NJCPA May/June 2011

Co Sp nv eci Iss en al ue tio n

Magazine of the

New Jersey Society of Certified Public Accountants

Technology Options for Search Engines and Browsers An Overview of Office 2010 Leveraging the Power of Social Media The Art and Science of Presenting Financial Data

M a y • J u n e 2 0 1 1

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May • June 2011

Ralph Albert Thomas Executive Director rthomas@njscpa.org

Ellen C. McSherry Associate Executive Director emcsherry@njscpa.org

Don Meyer

features

8 Options for Search Engines and Browsers

Google’s not the only game in town. Get ideas for other capable search engines, as well as a couple browsers worth checking out.

Director, Communications & Marketing dmeyer@njscpa.org

David Plaskow Managing Editor dplaskow@njscpa.org

Jeanette L. Miller Editorial Assistant jmiller@njscpa.org

Editorial Advisory Board Neil B. Becourtney, CPA David M. Capodanno, CPA Rosemary F. Ervin, CPA Rebecca B. Fitzhugh, CPA Christopher W. Frey, CPA Catherine Z. Horn, CPA Bernard M. Kiely, CPA Marcella LoCastro, CPA William C. McNamara, CPA Marc D. Mintz, CPA John F. Raspante, CPA Joseph F. Scutellaro, CPA Margaret Van Brunt, CPA

12 An Overview of Office 2010 Discover how Office’s latest generation of software takes it up a notch or two to help you work faster, smarter and better.

16 Leveraging the Power of Social Media

Not tweeting, posting or linking?

What are you waiting for?

It may mean all the difference in the world for your business.

The Warren Group Design / Production / Advertising thewarrengroup.com custompubs@thewarrengroup.com

18 The Art and Science of Presenting Financial Data

Learn how to present data that meets both your and your audience’s needs, without going overboard.

4

Close Up

6 News Briefs Revenue Recognition for Technology/ Bundled Services

4 6 Student Outlook NJSCPA Celebrates 51st Awards Ceremony

2 2

Best Practices Choosing the Right Time and Billing Software for Your Practice

4 8 Legislative Views Governor’s Budget Proposal Takes a Twist

2 4

26

28

A&A Buzz

3 1 Tech Center Your IT Department as a Profit Center

2 0

Financial Planning Educating Partners (and Yourself) on Financial Planning Products Forensic File Forensic Accounting Goes High Tech

Industry Insights SOX Evaluation Software

2 9 Small/Sole Practitioner Hiring an IT Consultant Versus In-House Staff The New Jersey Society of Certified Public Accountants 425 Eagle Rock Avenue Suite 100 Roseland, NJ 07068-1723 973-226-4494 Fax: 973-226-7425 www.njscpa.org

30 Tax Talk

Anywhere, Anytime Access A Few Ways to to the NJSCPA? There’s an Improve E-Filing App for That

5 0 Member Profile This CPA Is for the Birds Society Pages 2011/12 Executive Committee, 32 2011-14 Board of Trustees, 34 CPE Offerings and Events, 36 Get Involved, 38 Member Benefits, 42 State Board Report, 44 Classifieds, 45

New Jersey CPA (ISSN 1534-6692) is published six times per year by the New Jersey Society of Certified Public Accountants, 425 Eagle Rock Avenue-Suite 100, Roseland, NJ 07068. Issue No. 27 Copyright © 2011 New Jersey Society of Certified Public Accountants. Annual membership dues includes $9 for a one-year subscription to New Jersey CPA magazine. Members may not deduct subscription price from dues.

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

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

CLOSE

up

Anywhere, Anytime Access to the NJSCPA? There’s an App for That M 2010/11 Board of Trustees EXECUTIVE COMMITTEE President Robert S. Marrone, CPA President-Elect Carole A. Hedinger, CPA Secretary Lloyd F. George, CPA Treasurer Frank R. Boutillette, CPA Immediate Past President Robert J. Traphagen, CPA Executive Director Ralph Albert Thomas TRUSTEES Lewis D. Bivona, CPA Jose E. Bombino, CPA Susan Burke, CPA Rebecca B. Fitzhugh, CPA Robert A. Fodera, CPA Linda Gibson, CPA Ronald E. Gray, CPA Maryann Holloway, CPA James A. Lawrence, CPA Charles A. Lota, CPA Jay Mehta, CPA Marc D. Mintz, CPA Stanley J. Morin, CPA Robert A. Nanfro, CPA Kenneth Pogrob, CPA Christine Pronek, CPA Coleman F. Szely, CPA Patricia Vroman-Stuart, CPA

obile applications have gotten a lot of attention recently. The market is growing every day. Cellular-News recently reported that this quarter’s worldwide smartphone sales increased 96 percent compared to a similar period last year, and they now account for nearly 20 percent of worldwide phone sales. Apps are a great way to reach out to keep in touch with customers or, in our case, members.

In March, the New Jersey Society of CPAs introduced NJSCPA Mobile, the Society’s new mobile app. Through NJSCPA Mobile, you can search, find and connect with other members; receive the latest professional news; and view Society events all from your smartphone or mobile device.

NJSCPA Mobile is pre-populated with all of our Society information to save you set-up time, and it works on popular mobile devices including the iPhone, iPad, iPod Touch, BlackBerry and Google Android. Its features include: Contacts – Save NJSCPA member contacts directly to your mobile address book. Their information will automatically be updated when they update their member profiles.

Directory – Get quick access to your fellow NJSCPA members. Search the directory by first or last name. Click members’ phone numbers to dial them; click their email addresses to email them; or click their addresses to see their locations on a map.

Discussions – Collaborate with other members and get answers to your questions.

All of the eGroups that you are subscribed to on NJSCPA Connect are available via NJSCPA Mobile. After you initially log in to NJSCPA Mobile, you can post new messages, reply to another member’s messages or simply follow the discussions.

Events – View upcoming NJSCPA events,

including seminars, conferences, webinars, chapter events, committee meetings and networking programs.

Messages – View any direct messages you’ve received from your fellow members via NJSCPA Connect.

News – Read the latest professional and Society headlines, view the most recent postings in the NJSCPA Job Bank and access the NJSCPA Twitter feed.

Visit njscpa.org/mobile for instructions on how to download and install NJSCPA Mobile on your smartphone or mobile device. Once you install the app, select “NJSCPA Mobile” from the list of organizations. You will then be prompted to log in using your regular NJSCPA username and password. (Your username is your email address and your password is your member ID, unless you’ve changed it.) You will remain logged into the app unless you specifically log out, providing fast and easy access to all of the features outlined above.

If you have any questions about NJSCPA Mobile, contact NJSCPA Online Communications Manager Rachael Bell at rbell@njscpa.org or 973-226-4494 x220.

See live demos of NJSCPA Mobile and NJSCPA Connect on the tradeshow floors at the NJ Accounting, Business & Technology Show, May 18 and 19, in Secaucus and the NJSCPA Convention & Expo, June 8-10, in Atlantic City. Visit njscpa.org/convention for details.

NEW JERSEY CPA • May • June 2011

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SEC Approves New Rules Regulating Asset-Backed Securities

The SEC voted to adopt two sets of new rules designed to help revitalize the important asset-backed securities market by encouraging better disclosure for investors.

The SEC approved one set of rules that requires issuers of asset-backed securities to disclose the history of the requests they received and repurchases they made related to their outstanding asset-backed securities. The SEC also approved a second set of rules that would require issuers of asset-backed securities to conduct a review of the assets underlying those securities. Visit sec.gov.

Former New Jersey Society of CPAs President Robert J. Traphagen, CPA, (right) meets with state Senator Richard Codey at the governor’s February budget address in Trenton.

Free Technology Guide U.S. GAAP Financial for Small Businesses Reporting Taxonomy A new technology tool for small Available businesses, Business Technology Simplified, is available to help them connect the dots between entrepreneurship and technology to give them a competitive edge. The U.S. Small Business Administration (SBA) and Microsoft have teamed up to develop this free guide, which includes fundamentals on the importance of technology and how it can be used to achieve a business’s goals, as well as tips on simplifying work tasks, do-it-yourself marketing, cloud computing, time management, and finding and cultivating customers. Learn more at sba.gov.

The Financial Accounting Foundation has made available the 2011 U.S. GAAP Financial Reporting Taxonomy, which contains updates for accounting standards and other improvements to the 2009 taxonomy currently used

by Securities and Exchange Commission (SEC) issuers.

The U.S. GAAP Financial Reporting Taxonomy is a list of computer-readable tags in XBRL that allows companies to tag precisely the thousands of pieces of financial data that are included in typical long-form financial statements and related footnote disclosures. The tags allow computers to automatically

SBA Offers Small Business Disaster Preparedness Webinars

Small business owners can get tips on business continuity planning through a series of free webinars hosted by the SBA and Agility Recovery Solutions. Topics include Crisis Communications Planning, Disaster Recovery Best Practices, Social Media and

New Jersey by the Numbers 544,000,000 3,500,000 213,418 26,000 11

Annual financial aid dollars contributed by NJ colleges Annual tax dollars subsidizing cable for low-income elderly and disabled Women-owned businesses in the state NJ students attending charter schools New Jersey’s national rank for solar jobs

NEW JERSEY CPA • May • June 2011

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Disaster Recovery, The Impact of Preparedness on the Bottom Line, Management Obligations During Disaster Recovery and several others. Visit sba.gov.

NJSCPA Exam Cram Blog Making a Name for Itself

The New Jersey Society of CPAs Exam Cram Blog made the list of “Top 50 Blogs by Accounting Professors, Students and Professionals.” Society members and staffers regularly blog about the process of taking the CPA Exam and provide helpful exam-taking tips. Read Exam Cram at njscpa.org/examcram.

The Big Four and Economic Recovery

A new article details the 2010 performance analysis of the Big Four firms, while offering a glimpse of economic recovery for small and mid-sized firms.

The article shows how the big professional services players mirror the market experiences of mid-sized and small firms as the economy works to emerge from its worst recession in decades.

To read the complete article and the associated study, email info@ sascommunications360.com.

SBA Contracting Program for Women-Owned Small Businesses

The new Women-Owned Small Business (WOSB) Federal Contract Program will provide greater access to federal contracting opportunities for WOSBs and economically disadvantaged women-owned small businesses (EDWOSBs).

The program allows contracting officers to set aside specific contracts for certified WOSBs and EDWOSBs and will help

federal agencies achieve the existing statutory goal of five percent of federal contracting dollars being awarded to WOSBs. Learn more at sba.gov/wosb.

