the Directors of PMC Company:
To the Directors of PMC Company:
We have audited the accompanying balance sheets of PMC Company as of December 31, 2011 and 2010, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We have audited the accompanying financial statements of PMC Company, which comprise the balance sheets as of December 31, 2012 and 2011, and the related statements of income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance
The introductory paragraph specifies that the notes are an integral
component of the financial statements. 
The new auditor’s report contains section headings to identify the sections explaining management’s responsibility for the financial statements, the auditor’s responsibilities and the auditor’s opinion. 
Management is responsible not only for preparing the financial statements but also for ensuring that the statements are presented fairly in accordance with GAAP. 
Designing, implementing and maintaining appropriate internal controls are identified in the new report as necessary components of management’s responsibility for preparing the financial statements. 
Consistent with SAS No. 99, the new auditor’s report explains that misstatements may be caused by either fraud or error.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain
TABLE 1: CHANGES TO THE STANDARD UNQUALIFIED AUDITOR’S REPORT >>
SAS NO. 58 about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PMC Company as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. BUTCHER & BAKER, LLP
audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
February 24, 201
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
The new report explains that auditing is not a mechanical process. The procedures performed on any given audit depend on the auditor’s judgment and assessment of risks. 
The new report explains that although the auditor considers the client’s internal controls in assessing risks and designing audit procedures, the auditor expresses no opinion on the effectiveness of the internal controls. 
Consistent with SAS No. 106, the section explaining the auditor’s responsibility concludes with a statement that the auditor has obtained sufficient and appropriate evidence to provide a basis for the opinion. 
The new opinion paragraph uses the word “accordance” instead of “conformity” to describe the financial statements’ compliance with GAAP.
CLARIFIED STATEMENTS ON AUDITING STANDARDS
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PMC Company as of December 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. BUTCHER & BAKER, LLP Richmond, Virginia February 24, 2013
VSCPA self-assessment Complete this 12-question test and submit to the VSCPA for 1 CPE credit. Exams will not be graded until after the submission deadline. A 75 percent or better pass rate is necessary to receive credit. After your exam is graded, you will receive either a certificate of completion via email for your records or an email notification that the 75 percent grade was not met.
SUBMISSION DEADLINE: Feb. 29, 2012. Exams received after this date will not be graded and your money returned. COST: $15 for VSCPA members / $30 for nonmembers. Please note that this exam will not be live online until Jan. 1, 2012. SUBMISSION INSTRUCTIONS You may submit this selfassessment and make the exam payment online at www.vscpa.com/ January2012DisclosuresExam. You may also circle your answer to each question and mail this paper exam to: CPE Team Virginia Society of CPAs 4309 Cox Road Glen Allen, VA 23060 Fax submissions are acceptable to (804) 273-1741. Name _________________________ Address _______________________ _______________________________ Email Address ___________________ Date __________________________ Method of Payment
• Check (payable to the VSCPA) • Credit card Credit Card Number _______________________________ Expiration Date ________________ Signature _____________________ Date
1. AT THE VSCPA’S FISCAL RESPONSIBILITY TOWN HALL MEETING ON NOV. 9, 2011, ATTENDEES LEARNED THAT: a. CPAs can review the government’s financial statements and use their expertise to discuss issues with the public. b. State governments have their own sources of revenue, which are tied to the health of the economy. c. Virginia’s budget is more dependent than many other states on federal money. d. All of the above. 2. IN REVIEWING THE EFFECTIVENESS OF VIRGINIA TAX PREFERENCES, THE VIRGINIA JOINT LEGISLATIVE AUDIT AND REVIEW COMMISSION: a. Did not recommend the establishment of any committees to oversee evaluation of tax preferences. b. Found that Virginia tax preferences with public policy goals collectively reduced taxpayers’ liability by approximately $2.9 billion in 2010. c. Discovered that the age deduction and the Low Income Tax Credit are the most effective and efficient deductions. d. None of the above. 3. WHICH OF THE FOLLOWING IS NOT TRUE ABOUT CORPORATE CULTURE? a. A company’s culture can have a powerful effect on how employees, clients and competitors view the firm. b. It is possible for a firm or company to not have a corporate culture. c. Culture directly affects employees’ day-to-day work and overall career. d. It’s important to review the corporate culture during times of change. 4. TO DEVELOP ITS CULTURE, FIRM LEADERSHIP COULD: a. Determine which values are important to its mission. b. Build on an existing, organically grown culture. c. Ask the employees about their own views of the culture. d. All of the above. 5. CULTURAL INCONSISTENCIES BETWEEN OFFICES CAN: a. Reduce employee productivity and trust in the firm. b. Increase hiring. c. Do nothing; they are not an issue. d. Not be changed or addressed.