Second Voluntary Disclosure Initiative Opens

The Internal Revenue Service announced a second special voluntary disclosure initiative designed to bring offshore money back into the U.S. tax system and help people with undisclosed income from hidden offshore accounts get current with their taxes. The new voluntary disclosure initiative will be available through August 31, 2011.

There is a new penalty framework that requires individuals to pay a penalty of 25 percent of the amount in the foreign bank accounts in the year with the highest aggregate account balance covering the 2003 to 2010 time period. Some taxpayers will be eligible for 5 or 12.5 percent

Intuit Reports on the Accounting Profession

penalties. Participants also must pay back-taxes and interest for up to eight years as well as pay accuracy-related and/ or delinquency penalties. Learn more at irs.gov.

Intuit 2020 Report, The Future of the Accounting Profession, provides a view of the significant demographic, economic, social and technology trends that will affect the accounting and tax profession over the next decade including: • The accounting profession’s rapidly shifting business environment.

• The changing face of accounting professionals and their clients.

• From data to decision making, how technology will change the accounting profession.

• High-touch through high-tech, client outreach, relationships and service.

To access this free report, visit intuit.com/2020.

State Credit Rating Downgraded

Standard & Poor’s has downgraded New Jersey’s state credit rating from AA to AA-. The massive underfunding of the state’s pension obligations is a key culprit in the rating drop.

Governor Sends Residency Bill Back to Legislature

New Jersey Governor Chris Christie vetoed a bill that would require newly hired government workers to live in the state within a year of their start date. Current government employees and some higher education positions are exempt. The governor wants additional time to structure a board that would review hardship appeals.

CPA Marketing Toolkit Updated with New Resources Developed as a joint project of the American Institute of CPAs and the New Jersey Society

of CPAs, the CPA Marketing Toolkit is designed to help CPAs promote their practices and services through marketing and communications resources and information. Use these tools to attract new clients and improve existing client relations, offer a public service to those in need of financial assistance or information, educate the business community and general public about CPA services and increase visibility by giving the presentations to business, consumer and community groups. The toolkit includes: • Social media toolkit • Speeches and PowerPoint presentations • Health care reform resources • Print advertisements • CPA posters • Client brochures • Sample press releases So, increase your marketing presence today. Visit njscpa.org/ members/resources/toolkit.cfm.

njscpa.org Spotlight Visit the New njscpa.org

The New Jersey Society of CPAs is about to revamp its website to provide easier access to information, news and resources.

What Will Change?

• A restructured main navigation will make it easier to find what you’re looking for: – News & Resources – Education & Programs – Chapters – Volunteer & Contribute – Career Development – About NJSCPA – Or, you can choose to browse by audience type: Members, Students & Educators, Firm Administrators or Media.

• A content-rich homepage will put

information at your fingertips: – Tabbed content box rotates to highlight various programs and resources.

– Featured news and upcoming events are prominently displayed.

• A comprehensive search tool will include all website content, including articles, resources, events, documents and more.

What Will Stay the Same?

• Your username and password. (Your username is your email address and your password is your member ID,

NEW JERSEY CPA • May • June 2011

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unless you’ve changed it on a previous visit.)

• All of the self-service features you’ve come to rely on: CPE Catalog, Profile, Membership Renewal, CPE Tracker, Membership Directory and more.

• Our commitment to make the site as valuable a member resource as possible.

We welcome your feedback! Contact Rachael Bell at rbell@njscpa.org or 973-226-4494 x220.

Options for Search Engines and Browsers Just think about it: Without search engines, navigating the Internet to find information on people, places and businesses would simply be overwhelming.

Google

By Marc D. Mintz, CPA Marc Mintz & Associates, LLC

Google is the current king of search engines, so much so that the word itself has become a verb that means to search and find out everything about a topic of interest. Depending on how broad your search request is, a Google search can bring up millions of potential (to use the word loosely) matches. To further narrow a search, Google offers advanced search feature where you can specify words, phrases, exclusions, file types and other criteria. Searches may be qualified by the category of interest, such as Web Content, Images, Videos, Maps, News and Shopping. Beyond these broad-level filters, additional categories can be found in drop-down windows. Options let you a search by references such as finance, books, blogs, scholarly works, groups, product research and dozens more. Using these qualifiers properly will reduce your search results from millions to a much more manageable number. Remember, it is quality, not quantity.

Not surprisingly, there is a vibrant commercial aspect to Google, as Internet advertising has become the driving component of many business models.

Just look at the Sponsored Links on the bottom of the page. That has led to the proliferation of competitive search engines.

NEW JERSEY CPA • May • June 2011

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Other Search Engines In addition to Google, there is bing.com and yahoo.com, which users can select as their homepage. There is also aardvark. com, ask.com, dogpile.com, ideafinder. com, infoplease.com, oneriot.com and wolframalpha.com. A couple of wellknown search engines used primarily for social networking and blogging include twitter.com and digg.com.

Compare and Contrast Performing the same search on a variety of sites is a good way to experience the differences between various search engines. Leaving aside the social networking sites, search the phrase “2011 Automobile Depreciation Expense.”

Google – This search returned 1.62 million results. As with most searches, the more relevant responses are found toward the top. The first link on page one was to “Depreciation and Section 179 Expense” at irs.gov, and the last link on that page was “What Is the Accounting Journal Entry for Depreciation” at blog. accounting.com.

Ask.com – This returned the same initial result and a first-page ending result of “Small Business Taxes and Management” at smbiz.com. Ask.comrelated searches are listed on the right of the screen.

Bing.com – A search of the same phrase returned 789,000 results, including the same top result as Google and a first-page ending result of “New Depreciation Limits” at accountancy. wordpress.com. With Bing, suggestions for related searches are shown at left and at the bottom of the screen.

Infoplease.com – This did not return a direct response and attempted to relate the question to an entry that would be found in an encyclopedia, almanac, dictionary, thesaurus or similar resource.

As such, the closest match infoplease.com suggested was a link to a search for 2011 automobiles.

Wolframalpha.com – This interprets data and attempts to give basic fundamentals and statistical information about the subject and also interpreted the subject to be 2011 automobiles.

Dogpile.com – This moved in the direction of 2011 automobiles, although it did list our Google top response at irs.gov as its fourth entry. Dogpile.com is actually a metasearch engine that sends your search request to several other search engines for compilation.

Aardvark.com – A more personal model, aardvark.com maintains that, upon registration, you will get a personal response from an appropriate expert in approximately five minutes via email, iPhone or Twitter.

Ideafinder.com, infoplease.com and oneriot.com are best known for searches

relative to sports and recent news topics.

Search Engine Tips Mastering the art of the Internet search requires practice, perseverance, inquisitiveness and a little luck. One useful technique is to limit your browsing to the first one or two pages of responses. Review what displays at the top and then try an identical search with another search engine. If your results seem off base, revise your search or try an advanced search. As you’ve undoubtedly seen, nearly every search engine has its complement of advertisements, advertising links, preferred vendors, redundant responses and links to other search engines. When using a search engine, one size definitely does not fit all. The search engine you choose will be directly related to your style and personality, as well as the type and nature of the information you are trying to obtain.

Browsers This topic would be incomplete without a brief discussion of Internet browser NEW JERSEY CPA • May • June 2011

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options. Again, several applications clearly dominate. In the PC world, the most prevalent browser application is Microsoft’s Internet Explorer. For the Mac-Apple operating system, the chosen browser is Safari. Modern-day interoperability allows these programs to run on dissimilar operating systems.

Although Internet Explorer and Safari dominate, redundancy is always advisable in the world of computing. Other free Internet browser applications represent fast, alternative Internet access. The best known are Firefox by Mozilla Software and Opera Web Browser from Opera Software.

Some of Firefox’s advantages include performance, particularly with older computers, better spyware and malware blocking, and built-in pop-up blockers.

Some disadvantages include web pages with Activex controls that will only run with Internet Explorer and issues restarting interrupted downloads. Opera claims more bells and whistles and greater customization capabilities, particularly with Windows 7. Nevertheless, most computer professionals recommend having at least one alternate browser installed on your computer to at least assist with diagnosing connectivity issues.

So, take a step out of your comfort zone and try a search with a new engine, or view the Internet with a new browser.

You might just like it.

Marc D. Mintz, CPA, CITP, is the managing member of Marc Mintz & Associates, LLC, a technology consulting firm that assists businesses with strategic planning and the selection and implementation of information technology systems. Mintz is currently a New Jersey Society of CPAs Trustee and a member of the NJSCPA Strategic Planning Committee, Technology Interest Group and Editorial Advisory Board of New Jersey CPA magazine. Contact Mintz at marc@ marcmintz.com or 973-808-9040.

Member Benefit Join a committee or interest group and search for other members who share your professional interests at njscpa.org/committees.

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An Overview of Office 2010 Businesses of all sizes have been migrating to Microsoft Office 2010, the newest release of the Office suite. Office 2010 is a significant upgrade that builds upon Office 2007 to enhance personal productivity and collaboration.

The Ribbon

By Neil A. Rosenberg Quality Technology Solutions

The ribbon toolbar, first introduced in Office 2007, has been extended to Visio, Project and SharePoint, as well as expanded in Outlook. As such, this common interface is now shared across all Office programs. The ribbon is what first caused many companies to skip Office 2007; it completely changes the way you interact with Office, moving all the commands and functions and forcing users to re-learn the programs. That’s why Microsoft introduced it several years ago: to re-arrange the old cluttered menu system and toolbars into a more natural, intuitive layout so users could be more productive. The ribbon, with its tab folder layout and context-sensitive help, is fresh and more intuitive.

Live Preview and Galleries Office 2010 also offers other user interface improvements, like Live Preview and Galleries, to help you create better, more professional-looking business documents faster and with less effort. Galleries offer a wide range of pre-built formats and templates, while Live Preview lets you hover your mouse pointer over a style and see on the screen what that selection will do to the document’s appearance.

Backstage Another major change is the Backstage view, a central place where you can manage files and their properties. Office NEW JERSEY CPA • May • June 2011

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2010 has a new File tab, and by clicking File-Info you can easily see information about the file, take various actions around sharing the document, setting permissions to secure the document or managing versions. With File-Print, you can more easily see print options and formatting functions and see a crisp, clear print preview of the document.

Microsoft now also offers foreign language translation within each Office application.

Images Another major enhancement is how you can edit videos and photographs, without additional editing tools, to create rich multimedia-enabled documents and presentations. You can trim video clips, compress file sizes and control video presentations.

Enhanced Elements These enhancements, combined with the ongoing refinement Microsoft makes to the integration between the separate Office components and their server products (Exchange, SharePoint), all drive higher productivity. Office has also enhanced each element: • In Microsoft Word, when a document is stored in a SharePoint back-end, the biggest enhancement is allowing multiple people to concurrently edit the same document. This builds upon Word 2007 tools to help you create professional-looking business documents faster and with less effort.

Word’s spell checker even helps you find the right word in the wrong context, such as using “there” when you mean “their.”

• Excel 2010 offers improved conditional formatting, including Sparklines and Slicers, to help you

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opt out of an irrelevant discussion thread with one mouse click, saving your mailbox countless messages.

SharePoint

visualize data more effectively and build Excel-based dashboards and data views. Sparklines are mini-graphs that help you see how numbers in a row are trending, while Slicers let you extend PivotTables to drill down into data and filter it even more granularly.

Excel 2010 also adds self-service Business Intelligence when accessing data in a SQL Server 2008 R2 database so a user can more effectively analyze data without “preparing” it.

Excel and SQL Server do the work for you.

• PowerPoint 2010 helps you build more professional presentations with transitions and special effects, while embedding video and audio. You can broadcast slide shows to remote users using SharePoint Server 2010 or the

Windows Live service. You can also record presentations and save them as video files.

• Microsoft OneNote 2010 offers a digital notebook tool that can be used for a wide range of purposes. You can store data in files or within SharePoint and synchronize across teams to foster enhanced collaboration and information sharing.

• Microsoft Outlook 2010 includes MailTips, which are system prompts, to advise you before you send an email to too many or the wrong people; Custom Actions so you can move a message to a folder, flag it for followup and categorize it in one click; and Conversation View so you can see all of the messages in one discussion thread as a whole. Best of all, you can

See The Good.

At the Community Foundation of New Jersey, we’re focused on helping our donors use their donor advised funds to create real impact in their communities and “see the good” their charitable giving creates.

Here are two recent examples of innovative ways our donors are using their funds to make a difference: • Donor

advised fund buys back firearms in Elizabeth, NJ. With the help of CFNJ, a donor and his family made a grant to help the police exchange weapons for cash. Over 400 guns were safely removed from the streets, melted down and disposed of. Thanks to their generosity lives will be saved in Elizabeth.

• Legal

aid for impoverished clients. A donor advised fund made a grant to offer free emergency legal services in Essex County to help families facing eviction. Through a modest grant, 43 impoverished families were able to remain in their homes.

If your clients are looking to make a difference through charitable giving, we’d like to be of assistance. Please contact Hans Dekker at: hdekker@cfnj.org | 973-267-5533

2011 Year-To-Date (February): Grants Issued - $3.8MM | Gifts to Donor Advised Funds - $12.9MM Follow us:

facebook.com/GivingNJ

twitter.com/GivingNJ

cfnj.tumblr.com

© 2011 Community Foundation of New Jersey

NEW JERSEY CPA • May • June 2011

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The magic glue behind many of these pieces is SharePoint, Microsoft’s collaboration server technology.

SharePoint is a server, or a cloud-based service, available from Microsoft and other companies for a monthly fee that allows you to share documents and data and collaborate both within and outside your company. It can be used as an Intranet – a central repository for shared documents, forms and data sources – and as a portal. Enterprise functions can include electronic forms, workflow automation, dashboards and business intelligence, all from one platform. With SharePoint Workspace, formerly Groove, data can be taken offline and remotely synchronized.

Moving to the Cloud Microsoft is now also offering, both through SharePoint and through its Live Cloud service, Office WebApps, a webbased Office client that allows you to view and do basic editing of documents from within your web browser. While not a substitute for the full Office product, it is a good start and a useful tool for situations where you don’t have access to the Office software. In the new release of its Cloud services, called Office 365, Microsoft will offer a cloudbased package of the latest versions of Exchange (email), SharePoint (Intranet/ portal) and Lync (instant messaging, web conferencing and video conferencing) together in one package, with the option to add a monthly subscription license for Office WebApps or the full Office 2010 client software. This would be like renting the software without owning it.

This is where the industry is headed, and Microsoft has ultimately embraced this change.

Neil A. Rosenberg is president and CEO of Quality Technology Solutions (QTS), a Microsoft Gold Partner that helps businesses implement and support new technologies and worry-free network solutions. Learn about QTS seminars and more at www.qtsnet.com. Rosenberg can be reached at nrosenberg@qtsnet.com.

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Leveraging the Power of

Social Media Has your firm embraced social networking? Social networking is no longer viewed as just a way for the next generation to constantly keep up with the activities of their friends. Today, many CPA firms utilize social networking for everything from recruiting staff to marketing to new client generation.

By James C. Bourke, CPA WithumSmith+Brown

If you have been on the fence about establishing a social networking presence, consider reading Socialnomics

by Erik Qualman. There is an accompanying video clip on YouTube (http://bit.ly/RTzPe) that has received significant attention. When I first viewed the video, it opened my eyes to the impact that social media has had on society. If you currently don’t have a social media presence, after viewing this video, you soon will.

companies conducted by Daryl Willcox Publishing found that 54 percent used social media and 35 percent said they posted updates every day to platforms such as LinkedIn, Facebook and Twitter. A quarter of companies updated every few days, while 17 percent used social media platforms weekly.

Almost three quarters of the companies experimenting with social media claimed they used LinkedIn the most, compared to Facebook (64 percent) and Twitter (63 percent). Of those who did not reach customers via social media, 35 percent blamed a lack of time, 31 percent said their customers didn’t use it, while 24 percent didn’t understand it.

The Numbers Don’t Lie Positive word of mouth has enormous value. A Nielsen report shows that 90 percent of consumers trust recommendations from people they know, while only 41 percent trust web page ads.

The value of having a social media presence is in the trust you can inspire in current and potential customers.

A separate survey of 269

The Best of the Best LinkedIn – If you wish to interact with clients, prospective clients, referral sources and other professionals, LinkedIn is, by

NEW JERSEY CPA • May • June 2011

16

far, the best social networking site for this purpose. Its power is its ability to link you with others that you may want to know via established relationships.

For example: Barbara, a CPA, is currently connected to her banker friend, Jay. Mark’s oil company is a customer and contact of Jay. Through LinkedIn, Barbara determines that Jay does business and is connected to Mark. LinkedIn now provides Barbara with information that can give her a competitive edge in landing Mark’s accounting business.

We highly encourage all of the professionals at our firm to have a LinkedIn profile. There are many success stories of new client development and lead generation that point directly back to our active presence on this site. Think about the leverage you have in a new client meeting when you not only know details about management and ownership that are not obvious from their website, but know about their hobbies, where they went to college and even common business acquaintances.

A number of tools have recently appeared that link multiple social networking

sites and allow for one post to be replicated across all of the sites that have been linked by the user. A built-in feature on LinkedIn does just that.

Twitter – Although not a true social networking site, Twitter is simply an extension of the blogosphere that many professionals have found to be productive in branding and driving their businesses.

Twitter has drawn the most media attention. It is viewed as one of the most powerful tools to know what is happening in real time.

From a business perspective, Twitter allows your business to brand itself 24/7. CPA professionals can tweet about business topics in their specialty or niche area. Repeated tweets on specialized topics tend to get re-tweeted and then picked up by various search engines and media outlets.

Facebook – This is the best site for employee recruitment.

Facebook not only allows a professional to keep up with friends, colleagues and business associates, the site also features a streamlined, easy-to-use interface.

CPA firms have primarily utilized Facebook to recruit younger staff. Unlike other online-based employee recruitment sites, Facebook allows the firm to share activities and events with potential hires, creating a sense of comfort and community.

However, Facebook could work against a potential new hire if he or she shares too much personal information.

Many firms have actually utilized Facebook to perform due diligence on potential new hires. Check out some of the things WS+B is doing on Facebook at http://on.fb. me/hFrP7r. If you have any question as to the extent to

which Facebook can be a powerful tool, you only need ask the recently liberated people of Egypt.

Pluggio – Pluggio. com allows for continual management of social networking sites. It is a helpful Twitter client that allows for the easy management of continual tweets. I use Pluggio to schedule tweets that touch the accounting and technology sectors. Sites like Pluggio allow you to carry on social networking chatter even while you are away or preoccupied with other things.

So, if you have been waiting to establish yourself or your firm on a social networking site, now is the time. But, similar to a website, maintaining a current social networking presence will require an investment of time.

You can’t be everywhere at once, so focus on a few of the key sites mentioned and then expand upon them as your comfort level develops.

James C. Bourke, CPA, CITP, CFF, is a partner at WithumSmith+Brown where he is director of firm technology.

He is a past president of the New Jersey Society of CPAs and currently serves on the American Institute of CPAs Council and is the chair of the AICPA CITP Credential Committee. He has been named by Accounting Today magazine as one of its “Top 100 Most Influential People” and was recently named by CPA Technology Advisor as one of the “Top 25 Thought Leaders in Public Accounting Technology.” Contact him at jbourke@withum.com.

NEW JERSEY CPA • May • June 2011

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The Art and Science of Presenting Financial Data We have the tools to create beautiful financial presentations, but substance trumps aesthetics.

Presenting financial data effectively requires identifying two important pieces of information: (1) What do you want the data recipients to take away; and (2) What will the recipients actually do with the data?

Answering these questions enables you to answer the presentation questions themselves: What format best represents the data, and how should the format be used to send the intended message? The goal is to meet the information needs of the presenter and recipients, in addition to communicating what is true or accurate.

By Lin Kroeger PWD Consulting, Inc.

What Message Are You Sending, and What Do Recipients Want?

Financial data drives decisions. Is the data you’re presenting enabling someone to commit funds to a project, change marketing activities, justify the hiring or firing of employees or set priorities for the coming year? Invariably, you and the recipients will each have a point of view. These perspectives often differ, so you must analyze what both points of view are and how they are compatible or incompatible. Once you understand the data, you can then decide how best to present it.

NEW JERSEY CPA • May • June 2011

18

If the data recipients can’t easily identify the message, they will find a message in the data that suits their purposes, not those of the presenter.

So, the data requires a strong title or heading that states the presentation’s message, and the data should efficiently represent that message.

For example, assume you are presenting data that shows unexpected quarterly results, and you believe those results are anomalous. Your audience, though, wants to use the unexpected results to justify a key decision to implement change. Your job is to present the data accurately and clearly communicate that the data is the result of unusual circumstances that are unlikely to be repeated. You must limit the ability of the recipients to base a decision on anomalous data, so you would present the data with a title that communicates this, such as “OTC Division – Looking Beyond the Numbers.”

In another example, you are presenting data that shows a positive financial result, and the audience is eager to understand those results. So you would present the data with a title that communicates the desired results from key financial decisions, such as “Sporting Goods Division Hit$ a Home Run.”