7. ACCORDING TO CHRIS HELMRATH, THE MOST IMPORTANT THING ENTREPRENEURS SHOULD HAVE WHEN ENTERING THE WORKFORCE IS: a. Connections b. Investors c. A positive attitude d. Education 8. THE AUDITOR’S REPORT SHOULD BE ADDRESSED TO: a. The U.S. Securities and Exchange Commission b. The U.S. Public Company Accounting Oversight Board c. The primary users of the report d. The client’s legal counsel 9. THE NEW AUDITOR’S REPORT EXPLAINS MANAGEMENT’S RESPONSIBILITIES: a. In a single sentence within the introductory paragraph. b. Within the scope paragraph. c. Within the opinion paragraph. d. In a separate paragraph identified by its own section heading. 10. IN THE UNITED STATES, THE AUDITOR’S REPORT SHOULD IDENTIFY THE: a. Name and state of the issuing office. b. Name of the engagement partner. c. Dollar amount of any uncorrected misstatements. d. Auditor’s preliminary judgment of materiality. 11. THE NEW AUDIT REPORT EXPLAINS THAT THE AUDIT PROCEDURES PERFORMED AND THE EVIDENCE GATHERED DEPEND ON: a. The auditor’s judgment and assessment of risks. b. The size of the audit fee. c. The date the report is due. d. Management’s willingness to cooperate with the auditor. 12. THE NEW AUDITOR’S REPORT EXPRESSES AN OPINION ABOUT WHETHER THE FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ______________ WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. a. Conformity b. Agreement c. Compliance d. Accordance
6. A STRONG CULTURE CAN RESULT IN: a. Boosted employee morale. b. Little relationship between staff behaviors and firm values. c. Poor performance. d. Client loss.
Congratulations to the following members! NEW HIRES >>
APPOINTMENTS & AWARDS >>
and will take on the DHG name.
GARY ARMBRISTER, CPA, has joined
MARTIN EINHORN, CPA, of Wall,
NextGen CFO in Greensboro, N.C., as an associate.
Einhorn & Chernitzer, PC, in Norfolk, was recognized as the 2011 Hampton Roads Corporate Volunteer Leadership honoree at the Hampton Roads Corporate Volunteer Excellence Awards.
Virginia firms HOMES, LOWRY, HORN & JOHNSON, LTD., KEARNEY & COMPANY and MATHEWS, CARTER & BOYCE were among 100 firms honored in the Accounting Today Best Accounting Firms to Work For 2011 awards.
LISA GERMANO, CPA, of Actuarial
WITT MARES FINANCIAL VISION
has joined Cole & Associates CPAs LLC in Roanoke.
LISA TILLEY, CPA,
has joined Corporate Capital Resources as senior management consultant.
Benefits & Design Co. in Midlothian, and WILLIAM SHENKIR, CPA, of the University of Virginia’s McIntire School of Commerce in Charlottesville, were among 51 CPAs honored with the American Institute of CPAs’ (AICPA) new Sustained Contribution Award. FIRM NEWS >>
GARY LEVINE, CPA, is now chief
financial officer at ZyGEM Corp., Ltd., in Charlottesville. PROMOTIONS >> National Bankshares, Inc., has promoted LORA JONES, CPA, to corporate analysis officer. STEVEN KENNEY, CPA, has been
promoted to assistant vice president at Berlin Ramos & Company. RyanSharkey, LLP, has promoted LAURA WHITEMAN, CPA, to director in the Assurance practice.
BOND BEEBE, a CPA and advisory firm
with an Alexandria office, participated in the Leukemia & Lymphoma Society’s Light the Night Walk on Oct. 22, 2011, in Rockville, Md. The firm’s team of 40 employees raised more than $2,700 to support cancer research. CLIFTON GUNDERSON and LARSONALLEN will merge as of Jan. 2 to
create CliftonLarsonAllen. Tysons Corner firm SWART, LALANDE & ASSOCIATES PC merged with DIXON HUGHES GOODMAN LLP (DHG), effective Nov. 1, 2011. Swart, Lalande will become part of Dixon Hughes Goodman
LLC of Williamsburg has been named
to the “$100+ Million Assets Under Management Club” by Accounting Today. VSCPA STAFF NEWS >> Vice President of Strategy & Development AMY PARKER celebrates her 18th anniversary with the VSCPA on Feb. 17. Two employees mark 12 years with the VSCPA this year: Graphic Designer JEN SYER on Jan. 10 and Vice President of Member & Public Relations TINA LAMBERT on Feb. 7. Communications Director JENNY HANSEN celebrates six years with the VSCPA on Jan. 9. Conference Planner VALERIE VAUGHN marks one year with the Society on Feb. 7.
The VSCPA mourns the loss of: JOSEPH GEIGER, CPA, a VSCPA life member from Richmond who served
as president of the Richmond VSCPA Chapter. A North Dakota native, he served in the U.S. Army and attended the University of Richmond before working for Dalton Pennell & Co. and Cherry, Bekaert & Holland. JANICE HUPPERT, CPA, of Blacksburg. She most recently worked as
controller at Simon and Associates and held her CPA license for more than 30 years after graduating from Virginia Tech. She was active in her church and spent 20 years as a fundraiser for the American Cancer Society. DEBORAH WIGG, CPA, of Suffolk. She was an officer in the VSCPA
Tidewater Chapter and was named a “Super CPA” by Virginia Business magazine. She most recently worked as controller at East Coast Fabrication & Repair and had previously worked at McPhillips, Roberts & Deans. See the article on page 38 for more about Wigg. n
CONGRATS TO THESE ELECTION WINNERS! >>
In November 2011, SEN. WALTER A. STOSCH, CPA, won his bid for re-election to the Virginia Senate in the 12th District and begins his 20th year in the Senate. JIM HOLLAND, CPA, was re-elected to his seat on the Chesterfield County Board of Supervisors. If you or another CPA you know was elected to a state or local position, let us know! Email VSCPA Government Affairs Director Emily Walker at firstname.lastname@example.org.
From left, Gary Romer, CPA, Thomas Puryear, CPA, Elsie Rose, CPA, Sen. Walter Stosch, CPA, VSCPA Government Affairs Director Emily Walker and Commander Paul Galanti, a Vietnam POW, at Stosch’s Invitational Golf Tournament on Oct. 3, 2011, at Hermitage Country Club in Richmond.
Now is the time to volunteer Eager to give back to the CPA community? Volunteer with the VSCPA to help the Society serve the needs of members like you! The VSCPA is currently seeking volunteers for the 2012–2013 membership year. Use your professional skills to help your community or venture into an area where you have little experience. Volunteer opportunities are available on general committees, task forces, leadership, conference planning, public service, legislative and more. Visit www.vscpa.com/Volunteer by the Friday, Feb. 3 deadline to sign up to volunteer. Thanks for donating your valuable time to help your fellow CPAs! n
2012 Tax Resources Your VSCPA membership includes access to valuable resources to get you ready for tax season. Visit www.vscpa.com to take advantage of these member benefits, including: • • • • • •
Tax Listserve Federal Tax Update Podcasts Tax Articles & Links Session Watch & Issue Alerts Disclosures Magazine, eDisclosures & Footnote E-Newsletters And more
To access these resources and learn more, visit www.vscpa.com.