What Format Best Represents the Data?

When considering how to present data

in graphic or table form, rely on the message you are delivering. Choose a graph that delivers the data message effectively. No matter how aesthetically pleasing graphs can be, their role is to deliver information. Bar and column charts show comparisons, column and line charts accommodate time or frequency, pie charts show how components compare to the whole.

Experts tend to see pie charts as the least useful because the messages they send are often sent more clearly with bar or column charts. They also suggest that unless a three-dimensional view clarifies the message, choose a two-dimensional option.

How Should the Format Be Used to Send the Intended Message?

Data needs to be presented simply.

Select an appropriate graph or table, and eliminate extra information such as unnecessary colors, lines, images and fonts.

The requirement for effectively presenting financial data is to ensure it communicates the message intended by the presenter and the information the recipients need. Unfortunately, using too many of the available tools can lead to obscuring the data.

Provide context for the data.

Presenting results as absolute numbers doesn’t help recipients understand whether the data is beneficial or damaging. Present the numbers as percentages or in comparison to previous or expected results.

Present financial data at an appropriate level of detail. Excessive detail masks the information, so present numbers as simply as required by the message the recipients need to understand. Eliminate decimal places or round up so that the recipient can understand the significance of the numbers without having to filter details. Don’t eliminate decimal places, however, if that level of detail must be communicated.

PowerPoint PowerPoint remains the dominant resource used to present financial data. Fortunately, it is a rich tool with many appealing, sophisticated options

for presenting data. Unfortunately, that richness can quickly become problematic. “PowerPoint all too easily becomes distracting if too many special effects are used. It can be an effective tool for organizing thoughts and delivering content to a large audience of people with different learning styles, but presenters often depend too heavily on multimedia effects that overwhelm the main points,” says Judy Borsher, CPA, SCG Training and Consulting. As a Microsoft Certified Trainer, Borsher strongly suggests that the three best message delivery tools are slides with bulleted lists or SmartArt bullets; slides with simple bar, column and line charts; and a handout that includes supporting documentation. She adds that limiting the number of fonts keeps the text and graphics clean and readable.

We have sophisticated tools at our disposal to create beautiful presentations, but it is more important that presenters understand the financial data and then communicate the message(s) of the data. “Good analysis is often handicapped in its presentation because the authors have not taken the vital last step of thinking about what the audience cares about and expressing the results in those terms,” notes data presentation expert Jonathan Koomey.

NEW JERSEY CPA • May • June 2011

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Financial Presentation Resources

• Stephen Few, Information Dashboard Design: The Effective Visual Communication of Data, Sebastopol, CA: O’Reilly Media, Inc., 2006.

• Jonathan G. Koomey, Ph.D., Turning Numbers into Knowledge: Mastering the Art of Problem Solving, Second Edition. Oakland, CA: Analytics Press, 2008, Part V, Chapters 32-37.

Lin Kroeger is a management consultant specializing in communication, leadership, team building and collaboration, project implementation and change management.

As a coach, consultant, speaker, writer and trainer, she has worked extensively with accounting and finance professionals in industries such as financial services, professional services, pharmaceuticals and consumer products. Contact her at linkroeger@gmail.com or 917-324-6441.

Member Benefit Outlook, Word, Excel and Adobe Tips, Tricks and Techniques Monday, June 20, Roseland Visit njscpa.org/catalog Express Code: E1106453

A&A

buzz

Revenue Recognition for Technology/Bundled Services B y B rian Hansen, CPA, Horvath & Giacin , P. C .

S

oftware has long given rise to debates about revenue recognition. When a consumer purchases a car, there is little debate about whether a sale has taken place. But what if a consumer signs a two-year contract and purchases a phone with an embedded operating system? What if that contract entitles the consumer to numerous software updates and technical support? Or, what if he or she subscribes to Internet marketing software and the software itself is both customizable and hosted by a cloud-based vendor?

During 2009, the Financial Accounting Standards Board (FASB) Emerging Issues Task Force issued two Accounting Standards Updates, ASU 2009-13 and ASU 2009-14, to address revenue recognition complexities as they pertain to software and multiple-deliverable arrangements. Current authoritative guidance lies in FASB Accounting Standards Codification (ASC) 985-605, Software: Revenue Recognition, and is effective for fiscal years beginning June 15, 2010.

Perhaps these new rules merely change some terms, but they potentially have a huge impact on technology. Apple, for example, has pushed for some of the recent changes.

Previously, it had to recognize all iPhone revenue over a two-year period. The new rules will allow Apple to recognize revenue related to the iPhone hardware as soon as it is sold and recognize the software revenue over the life of the phone based on estimated value. The revenue impact is in the billions of dollars.

ASU 2009-13 ASU 2009-13, Multiple-Deliverable Arrangements, addresses how to separate deliverables and measure and allocate arrangement consideration to one or more accounting units.

Prior to ASU 2009-13, companies had fewer options when accounting for multiple-deliverable arrangements. Prior generally accepted accounting principles required companies to have vendor-specific objective evidence (VSOE) of fair value or third-party evidence of selling price to separate deliverables and to account for the units separately.

Companies were often unable to separate deliverables in an arrangement due to lack of VSOE or third-party evidence of selling price. The new standard adds a third option called estimated selling price, eliminates the residual method and requires entities to apply the relative-selling-price method.

Vendors will be required to determine the estimated selling price for the delivered items through a selling price hierarchy: (1) vendor-specific objective evidence; (2) thirdparty evidence; or (3) estimated selling price. While ASU 2009-13 adds flexibility, it does not specifically address

revenue arrangements that contain both tangible products and software.

ASU 2009-14 ASU 2009-14, Certain Revenue Arrangements That Include Software Elements, addresses revenue recognition when arrangements contain tangible products and software.

In applying the software revenue recognition rules, first determine whether those rules apply as not all software is treated equally.

ASU 2009-14 revises the scope of the software revenue guidance. It separates software-enabled tangible products, such as a smartphone, from the software guidance. Vendors will no longer need VSOE of selling price for undelivered

NEW JERSEY CPA • May • June 2011

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elements sold within a software-enabled tangible product.

Specifically, tangible products containing software components and non-software components that function together to deliver the tangible product’s essential functionality are no longer within the scope of the software guidance in Subtopic 985-605.

What Does This Mean?

Take your laptop or smartphone. If an operating system is essential to the computer it’s sold with, it would be excluded from the scope of software revenue guidance. If the vendor also sells customer support related to the operating system, that support is also excluded from the scope of software revenue recognition.

The key to ASU 2009-14 is determining whether the tangible product contains software that provides for the tangible product’s essential functionality. ASU 2009-14 provides five key factors to consider when making this determination:

• Frequency of sales of tangible product without the software.

• Other product models sold without the software.

• Whether the software is sold on a standalone basis (i.e., can you purchase the operating system separately from the computer?).

• The software need not be imbedded within the product to still provide for its functionality.

• The tangible product should not simply provide a mechanism to deliver software to the customer.

The FASB hopes that ASU 2009-13 and 2009-14 will improve the underlying economics of the transactions and provide users with greater transparency of how a vendor allocates revenue to deliverables.

Brian Hansen, CPA, is a manager with Horvath & Giacin, P.C., and consults for Smolin, Lupin & Company, P.A. Contact him at 609-737-0300.

NEW JERSEY CPA • May • June 2011

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BEST

practices

Choosing the Right Time and Billing Software for Your Practice B y Rosemarie A. Fisher , C PA, R eal Possibilities, L L C

E

ffectively keeping track of time has a twofold purpose: the first is controlling cash flow coming in and leaving your firm; second, you can monitor client profitability and staff productivity. Time and billing software is not just about getting an accurate bill into your client’s hands quickly, but also how to determine how much time your staff spends on a job, and if that time is productive and profitable. Once you establish these objectives, you can then look for a software package that enables you to meet these goals. There are several good software packages on the market that can help you do this. Below are five criteria to consider when evaluating a time and billing software package to meet your needs:

To Be or Not to Be in the Cloud The first and foremost decision to make is whether you should use Internet-based (cloud) computing, whereby shared resources, software and information are provided on-demand.

This really depends on how your staff works and if you need access anytime, anywhere from multiple devices, such as cell phones or personal computers. If you have a large staff and some custom requirements, such as integration with a full-blown practice management solution, you may need a server-based installation. However, for most average-sized practitioners a cloud model is the best answer. There is no software to install and maintain, and there are no upgrades and maintenance to perform. This is all handled by the hosting company, and you securely log in from any Internet-connected device.

Number of Users Next, determine how many staff will be using the system.

You will need to calculate the number of timekeepers, administrators, billers and report generators. Most cloud models charge based on the number and type of user, so having this information during the search process will facilitate cost comparisons.

Reporting Needs If you currently have a time and billing system and are looking to upgrade, list the things your existing package doesn’t do. If you are doing a new install, find out if you can run reports by: • Client • Staff person • Task • Date • Profitability reports, built-in cost-tracking

NEW JERSEY CPA • May • June 2011

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You may not need all of these, but this list offers some features to consider when deciding on a product.

In Sickness & Good Health

Integration Use the answers to these questions as a starting point to help guide you to the best solution: • How do I get customer data loaded?

• How do I input tasks? Are there multiple layers of tasks?

• How does staff enter time and expenses?

• Is there a time-sheet approval process?

• How do the various rates work, and can I have multiple bill rates?

• How do I get cost information? Is there a cost-factor by employee or by task?

• Are there any project management capabilities?

• How do I bill, and can I email an invoice?

• Are there accounts receivable functions, past due statements, client letters?

• What interface do I need with my general ledger software (e.g., QuickBooks)?

QualCare is the largest provider owned full service managed care organization in New Jersey.

QualCare offers a small to mid-size Group Health Plan

Pricing There are a variety of solutions available at several price points. Once you determine your needs and start researching solutions, you can find a solution in almost any price point.

There are some basic solutions for free and some high-end solutions for several thousand dollars.

Affiliated Physicians Health Plan

Take A Look at These Three Time and Billing Software Front-Runners:

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Practice Relief – This tried-and-true organization was one of the first entries into cloud computing. Its product is easy to use, intuitive and priced per month or annually (accountantsworld.com).

ImagineTime – Designed by a CPA, this product is customizable. It has separately priced features, remote time entry and direct import from Lacerte, UltraTax, ATX tax prep software and QuickBooks integration. Priced by user, it is a standalone (single user) or network (multiuser) solution (imaginetime.com).

Office Tools Professional – This application provides good time and billing, but it also provides a full practicemanagement solution. It includes contact management, scheduling, project tracking and more. Sold as an integrated solution, it is priced by the number of users (officetoolspro.com).