VSCPA 100% Member Firms VSCPA 100% Member Firms show their commitment to their employees, the profession and the association. A 100% Member Firm is simply a Virginia CPA firm or company that has all of its CPAs enrolled as members in the VSCPA. Interested in being listed as a 100% Member Firm? Contact VSCPA Member Relations Director Brenda Fogg at email@example.com or (804) 612-9409. THANK YOU FOR YOUR COMMITMENT, 100% MEMBER FIRMS! Anderson & Reed, LLP Anderson, White & Company, PC, CPAs Barnes, Brock, Cornwell & Heilman PLC Beale & Curran, PC Beck & Company, CPAs, PC Bennett, Atkinson & Associates, PC Biegler & Associates, PC BlackHeath Company, PLC Bowling, Franklin, & Co., LLP Boyce, Spady & Moore PLC Britt & Peak, PC, CPAs Burgess & Co., PC, CPAs Cameron, Moberly & Hamrick, PC Charles S. Pearson, Jr., CPA Charles W. Snader, PC Cherie A. James, CPA, PLC Chesapeake Accounting Group PC Cole & Associates CPAs, LLC Coley, Eubank & Company, PC Corbin & Company, PC Craver, Green and Company, P.L.C. Creedle, Jones and Alga, PC CST Group, CPAs, PC Dalal & Company David L. Zimmer CPA PC Diane Y. Smith CPA PC Didawick & Company, PC Dominion Benefits Donald W. Coleman, CPA, Inc., PC Douglas L. Thompson, CPA PLLC Duvall Wheeler, LLP Eggleston & Eggleston, PC Elmore, Hupp & Company, PLC Everett O. Winn, CPA, PLC Forrest & Markos Frank Edward Sheffer & Company Fritz & Company, PC Garland & Garland, CPAs, PC Garris and Company, PC GL Roberson CPA, PLLC Gregg & Bailey, PC Gregory & Associates, PLLC Gurman & Company, PLLC
Hantzmon Wiebel Harris, Harvey, Neal & Co., LLP Henry R. Hortenstine III, CPA, PC Hogan & Reed, PC, CPAs Holland & Brown LLP Homes, Lowry, Horn & Johnson, Ltd. Honeycutt & McGuire CPAs Hunt & Calderone, PC, CPAs Jay E. Reiner CPA PLLC John M. Watkins, CPA Jones, Adams & Delp, PC Jones, Madden & Council, PLC Jones & McIntyre, PLLC Keiter, Stephens, Hurst, Gary & Shreaves, PC Kositzka, Wicks and Company Kuehl Shepherd Kozlowski & Associates, Inc. L.P. Martin & Company, PC Lane & Associates, PC Larry D. Greene CPA PC Lent & Hawthorne, PC M. Lee Winder & Associates, PC Martin, Beachy & Arehart, PLLC McPhillips Roberts & Deans PLC Michael B. Cooke, CPA, PC Michael R. Anliker, CPA, PC Miller Foley Group Mitchell, Wiggins & Company, LLP Moss & Riggs, PLLC Murray, Jonson, White & Associates, Ltd., PC PBGH R.T. McCalpin & Associates Renner & Company, CPAs, PC Roger L. Handy, PC Rubin, Koehmstedt & Nadler, PLC Russell, Evans & Thompson, PLLC Rutherford & Johnson, PC Salter & Associates, PC Scheulen, Patchett & Edwards, PC Sells, Hogg & Jones, CPAs, PC Spencer, Hager & Mosdell, PC Stephen Merritt CPA, PC Steve Guy & Associates, PC Steve Walls & Associates, PLLC Strickland & Jones, PC Sullivan, Andrews & Taylor PC
Terry L. Jones, CPA, LLC The Burdette Smith Group, PC Thomas E. Fraley, CPA Thompson, Greenspon & Co., PC Tongelidis Consulting, LLC Updegrove, Combs, McDaniel & Wilson, PLC Valderas & Fishel, PC Walker Consulting Group Wall, Einhorn & Chernitzer Wells, Coleman & Company, LLP Yancey, Miller, Helsley & Bowman, CPAs, PLLC Yount, Hyde & Barbour, PC
The above list was compiled Nov. 1, 2011. Check www.vscpa.com/100Percent for a complete, up-to-date list. n
WE WANT TO HEAR ABOUT IT! >>
Email firstname.lastname@example.org if you have exciting news to share. The VSCPA prints news of members’ awards, appointments and promotions as well as new hire and job change announcements. Firm news, as well as mergers and acquisitions, is also welcome.