(Medical Billing, Medical Transport, Nursing Agencies, Physicians, Dentists, Chiropractors, Labs, Medical Supplies, Etc.)

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Rosemarie A. Fisher, CPA, is president of Real Possibilities, LLC, a firm that provides outsourced accounting and tax preparation services. She is also a member of the New Jersey Society of CPAs Technology Interest Group and Mercer Chapter Board of Directors. Contact Fisher at rose@realposs.com.

Member Benefit

(888) 670-8135 Press option 6 or Email: mewasales@qualcareinc.com

Learn more about cloud computing at the NJ Accounting, Business & Technology Show, May 18 and 19, in Secaucus.

Register at njscpa.org/convention/abt.

NEW JERSEY CPA • May • June 2011

23

FINANCIAL

planning

Educating Partners (and Yourself) on Financial Planning Products

By Damien J. Paumi, Nisivoccia LLP

W

henever an accounting firm thinks about educating partners on financial planning products, inevitably two questions to answer are, “What’s the most important thing we should be doing, and what should we do first?” This can be difficult to answer simply because there are so many different products and solutions in financial planning, everything from the use of individual securities or separately managed accounts to what type of life insurance coverage makes the most sense for that client’s buy-sell. If there was one step I would recommend above all others, it would be the design

and implementation of a monthly firm financial planning product meeting.

Financial Planning 101

Meeting Format There are many variations to this important function. Effective meetings can last one hour or could take a few hours. Some firms include all staff members, and others have only licensed partners and advisor(s). Some firms review only one type of product per month, while others also review all of the products and strategies that a firm is using at that moment. There is no magical formula for how to format the meeting. A firm should use whatever

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format makes sense for it. The real value of these meetings is the ability to share information, hold all parties accountable and seek consensus on the firm’s strategy.

Meeting Champion What should be discussed at that meeting, and who should be leading the discussion? These are up to the firm’s leadership. Some firms choose to have a champion partner who spearheads the process of adopting and building a financial service practice at the firm.

Other firms may have a dedicated financial advisor who coordinates the development of the wealth management practice. These dedicated people are adept at providing support and guidance in offering financial services to their clients. They may also be the ones who search for new products in the marketplace. The key, as a financial planner, is to educate yourself and your firm not only on what you have used in the past, but also try to learn what else is available and what others may be currently doing.

Educational Resources

For a free demonstration CD of IDEA, contact us at audimation.com or call 888-641-2800.

IDEA is a registered trademark of CaseWare International Inc.

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Some firms use internal or external product wholesalers. Others may rely more heavily on an affiliated brokerdealer or custodian. The key is to look at products and education from a local, regional and national level. Being on the board of the New Jersey Financial Planning Association, the quarterly

regional meetings, dinner meetings and all-day conferences definitely help. I learn from the various presenters as well as the attendees, each having varying opinions on what is best for clients. I also rely on my teammates at the firm and various industry contacts. Admittedly, I sometimes even listen to my neighbors or non-financial-service friends tell me all about the wonderful new financial products that they were introduced to on the golf course or the unique derivatives they recently read about.

The Presentation Once you determine what you are going to talk about at your firm’s financial planning product meeting, the next step is finding the right professional or educator on the topic. Best practices recommend that these learning sessions should not only involve an informational overview of the topics, but also include time for questions and possibly even a case study. For firms that recommend products and services, this process can be taken a step further and incorporate a due-diligence review. When completing this review, it is important to have a systematic format in which questions are answered in order to differentiate between the various offerings and providers.

However your firm decides to implement educating partners on financial planning products, the most important step is actually scheduling and conducting that initial meeting to learn and decide if this is something that the firm believes would benefit clients and its partners. Once you have a system that works for your firm, repeat it consistently.

Damien J. Paumi, CRPC, CFP, is a wealth management advisor with the Nisivoccia LLP Financial Planning and Wealth Management Group. He specializes in personal financial planning, retirement income and planning, estate planning and wealth preservation. He is a member of the Financial Planning Association of New Jersey. Contact him at dpaumi@ nisivoccia.com or 973-328-1825.

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NEW JERSEY CPA • May • June 2011

25

Forensic

file

Forensic Accounting Goes High Tech

By Rebecca B. Fitzhugh, CPA, Sobel & Company LLC , CPAs

C

urrently, “e-Forensics” is not a well-recognized term. It could easily be interchanged or confused with “computer forensics,” “digital forensics” or “electronic discovery.”

Each describes a slightly different variation of technology in forensic accounting. But, for purposes of this article, we will lump all the above terms into the category of e-Forensics.

who knows how to image and analyze a device without compromising data integrity and who will properly preserve the chain of custody. While collection and analysis of digital information can be expensive, you do not want to ruin a case due to the careless handling of data by someone who is not properly qualified.

Getting the Lay of the Electronic Land

In the Spotlight

E-Forensics involves the recovery and investigation of information stored on digital devices, which includes email, word processing documents, spreadsheets, presentation files, databases, computer design drawings, accounting files, some forms of medical records and other types of computer records.

As each new generation of digital devices is introduced, the field of digital forensics continues to expand.

The importance of collecting, storing and examining digital data in a forensically sound manner cannot be overemphasized. Should you be involved in a matter in which digital data must be collected and analyzed, retain an expert

While e-Forensics is frequently used to investigate computer crime, it is also used in civil cases where evidence needs to be extracted from massive amounts of data. Fraud has been around for as long as one person has had something that someone else wanted. Now, with technology playing such an important role in our lives, the same frauds are being committed, but the tools used to commit such frauds have changed. For example, Inside Jersey magazine recently discussed the migration of organized crime to the Internet in “The Jersey Mob 2.0.” The field of e-Forensics has developed in response to the new high-tech world of fraud.

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Legal Challenges The legal system has faced numerous challenges created by the digital revolution. In 2004, a landmark case, Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004), produced five written opinions regarding e-discovery that influenced the 2006 Amendments to the Federal Rules of Civil Procedure relating to electronically stored information (ESI).

The fifth opinion under Zubulake dealt with UBS Warburg’s apparent disregard for a “litigation hold” that should have prevented it from destroying relevant information, both electronic and paper. In this particular case, which involved employment discrimination, the defendant failed to prevent employees from deleting emails, and other employees failed to produce relevant information. Known as spoliation of evidence, it refers to the willful destruction of evidence or failure to preserve potential evidence for another’s use in pending or potential litigation. (This is why the Big Five is now the Big Four.) Having a document retention and destruction policy that applies to both paper and electronic documents is a must these days, and the importance of following that policy to set a precedent for your procedures is paramount. There is a big difference between destroying information pursuant to standard operating procedures and destroying information to stonewall pending or potential litigation.

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Other Discovery Principles Another major influence on the 2006 Amendments to the Federal Rules of Civil Procedure was the Sedona Principles for Electronic Document Production (thesedonaconference. org). These are a set of 14 principles that were developed by members of the Sedona Conference in order to apply the basic discovery principles to the new medium of ESI.

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As guidance has been developed in the legal system and by think tanks such as the Sedona Conference, it is important that companies be aware of their rights and obligations when it comes to the massive volumes of electronic data they handle. It is alarming to consider the amount of information companies have and where it can go with all of the portable devices and smartphones in use.

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Rebecca B. Fitzhugh, CPA, CFF, CFE, is a senior manager with Sobel & Company LLC, CPAs. She is a member of the NJSCPA Board of Trustees and the New Jersey CPA Editorial Advisory Board. Contact Fitzhugh at rebecca.fitzhugh@sobel-cpa.com.

Federally insured by NCUA NEW JERSEY CPA • May • June 2011

27

INDUSTRY

insights

SOX Evaluation Software

By Michael Pinna, CPA, and Tarun Malhotra, WeiserMazars LLP

T

he passage of the 2002 SarbanesOxley Act (SOX) invoked numerous changes regarding the auditing, corporate governance and financial reporting of public companies in the United States. Beginning in 2003, the first wave of companies (e.g., large/ accelerated filers) began complying with the provisions of SOX. (Nonaccelerated filers with a market capitalization of less than $75 million were granted year-to-year exemptions by the Securities and Exchange Commission and ultimately granted a permanent exemption by Congress in 2010.) Since SOX only specified the final requirements, companies were left with a wide-ranging set of options for how to comply with the final provisions of SOX. At the dawn of SOX, the most common methods to document and test controls were often cumbersome.

Documentation was performed using applications such as Word and Excel, coupled with in-house-developed web solutions that were used for reporting.

While these methods helped companies initially comply with SOX, the amount of information soon became overwhelming and difficult to track and report. For example, in a midsized company of approximately $500 million in sales, we tracked more than 250 Word and Excel files, reported on more than 1,300 controls, tested approximately 400 key controls and monitored, tracked and reported on more than 280 gaps and exceptions.

(CEBOS), PWC Teammate, PeopleSoft Internal Controls Enforcer, Risk Navigator, IBM’s OpenPages, Protiviti’s Governance Portal, AlignAlytics and HandySoft’s SOXA Accelerator.

Most of these software applications are web-based and allow each process stakeholder to have a personalized view of all tasks based on their roles and responsibilities. The advantages of these types of packages include: • Easy and efficient sharing of controls documentation and testing work within the organization.

• Complete audit trail of internal control documentation (e.g., document creation, modification, distribution, usage and review).

• The ability to automate specific testing functions, such as a segregation of duties analysis.

• Tools to make project management and reporting efficient. Tools provide real-time information on the project’s management and status.

• Streamlined collection of documentation to make the process easier to manage. Process owners can access the application and upload all the supporting documents required as evidence for a particular control.

• Support for electronic signatures for sign-offs, review and approval, reducing review and approval time.

• The ability to assign any deficiencies identified to individuals for resolution.

These can easily be tracked, and the status of all open and closed issues can easily be reported on.

Software to the Rescue

Conversely, there are some potential disadvantages to using these packages: • The degree of report customization may not be as detailed as required.

In many systems, the user needs to export the data into Microsoft Word or Excel and then re-format the data.

This becomes cumbersome because whenever there is a change in the

To help companies comply with SOX and manage the volume of data inherent in the process, many commercial software packages were developed and marketed as SOX compliance software. Some deployed at companies include SarbOxPro, MQ1 Sarbanes Oxley, Compliance Software

NEW JERSEY CPA • May • June 2011

28

internal control documentation, it is necessary to re-export the data into Word or Excel and re-format the report again.

• There is a significant cost associated with implementing any automated software tool. This includes the software licensing costs, costs associated with any technology infrastructure purchases to support the new application, and training and implementation costs. The entire package needs to be thoroughly evaluated from a cost/benefit perspective.

While SOX has been in effect for a while now, the amount of reporting and compliance activities has not decreased.

In many companies, these activities have actually increased due to mergers, acquisitions and staff attrition. There are applications that can help with the management and reporting of the SOX process. While these applications can help companies manage the SOX process more efficiently, there are potential drawbacks that must be evaluated for each system. Only by making an informed decision will the true benefits of any potential SOX application be realized.

Michael Pinna, CPA, is a director and Tarun Malhotra is a manager in internal audit services at WeiserMazars LLP. Pinna is a member of the New Jersey Society of CPAs. Contact the authors at michael. pinna@weisermazars.com or tarun. malhotra@weisermazars.com.

Small/Sole

practitioner

Hiring an IT Consultant Versus In-House Staff

By Mario Nowogrodzki, CPA, Mendelson Consulting

D

o you rent or own your home, lease or purchase your automobile? We are often faced with such decisions. From a technology perspective, you have the option to pay for server hosting (rent) or deploy your own internal server (buy). Many would say that the same buy-versusrent choice applies to your information technology (IT) support: When should you hire internal IT staff versus hiring an external consultant?

More than a choice, this is a decision that evolves out of need.

Deciding whether to hire or outsource your IT support is based on several considerations: costs, pragmatism, knowledge and skills, among others.

Both options can have far-reaching advantages and implications for any company, be it monetary, availability or uptime and, most importantly, peace of mind.

Most startups begin by using outside IT consultants. Some business owners are computer savvy and will take care of their own setup and upkeep, and a few individuals have a friend or family member who is an IT expert. However, friends or family do not necessarily make the best IT consultants, primarily because they end up doing the work pro bono, which is usually not a good recipe. For the rest, outsourcing is the way to go in the beginning, when business activity does not warrant or allow for having in-house IT staff.

As businesses expand, their dependency on continuity and uptime grows. As such, when budget allows, companies look to hire internal IT staff. Typically, this is when the decision making begins. But the process should start at the beginning of a company’s existence. Businesses should plan for which point in a business’ life cycle to hire IT staff or whether to use

outside consultants on an ongoing basis for IT support. Both approaches have advantages and considerations.

Hiring IT staff ensures that you always have someone at hand, someone dedicated 100 percent to your company. Of course, this comes at a price. Generally, hiring full-time IT staff costs more than outsourcing. And such a full-time person is not available 24/7, whereas outsourced technicians can be available in shifts. In-house staff will usually have some downtime, and their complete abilities may not be fully used and/or may be short in certain specific skills.

It is easier to get a variety of skill sets by outsourcing. It is virtually impossible to hire enough staff to find that range of skills or find one individual who is that multitalented.

Outsourced staff can have greater collective consulting expertise. Often, this greater expertise is a result of working with many clients instead of for just one company. Clients of consultants benefit from what is learned while solving other people’s problems. Education and training are usually on the consultant’s own time, not on the company’s, as outsourced consultants often have more incentive to keep up with technology.

So, what are the implications? Pay employee salary and benefits, or pay for services on an as-needed basis?

If money is the key factor, run a comparative cost analysis to decide between the two approaches. In-house employees require benefits, vacation time, scheduling and managing. These costs can add up quickly.

Many feel that outsourcing IT work means having to deal with different technicians. That does not have to be the case. Usually, consultants assign one technician, and perhaps a backup NEW JERSEY CPA • May • June 2011

29

technician, to each account. Thus, familiarity and personal relationships are maintained.

An often-overlooked factor is accountability. Internal staff is accountable to a supervisor and the company. They are motivated by the typical things: salary, benefits and work environment. But an outsourced provider can be just as, if not more so, attentive to what matters and responsive to a client’s needs. I’ve found that people you hire will do whatever you want them to do; people from outside will do what needs to be done.

Mario Nowogrodzki, CPA, CITP, is the founder and principal of Mendelson Consulting, an accounting technology consulting firm that assists entities with planning, selecting and implementing accounting information systems.

Nowogrodzki is a member of the Florida Institute of CPAs, an author and speaker for Intuit and The Sleeter Group, and co-founder of the South Florida QuickBooks Meetup Group. Contact him at mario@mendelsonconsulting.com or 954-447-0250.

TAX

talk

A Few Ways to Improve E-Filing B y M ichael Hoffman, C PA, K B M G, LLC

Rejected Returns

O

ver the past several years, e-filing has become more the norm versus the exception for many accounting firms, as well as for self-prepared returns. Taxpayers have become increasingly more comfortable with the concept of submitting tax returns electronically. Positive e-filing attributes include faster refunds, less processing time and a decreased number of erroneous notices.

The Internal Revenue Service (IRS) is encouraging taxpayers to utilize e-file.

In fact, Congress has recently mandated that tax professionals who prepare more than a specified amount of tax returns must electronically file tax returns.

While this mandate may be phased-in over time, the message is obvious. While e-filing has brought tax preparation into the 21st century, there are things that can be done to make the process better – not only for taxpayers, but for practitioners, too.

Still Too Much Paper While the IRS is encouraging e-filing, it is, at the same time, issuing new tax provisions that also require paper submissions. For example, HUD-1 statements are mandatory submissions for homebuyer credits due to the abusive and false credits that were claimed over the past few years. If taxpayers fall into this situation, they can either paper file the return or electronically file the return and then timely submit Form

8453 with the required documentation.

Many practitioners have not submitted accompanying forms with Form 8453 and have not received any notices from the IRS indicating that information is missing. However, it appears that if that mandatory information is not submitted, the electronically filed return is not complete and, as such, the statute of limitations for that period has not begun.

In addition to the HUD-1 requirement, there are actually 13 reasons why Form 8453 may need to be utilized, and these paper submissions must be sent within three days of when the e-filed return is accepted.

This is a very burdensome chore so close to filing deadlines, and these circumstances nearly negate the ease of e-filing for practitioners. A couple of the more common reasons for needing Form 8453 submissions include capital gains transaction detail and formal documentation on charitable donations (appraisals).

There is a rather simple solution to all of this. For electronic submissions of individual tax returns, the IRS needs to allow PDF attachments to be sent with the return. This would eliminate the need for Form 8453 and allow all information to be transmitted together.

This should not be a difficult process for the IRS because it currently allows PDF attachments for the e-filing of other types of tax returns.

NEW JERSEY CPA • May • June 2011

30

Another area of improvement would be to simplify and more clearly indicate what needs to be corrected on returns that are e-filed and subsequently rejected. For certain problems, the explanation is clear and easy to fix.

For others, there is no clear way to interpret the message, and practitioners need to rely on their tax software customer service teams to help solve the problem. Needless to say, sitting on hold in late March and early April to talk to somebody about solving an e-file problem is a very frustrating notion.

Interstate Consistency Another area for e-filing improvement and efficiency involves getting all states on board with e-filing of all return types.

New Jersey does not currently accept electronic submissions for corporate income tax returns, while the IRS does.

When returns are sent to clients and the federal return is being e-filed while the state return is not, clients often become confused. A smoother process for clients in this situation would be to paper file the federal returns as well. This “papermore” solution, however, is in direct conflict with what we are all trying to accomplish. Once all of the states can get on the same page with the IRS, it will be a much easier, simpler and lessconfusing process.

Over the next few years most, if not all, of these problems will hopefully be corrected. Until then, do your best, and embrace electronic filing. It’s here to stay.

Michael Hoffman, CPA, is a partner at KBMG, LLC. He is a member of the New Jersey Society of CPAs. Contact Hoffman at mhoffman@kbllc.com or 732-745-8800.

TECH

center

Your IT Department as a Profit Center B y Thomas Angelo, C PA, SGA Grou p, P. C .

W

hen most managing partners and firm administrators think about their information technology (IT) departments, the first thing they think of is how much money they commit to technology annually. In growing CPA firms, technology is as important as staffing, client service and succession planning. If your firm is not capitalizing on the latest technology to provide profitable and efficient services, one of your competitors will. So, is there a way you can maximize internal technology staff and maybe move them from just support staff to billable staff?

If your firm is lucky enough to have an internal technology staff, it may be beneficial to create a service line around them so they can provide technology assistance to your small and mediumsized business clients. Your IT staff is a valuable company asset, and many of your clients are most likely outsourcing their IT support and network management to another firm. As a CPA, you have developed an incredible amount of client trust. Entrepreneurial firms are always seeking ways to crosssell services and increase the revenue from their existing books of business.

So, what are the steps in moving the IT department from a cost center to a profit center?

Strategic Plan With any new service line, the firm needs to create or modify its strategic plan to offer technology consulting, managed services and support. The firm must determine if staff has the proper skills to offer such services.

How much time is required of the IT staff to continue supporting your firm’s daily users? Create a budget that includes salaries, marketing, software and hardware needed to support outside users. Obtain firm buy-in from all

partners and anyone else in the firm who cross-sells services.

Pricing and Fees Technology support fees have moved from the break/fix model, which is basically charging clients hourly to troubleshoot or fix their computers, to that of managed services. Managed services is a process and business model where your IT department will monitor your clients’ networks, servers and desktops 24 hours a day and notify clients when issues occur or are about to occur. Your IT staff can monitor hard drives, memory, anti-virus and spam control – all remotely from your office.

If something goes wrong, they can most likely respond to the problem remotely.

Through this model, your firm would charge your client a flat monthly fee that incorporates a predefined number of services. Often, you can develop a menu of services and different plans to accommodate client needs. Some plans may include unlimited remote services, while an all-inclusive plan may have unlimited remote and on-site services, all for one fee. There may be additional service offerings going forward, and you will need to carefully plan these managed services agreements with your technology staff.

Marketing As CPAs and firm leaders, we know how important marketing is in generating new business and additional business from existing clients. Your IT NEW JERSEY CPA • May • June 2011

31

staff may not be as skilled at business development or have the time to do it.

Appoint a champion in the firm who will manage the technology consulting part of the business and assist in marketing new services. This champion should review the client list with the partners of the firm to determine which clients may require IT services or are currently outsourcing them to another provider, and develop a market target list of prospects. Using an outside marketing firm or internal resources, let clients know you are now offering IT services.

Our firm created a separate entity to provide technology services to our clients. We did this primarily as a marketing tool to indicate that we were serious about providing technology services and could compete against other professional providers. In addition, we have successfully paid for our internal IT support with revenue we earn from delivering technology and managed IT services to both existing clients and outside organizations. With a little planning and vision, your firm can earn a handsome return on your IT budget.

Thomas Angelo, CPA, is a partner at the SGA Group, P.C. He is a member of the New Jersey Society of CPAs Technology and Nonprofit interest groups. Contact him at tangelo@sganj.com or 732-381-8887.