GET IT ALL ONLINE >>
VSCPA CPE & NETWORKING Visit the CPE Catalog at www.vscpa.com for the latest VSCPA seminars, conferences, webcasts, networking event and more!
McPhillips, Roberts & Deans establishes memorial fund for Deborah Wigg, CPA On Nov. 8, 2011, VSCPA member Deborah (Debbie) Wigg, CPA, was murdered by her estranged husband, who then killed himself, according to police reports. An employee with McPhillips, Roberts & Deans in Norfolk for nearly 14 years, Wigg is now being remembered by her firm through a trust fund for her children.
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Her two children, ages 4 and 10, were in the home when the tragedy occurred and will face many challenges in the years to come. Debbie’s parents are currently trying to obtain legal custody of the children. McPhillips, Roberts & Deans has established the Deborah Marlo Brown Memorial Fund to provide for her children’s health, education and welfare. Debbie graduated from Old Dominion University in 1994 and joined McPhillips, Roberts & Deans in 1997. In addition to her CPA, she held the Certified Fraud Examiner designation as well as the Certified in Financial Forensics credential from the American Institute of CPAs. She was also an officer in the VSCPA Tidewater Chapter. McPhillips, Roberts & Deans is suffering from the loss of a valued and well-loved employee, says firm partner Marty Ridout, CPA. “I’ve known and worked closely with Debbie for over a dozen years. Though petite in stature, she was large in life. She was smart, kind, gentle, warm, patient, witty, and her smile drew you in and let you know that she was ready to help, whatever the situation. We all loved her and miss her terribly. She mentored many of our current staff and often taught the partners a thing or two. “Our clients loved her as well, some actually looking forward to an audit
DEBORAH MARLO BROWN MEMORIAL FUND >>
because she was such a pleasure and they knew they were going to learn something useful. She was a good listener, and truly cared about others. Clients and staff alike would open up to her with their problems, both professional and personal. They knew she would help.” According to Ridout, Debbie’s priorities were faith and family. “She adored her children, trying her best to provide a safe, nurturing environment for them to learn and grow.” Because the children “will be struggling emotionally for years, we want to at least help with the financial burdens that will follow,” Ridout says. n
If you are interested in contributing to the trust fund, send a check made payable to “Deborah Marlo Brown Memorial Fund” to: DEBORAH MARLO BROWN MEMORIAL FUND
c/o McPhillips, Roberts & Deans, PLC 150 Boush Street, Suite 1100 Norfolk, Virginia 23510 Alternatively, checks designated for the fund may be sent directly to Monarch Bank at the following address: DEBORAH MARLO BROWN MEMORIAL FUND
c/o Karyn Mercier Monarch Bank 101 West Main Street, Suite 1000 Norfolk, Virginia 23510
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Coming soon … a new way to connect! VSCPA Connect is a membersonly online community through which you can network, connect and share information with other members. • Customize your profile with your photo, job history, interests and more • Find and connect with colleagues through a members-only social network • Participate in group discussions based on your interests and needs • Pick your communication preferences • Download and share resources through a new searchable library • Harness the knowledge of a diverse network 10,000 members strong It’s your community. So connect!