SOCIETY

pages

2011/12 Executive Committee Carole A. Hedinger, CPA

New Jersey State Lottery President Carole A. Hedinger, CPA, Executive Director at the New Jersey State Lottery, Lawrenceville, joined the New Jersey Society of CPAs in 1984. She has served on the NJSCPA Board of Trustees as secretary, vice president and trustee; chair of the Strategic Planning Committee; and as an NJ-CPA-PAC chair and trustee. She is currently a member of the State Taxation, Federal Taxation, and Litigation Support and Forensic Accounting interest groups, as well as a Scholarship Fund Trustee.

Hedinger is a member of the American Institute of CPAs. She is a recipient of the Ocean County Community College Distinguished Achievement Award and the Toms River Regional Schools Hall of Fame Award and was inducted into the Georgian Court University Court of Honor.

In her community, Hedinger is chair of the Health South Rehab Hospital Citizen’s Advisory Council and has served on the Board of Trustees for Richard Stockton College of New Jersey.

Hedinger received her B.B.S., magna cum laude, in business from Georgian Court College and A.A. in business from Ocean County Community College. She and her husband, Len, reside in Toms River and have two daughters.

Thomas F. Roche III, CPA

Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC President-Elect Thomas F. Roche III, CPA, Principal at Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC, Cranford, joined the New Jersey Society of CPAs in 1981. He has served on the NJSCPA Board of Trustees as vice president and trustee. He was a member of the Meetings & Special Events committee and chair of the Insurance Trust and Committee Operations Committee. He has also served as an NJ-CPAPAC trustee and secretary. In the Union County Chapter, he served as treasurer, secretary, vice president and president.

Roche is a member of the Commerce & Industry Association of New Jersey, the Gateway Regional Chamber of Commerce and a past president of the Union Township Chamber of Commerce.

In his community, Roche is the treasurer of the Westfield Police Athletic League and a board member of the Stephen F. Mannuzza Foundation, Inc. Roche earned his B.A. in accounting from Pennsylvania State University. He and his wife, Nancy, reside in Westfield and have a son and a daughter.

NEW JERSEY CPA • May • June 2011

32

Lloyd F. George, CPA

Lloyd F. George CPA, LLC Secretary Lloyd F. George, CPA, Principal at Lloyd F. George CPA, LLC, Plainsboro, joined the New Jersey Society of CPAs in 1992. He has served on the NJSCPA Board of Trustees as a trustee. This is George’s second year as secretary. He is a member of the NJSCPA Valuation Services and Litigation Support & Forensic Accounting interest groups and the Financial Literacy Committee and is a trustee of the NJSCPA Education Foundation. He has also served as a member and co-chair of the NJSCPA Help Center and the Dues Management Task Force. In the Mercer Chapter, he has served as president, vice president and secretary and was twice a recipient of the Mercer Chapter President’s Award.

George is a member of the American Institute of CPAs, the National Association of Certified Valuation Analysts and is a member of the Audit Committee of the Electrochemical Society, Inc., and the board of the New Jersey Entrepreneurial Network.

In his community, he was a founder and the first president of the West Windsor-Plainsboro Education Foundation, Inc., a member of the school board, chair of its Finance and Facilities committees and co-chair of the Facilities Expansion Task Force. He also serves as an executive-in-residence at Rider University.

George earned his B.S. in engineering from the United States Coast Guard Academy and his M.B.A. in management from Boston University. He and his wife, Barbara, reside in Plainsboro and have three daughters and four grandchildren.

Walter J. Brasch, CPA ParenteBeard LLC Treasurer

Walter J. Brasch, CPA, Regional Managing Partner at ParenteBeard LLC, NY/NJ Metro Region, Clark, joined the New Jersey Society of CPAs in 1977. He has served on the NJSCPA Board of Trustees as a trustee. He is currently a member of the NJSCPA Health Care and Governmental Accounting & Auditing interest groups and chair of the NJ-CPA-PAC. He has also served as president, vice president, secretary and director of the Monmouth/Ocean Chapter.

Brasch is a member of the Health Care Financial Management Association, associate business member of the New Jersey Association of School Business Officials and board member of the New Jersey State Chamber of Commerce.

In his community, Brasch served as board chair and treasurer of the Raritan Bay Medical Center, alumni association president of Christian Brothers Academy, board member and committee chair of the American Cancer Society and board member and treasurer of Boy Scouts of America, Monmouth Council. He is the recipient of the CBA Alumnus of the Year Award from Christian Brothers Academy.

Brasch earned his B.B.A. in accounting from St. Bonaventure University. He and his wife, Ann, reside in Little Silver and have a son, a daughter and two grandchildren.

Robert S. Marrone, CPA

Bowman & Company LLP Immediate Past President Robert S. Marrone, CPA, Partner at Bowman & Company LLP, Voorhees, joined the New Jersey Society of CPAs in 1985. He has served on the NJSCPA Board of Trustees as president, president-elect, vice president, secretary and trustee. He is chair of the NJSCPA Education Foundation Executive Committee and former president of the NJSCPA Scholarship Fund. He has served as chair of the Governmental Auditing & Accounting and Legislative Advisory Council committees and as a member of the Young CPAs and Finance committees, as well as trustee, secretary and chair of the NJ-CPAPAC. He has also served as president, vice president, secretary, treasurer and director of the Southwest Jersey Chapter.

Marrone is a member of the American Institute of CPAs Council. He is also a Registered Municipal Accountant.

In his community, Marrone is a member of the New Jersey Association of School Business Officials and has served as treasurer of the New Jersey Chapter of the March of Dimes as well as chair of its South Jersey Division. He currently serves on the board of the South Jersey Division and is a member of the South Jersey March of Dimes’ Golf Classic Committee. He has also served as an adjunct professor at Drexel University’s LeBow College of Business.

Marrone earned his B.S. in business administration from Drexel University. He and his wife, Patricia, reside in Mount Laurel and have four sons.

NEW JERSEY CPA • May • June 2011

33

Ralph Albert Thomas

New Jersey Society of CPAs Executive Director Ralph Albert Thomas began his service as Executive Director of the New Jersey Society of CPAs in 1999. He joined the Society in 1985 and has served in various capacities, including the NJSCPA Board of Trustees as treasurer.

He is a member of the American Institute of CPAs, where he currently serves on the AICPA Pre-Certification Education Executive Committee and has served on the AICPA Peer Review Board, Strategic Planning Committee and Council.

Thomas was a director of CPA/SEA (Association of Society Executives) and also serves on the Accounting Advisory Boards of Rutgers and Seton Hall Universities. He has served as President of the Lehigh University Alumni Association and is a member of Lehigh’s Board of Trustees and the Board of Advisors of Lehigh’s College of Business. He has also served on the board of The National Association of Black Accountants, Inc., where he is a lifetime member and past national president. Accounting Today magazine recently named Thomas as one of its “Top 100 Most Influential People.”

Thomas earned his B.S. in business and economics and his M.B.A. from Lehigh University. He and his wife, Valerie, reside in South Brunswick and have a daughter.

SOCIETY

pages

Board of Trustees Trustees serving a two-year term expiring May 31, 2012:

Lewis D. Bivonia, CPA

Rebecca B. Fitzhugh, CPA

Linda Gibson, CPA

Robert Nanfro, CPA

WithumSmith+Brown

Sobel & Company LLC, CPAs

Gold Gocial Gerstein LLC

LG Electronics USA, Inc.

Trustees serving a three-year term expiring May 31, 2013:

Jose E. Bombino, CPA

Susan Burke, CPA

Maryann Holloway, CPA

Kenneth Pogrob, CPA

Jose E. Bombino, CPA

Fabietti, Hale, Hammerstedt &

Bowman & Company LLP

WeiserMazars LLP

Powers, P.A.

Trustees serving a three-year term expiring May 31, 2014:

Edward I. Guttenplan, CPA

Karl A. Halteman, CPA

Jody Rorick, CPA

Mary E. Zago, CPA

Wilkin & Guttenplan, P.C.

Wil Research Holdings

Jody Rorick, CPA

Union County College

NEW JERSEY CPA • May • June 2011

34

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ADP is a Preferred Payroll Provider for the New Jersey Society of CPAs. Call 973-739-3336 today. *Discount/free payroll applies to companies with 1 to 49 employees that sign complete ADP sales order and to all features of standard payroll processing invoiced on client’s regular processing cycle and does not include additional non-payroll services; excludes pass through costs, courier and other delivery fees, including off cycle fees, hardware, or penalty and interest fees. Only available to new ADP Clients using EasyPay sm or RUN Powered by ADP® in the continental U.S. Must be set-up for direct debit of fees (“DDF”) as the payment method. © 2011 ADP, Inc. The ADP Logo, ADP are registered trademarks of ADP. EasyPay is a service mark and RUN Powered by ADP is a registered service mark of ADP, Inc. All other trademarks are the property of their respective owners.

SOCIETY

pages

CPE Offerings and Events Upcoming Education Foundation Events Date

Event/Code

Location

CPE Credit

5/18-19

2011 New Jersey Accounting, Business & Technology Show (E1105030)

Secaucus

12/MC

5/18

CPA Exam Study Session (E1105235)

Roseland

N/A

5/25

Cooperation with Bankers Breakfast: Estate Planning Update (E1105210)

Iselin

1/TX

5/26

Audits of Employee Benefits Conference (E1105200)

Iselin

8/AA

5/26

New Jersey Law and Ethics (2009-11) Webinar (E1105184)

N/A

4/PE

6/1

Professional Ethics for New Jersey CPAs and Frequently Asked Questions in GAAP Financial Statements (E1106091)

Roseland

4/AA 4/PE

6/1

Accounting Services, Compilations and Reviews: Effective Risk Management (E1106211)

Iselin

8/AA

6/2-3

Scholars Institute (E1106085)

New Brunswick

N/A

6/2

Cash and Tax Basis Financial Statements – Preparation and Reporting (E1106221)

Iselin

8/AA

6/6-7

IFRS Essentials with GAAP Comparison: Building a Solid Foundation (E1106233)

Roseland

16/AA

6/7

Audits of 401(k) Plans (E1106241)

Iselin

8/AA

6/8-10

2011 NJSCPA Convention and Expo (E1106010)

Atlantic City

16.5/MC

6/8

Compilation and Review Engagement Essentials (E1106251)

Iselin

8/AA

6/8

XBRL and the New Era in Financial Reporting: Moving Beyond Theory (E1106263)

Roseland

8/AA

6/9

AICPA's Controllership: 25 Critical Lessons from the Trenches (E1106273)