Visit http://connect.vscpa.com for information on how you can get started! 40
TOP YOUNG CPA >>
Andy Powell, CPA, Selected for AICPA Leadership Academy VSCPA member Andy Powell, CPA, of the Virginia Auditor of Public Accounts (VAPA), was one of 33 young CPAs celected to participate in the American Institute of CPAs' (AICPA) annual Leadership Academy in Durham, N.C. Powell joined his fellow CPAs under the age of 36 for three days in October to learn a cutting-edge strategic thinking process and discuss a host of issues facing CPAs. Attendees participated in exercises to help them internalize the value of leadership personally and professionally and understand how they can positively affect their community, organization and the profession as a whole. Powell, who recently became audit director for higher education programs at VAPA, said that the training he received at the Leadership Academy was directly related to his new job. “I just took a new position in our office, took over a new team, and part of the tools they were training was the strategic planning process,” he said. “It was basically geared around making sure folks buy into organizational changes. A lot of what I got out of the leadership academy was directly useful in my current assignment. The timing was fantastic.” He said that the program, to which he had applied for the third time, also served as a motivator for his new job.
“The biggest thing that I took away from it was being re-energized and reenthused about what CPAs can do as a profession and the impact that we have on so many people,” Powell said. Before taking his new job, Powell served as director of acquisition and contract management at VAPA. He joined the organization in 2004 after graduating from Radford University, and since then, he’s obtained his Master’s in Business Administration from Virginia Commonwealth University and moved up the ladder in his office. The AICPA selected the 33 attendees from 100 candidates recommended by state CPA societies, employers or both. Candidates submitted résumés which included work history, licensure information, professional volunteer activities, community service, awards and honors. They also supplied an accounting-related essay and a statement explaining why participating in the Leadership Academy would be important to them. The submissions were reviewed and evaluated by the AICPA. Attendees got insight from some of the profession’s most experienced leaders, including AICPA Chairman Paul Stahlin and AICPA President and CEO Barry Melancon.
Andy Powell, CPA, is flanked by AICPA Chairman Paul Stahlin (left) and AICPA President and CEO Barry Melancon (right).
be met,” Stahlin said. “The Leadership Academy is a unique opportunity for these talented professionals to refine the skills they’ll need to guide the profession in the coming decades.” Click on the QR code with your smartphone to watch a video in which Powell explains the role of the CPA in the standard-setting process for government accounting. n
“The next generation of CPAs has the responsibility to lead the profession into the future and ensure the obligation to serve the public interest continues to
VSCPA educational foundation TO INSPIRE AND SUPPORT >>
Involved in every way: Foundation updates Dawn Barnard, CPA its mission Donors take different paths to the VSCPA Educational Foundation. Dawn Barnard, CPA, went through her employer to get involved. Barnard is a manager at Baker Tilly Virchow Krause, LLP, in Vienna. If that name sounds familiar to you, you might have passed through one of the firm’s most enduring contributions to the VSCPA and Virginia accounting students — the Leaders’ Institute. The Leaders’ Institute is a summer weekend program held at a Virginia college or university that puts Virginia’s top college accounting students (nominated by their professors) in contact with potential employers. In addition to the recognition that comes with being the program’s sponsor, Baker Tilly reaps the same benefits as other firms that attend and has even hired students based on their performance in the program. “The Leaders’ Institute enhances our recruiting strategy by demonstrating our commitment as a firm to develop future leaders both in our firm and in Virginia,” Barnard said. “Our people have participated as team leads, speakers and mock interviewers. This provides them with opportunities to build their presentation, coaching and interviewing skills.” Barnard has held several leadership positions with the VSCPA, culminating with her term as vice chair of the Board of Directors in 2009–2010. She’s also been heavily involved with the CPA PAC Board of Trustees and chaired the VSCPA’s Young Professionals Advisory Council (YPAC) in 2005–2006. Barnard graduated from South Carolina’s Converse College in 1994 and has been at Baker Tilly since 2003. During that time, she’s become quite familiar with the students and accountants who make up the future of the CPA profession, whether from her work at Baker Tilly, her time at the Leaders’ Institute or her work with the YPAC. She’s made it a point to share her career experiences with the students she meets. n
The VSCPA Educational Foundation has a new mission, but its end goal of ensuring the health of the CPA profession remains the same. The Foundation’s Board of Directors decided to update its mission at its October meeting, and the change is small but significant. The Foundation now aims to inspire and support future CPAs, while the previous mission called upon the organization to attract future CPAs. The new wording is indicative of the Foundation’s effort to maintain a connection with Virginia accounting students throughout their careers, both academic and professional. That connection will help the Foundation foster students’ lifelong love for accounting and their sense of investment in the future of the profession. While the change might seem small at first glance, it’s a reflection of the Foundation’s goal of engaging with CPAs in high school, through college and beyond. n
SCHOLARSHIP APPLICATIONS DUE APRIL 1 >>
Each year, the VSCPA Educational Foundation awards scholarships to deserving accounting students at colleges and universities across Virginia. Scholarships for the 2012–2013 academic year range from $1,000 to $3,000. The application process has changed from past years — applications will now only be accepted online. Visit www.vscpa.com/Scholarships to create your account and apply by April 1, 2012. For more information on VSCPA Educational Foundation scholarships, visit www.VSCPAFoundation.com, email info@VSCPAFoundation.com or call (800) 733-8272.
CLASSIFIED ads GROWTH, SALES & ACQUISITIONS ACCOUNTING PRACTICE SALES Selling? Contact Brannon Poe with Poe Group Advisors, an affiliate of Accounting Practice Sales-North America’s Leader in Practice Sales. To learn more, please visit www. PoeGroupAdvisors.com or contact us at info@PoeGroupAdvisors.com or by calling (888) 246-0974. Our clients: 1. Maximize the value of their practice. 2. Experience The Seamless Transition™, our unique process. 3. Help their buyer succeed. The cumulative effect of years of marketing exclusively to the accounting profession, combined with our time-tested system of identifying suitable candidates, topped-off with experience-driven transition planning — achieves your intended results. Current Virginia Practices Available: Richmond, VA — $569,000 Established Tax Practice — Approximately 90% of the revenue is generated from Form 1040 individual tax preparation. Two locations to
serve clients who are mostly professional, selfemployed, or retired. Loyal clients! There is very good cash flow to owner and also strong growth potential for this firm. Southwest VA — $385,000 This great CPA practice is located in southwest Virginia and southwest of Bluefield West Virginia. This practice has exceptional fees. Cash flow to owner is good. The practice serves loyal tax clients and focuses on small businesses. Winchester, VA — $95,000 Great home based CPA practice. This quality block of accounts would be a great start or addition for a CPA. Clients are very loyal and accustomed to high quality service. Cash flow to owner is exceptional and fees are very good. This is the place to see some of our country’s most amazing history.
on tax, payroll and bookkeeping. There are no reviews or audits. Firm caters to individuals with small businesses. Employees are very skilled and well liked by clients. They will help make a smooth transition. CPA Firm in Old Town Alexandria seeks growth through acquisition, merger or assisting someone in retirement or semiretirement. Reply in confidence to VSCPA CC # 83, 4309 Cox Road, Glen Allen, VA 23060 or email@example.com.
Southwest VA — $140,000 Blue Ridge Mountains CPA firm that serves clients in all kinds of industries. Clients are accustomed to exceptional service. Firm focuses
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Email firstname.lastname@example.org Your connection to success
Support the future of the CPA profession The VSCPA Educational Foundation supports students and educators in Virginia through scholarships and grants. Your generosity makes it possible for promising, ambitious students — future CPAs — to pursue promising accounting careers. “The financial support of the VSCPA Educational Foundation is helping to make [majoring in accounting and graduating] a reality.” — Erica Ellermeyer 2011 Thomas M. Berry Jr. scholarship recipient
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Donate online at www.VSCPAFoundation.com or call (800) 733-8272.
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LOS BANK AUDITORS >>
The only thing better than crunching the numbers is rapping about it. The Yount, Hyde & Barbour rappers are, from left, Timothy LeHew, CPA, supervisory senior; Greg Mercer, CPA, supervisory senior; Bryan Newlin, CPA, manager; and Aaron Poffinberger, CPA, manager.
THE RAPPING ACCOUNTANTS >>
Two minutes with Los Bank Auditors In the summer of 2009, at the behest of their bosses at the Winchester office of Yount, Hyde & Barbour, PC, Timothy LeHew, CPA, Greg Mercer, CPA, Bryan Newlin, CPA, and Aaron Poffinberger, CPA, became the Los Bank Auditors. Tasked with making a short video for YHB’s Firm Day, the four elected to riff on The Lonely Island hit, “I’m on a Boat,” which had just debuted as a “Saturday Night Live” digital short. The result was the tongue-in-cheek “I’m on an Audit” — complete with backing vocals from Newlin’s wife, Karen — which has garnered more than 29,000 YouTube views since its posting. “We wanted to have fun with it and at the same time somewhat meet the objectives,”
Poffinberger said. Once the video hit YouTube, the four Los Bank Auditors got a great positive response from clients and friends. Poffinberger was even recognized in an out-of-town restaurant for his role in the production. “I’m on an Audit” follows the Los Bank Auditors through their work, with several lines and shots taken from real life, including a shot of a coworker working in a broom closet. “Making the video was a lot of fun,” Newlin said. “Recording the track put us all outside of our comfort zone, but was a blast.” After Firm Day was over, the Los Bank
Auditors went back to business as usual, crunching numbers and serving their clients. But at the end of the day, they’re still the rapping accountants, with some impressive YouTube numbers to back it up. “Ego aside, I would have to say I am the best rapper of the four of us,” Poffinberger said, “and maybe a top-five rapping accountant in the state of Virginia.” Check out the rapping accountants on YouTube at http://youtu.be/ NnFk4jnV5Es, or scan the QR code with your smartphone. n
an affiliate of accounting practice sales north america’s leader in practice sales
need a hand? our experience and nationwide connections make all the difference in the world when it’s time to buy or sell your practice. featured va opportunities: southwest virginia – $385,000 richmond virginia – $569,000 winchester – $95,000 southwest virginia – $140,000
Please visit our team’s website to learn more about The Seamless Succession™ at
now available – Accountant’s flight plan Using real-world scenarios, practice owner testimonials, and written exercises, CPA and author Brannon Poe offers keen insights for developing customized, straightforward approaches to hone your focus, eliminate frustration, grow your bottom line, and achieve meaningful work-life balance while increasing profitability. www.poegroupadvisors.com/our-book/ for more information
BRANNON POE, CPA | 1.888.246.0974 | BPOE@POEgROuPAdvisORs.COm Poe Group Advisors is an independent affiliate of
Virginia Society of CPAs Virginia Society of 4309 Cox Road Glen Allen, VA 23060 Certified Public
Accountants Address service requested
This issue of Disclosures features a special section about creating and cultivating the culture of your firm. It also includes an analysis o...
Published on Jan 3, 2012
This issue of Disclosures features a special section about creating and cultivating the culture of your firm. It also includes an analysis o...