Roseland

8/AA

6/10

Business Sustainability: Keeping Lean but with More Green for the Company's Long Haul (E1106283)

Roseland

8/MT

6/13

Form 990: AICPA's Answer to Unlocking the Tax Complexities (E1106291)

Roseland

8/TX

6/14

Loscalzo's Step-by-Step Guide to Compliance Auditing – A Gateway to Efficiency (E1106121)

Roseland

8/AA

6/14

Auditing for Internal Fraud (E1106303)

Voorhees

8/AA

6/15

Advanced Forensic Techniques for Accountants (E1106313)

Voorhees

8/AA

6/15

Advanced Real Estate Accounting, Auditing and Taxation (E1106373)

Roseland

8/AA

6/15

Loscalzo's Not-for-Profit Auditing Made Easy (E1106111)

Iselin

8/AA

6/16

Governmental Conference (E1106070)

Edison

8/AA

6/16

Loscalzo's Hands-On Guide to Understanding and Testing Internal Control (E1106103)

Iselin

8/AA

6/16

Construction Contractors Advanced Issues (E1106331)

Roseland

8/AA

6/17

Forensic Accounting: Fraudulent Reporting and Concealed Assets (E1106343)

Roseland

8/AA

6/20

Loscalzo's Disclosure – The Key to Financial Statements (E1106131)

Roseland

8/AA

6/20

Outlook, Word, Excel and Adobe Tips, Tricks and Techniques (E1106453)

Roseland

8/CS

6/20

Advanced FASB Review and Update: Tackling the Tougher GAAP Issues (E1106363)

Iselin

8/AA

6/21

Applying the Risk Assessment Standards Using a Case-Study Approach (E1106351)

Iselin

8/AA

6/21

CPA Technology Boot Camp: Key Trends and Strategies Every CPA Should Know and Understand (E1106461)

Roseland

8/MT

6/21

Loscalzo's Compilation and Review Essentials – The New Rules for Local Practitioners (E1106141)

Roseland

8/AA

6/22

New Jersey Law and Ethics (2009-11) Webinar (E1106064)

N/A

4/PE

6/22

AICPA Advanced Course: Overview of the AICPA Peer Review Program Standards (E1106411)

Iselin

8/AA

6/23

Foundations in Governmental Accounting (E1106321)

Roseland

8/AA

6/23

Loscalzo's Accounts Payable Fraud: Overlooked Schemes and How to Detect and Prevent Them (E1106423)

Freehold

8/AA

6/24

Loscalzo's GAAP Refresher (E1106161)

Iselin

8/AA

6/24

Governmental Accounting and Reporting: Putting It All Together (E1106371)

Roseland

8/AA

6/27

Choice of Entity – Key Issues: S Corp, C Corp, Partnership, LLC and Sole Proprietorship (E1106381)

Roseland

8/TX

6/27

Accounting and Auditing Considerations for 403(b) Plans and Important 2011 A&A Developments (E1106431)

Roseland

8/AA

NEW JERSEY CPA • May • June 2011

36

6/27

Applying the Audit Risk Assessment Standards: A Course for Newer Auditors (E1106491)

Iselin

8/TX

6/28

The Role of the CPA in Strategy Development and Implementation (E1106513)

Roseland

8/MT

6/28

Loscalzo's Audits of Defined Contribution Pension Plans (Emphasizing 401(k) Plans) (E1106181)

Iselin

8/AA

6/28

Closely Held Business Taxation: 49 Practical Ways to Cut Taxes (E1106393)

Roseland

8/TX

6/29

The Best Federal Tax Update Course by Surgent McCoy (E1106051)

Roseland

8/TX

6/29

Loscalzo's Current Practice Issues and Solutions in Audits of Employee Benefit Plans (E1106191)

Iselin

8/AA

6/30

Loscalzo's Not-for-Profit Industry Update and Major Accounting and Disclosure Issues (E1106201)

Iselin

8/AA

7/7-8

How to Conduct a Review Under the AICPA Practice-Monitoring Programs (E1107101)

Roseland

16/AA

7/8

Payroll Taxes, Benefits and 1099 Reporting: Everything You Need to Know (E1107113)

Roseland

8/TX

7/11-12

Loscalzo's A&A Staff Level – Entry Level Staff (E1107061)

Roseland

16/AA

7/11

International Versus U.S. Accounting: What in the World Is the Difference? (E1107133)

Iselin

8/AA

7/12

Identifying Fraudulent Financial Transactions (E1107243)

Iselin

8/AA

7/13

Applying the PCAOB's Risk Assessment Standards to Smaller Public Entities (E1107261)

Roseland

8/AA

7/14

Professional Ethics for New Jersey CPAs and Frequently Asked Questions in GAAP Financial Statements (E1107091)

Iselin

4/AA 4/PE

7/14

Governmental Accounting and Auditing Update (E1107151)

Roseland

8/AA

7/14

Young Professionals Networking Night at The Famished Frog (E1107270)

Morristown

N/A

7/15

Accounting and Reporting Practices of Not-for-Profit Organizations (E1107161)

Roseland

8/AA

Upcoming Chapter Events Date

Chapter

Event/Code

Location

CPE Credit

5/19

Southwest Jersey

Accounting and Auditing Update (E1105049)

Berlin

4/AA

5/19

Middlesex/ Somerset

Special Needs Planning (E1105089)

Somerset

2/CS

5/19

Bergen

Awards Dinner and Officers Recognition Night (E1105139)

Ramsey

1/PD

5/24

Passaic County

Social Networking/Technology Update (E1105519)

Paterson

4/CS

5/25

Southwest Jersey

New Jersey Law and Ethics (E1105069)

Voorhees

4/PE

6/2

Monmouth/ Ocean

New! Accounting and Auditing Symposium (E1106029)

Neptune

4/AA

6/6

Bergen

Bergen Chapter Annual Golf Outing (E1106509)

Franklin Lakes

N/A

6/7

Monmouth/ Ocean

New Jersey Law and Ethics (E1106409)

Neptune

4/PE

6/17

Essex

Tax Law 2011 – A Guide for Entering the Maze (E1106039)

East Hanover

4/TX

6/24

Essex

New Jersey Law and Ethics (E1106479)

East Hanover

4/PE

KEY AA – Accounting & Auditing MC – Multiple Categories PE – Professional Ethics

CS – Consulting Services MT – Management SK – Specialized Knowledge www.njscpa.org/catalog NEW JERSEY CPA • May • June 2011

37

EC – Economics PD – Personal Development TX – Taxation

SOCIETY

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Get Involved The Adventures of Henrietta Fuchs

At the age of 18, Henrietta Fuchs, CPA, left her family and country of Hungary to come to New Jersey where she eventually became a CPA. “My uncle passed away, so my aunt asked me to come here to live with her,” Fuchs explains. “It was great for both of us. She had company, and I had the opportunity to go to college and learn English by talking with my schoolmates.”

Fuchs received her associate’s degree from Bergen Community College and then transferred to Fairleigh Dickinson University to remain close to her aunt. It only took one class for Fuchs to decide on accounting as a major. “I had a wonderful professor, an inspiration with whom I still keep in touch, for my financial accounting class,” says Fuchs. “She started in public, moved to private and finally went into teaching. I saw that the accounting field is very stable, and I liked that I could work in different sectors.”

“Fairleigh has a good accounting program, and I got an academic scholarship for my junior and senior years,” Fuchs shares. “Its 150-credit program enabled me to get my master’s degree in just one semester after finishing my undergraduate classes.”

Henrietta Fuchs, CPA, and a friend.

Fuchs has been with J.H. Cohn since 2003 where, as an audit manager and member of its Food & Beverage Industry Practice Group, she works on audits of publicly traded and private companies and employee benefit plans. The thing Fuchs enjoys most about her job is meeting people. “Some of my clients are fantastic entrepreneurs.

They’re really creative risk takers,” adds Fuchs. “I also get to travel by auditing companies in Russia and India and working in London and at our San Diego office. I love meeting people with different backgrounds and interests because I can learn a lot from them.” Another thing that’s good about her job? Her husband, Rich, works there, too.

Cohn supports her involvement with the New Jersey Society of CPAs. “My firm looks for people who are involved in activities outside

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SOCIETY

pages The Financial Literacy Committee Reaches Out to Women

of work, help our community and represent the firm in a positive way,” Fuchs says. She became actively involved two years ago by serving on the Society’s Young CPAs Council and participating in the Pay It Forward and Junior Achievement programs. She’s also a mentor to an NJSCPA high school scholarship recipient. “As a past scholarship recipient, I spoke at the Society’s 2010 Scholarship Ceremony, which celebrated the 50-year anniversary of the scholarship fund,” she notes.

Fuchs knows her NJSCPA involvement is helping her stand out from other managers.

Something else that makes Fuchs stand out may be her taste in exotic food. “I’ve eaten frog legs, sweetbreads, cow’s brain and tongue … and liked it,” exclaims Fuchs. She also dreams of visiting the pyramids in Egypt. “I always find something to do and can’t relax until everything is done! I really admire people who can put cleaning the house and other chores aside and just enjoy a beautiful day.”

Relaxing may take some time since she and her husband have embarked on a new adventure as parents of a baby girl, Emma Dawn, born in September. “One of my favorite things, after the endless hugs and kisses, is seeing the world through my daughter’s eyes. She loves everything, including exploring. The simplest things fascinate her,” notes Fuchs. It sounds like there are many adventures ahead for this CPA.

By Jean I. Abbott, CPA, Richard Stockton College of New Jersey

On a cold January day, 135 women – along with a few men – gathered on the snowy campus of Caldwell College to learn how to take control of their finances. It was MoneyMattersNJ’s sixth annual Do-It-Herself Conference sponsored by the NJSCPA. Why a conference for women? Women have unique financial issues.

They live, on average, eight years longer than men; 75 percent of women are either widowed or divorced during their lives; and women’s retirement income from pensions and Social Security is typically less than that of men.

The conference offered workshops on money management, investing, budgeting, estate planning, financial recordkeeping, as well as networking and exhibits. The presenters were mostly NJSCPA members who volunteered their time and expertise. Kenneth B. Shapiro, CPA, a panelist for the “Money Management for Lifecycles Workshop,” volunteers for the Do-It-Herself Conference every year.

“I was impressed by the number of repeat attendees and the growth of the conference,” Shapiro said. “The participants came with diverse backgrounds and experiences, and their questions opened the door for excellent dialogue and valuable discussion.” Attendees shared financial

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changes resulting from marriage and divorce with speakers who were able to suggest next steps. Financial experts also provided insight for those starting their careers, as well as those preparing for retirement. “I was very pleased with the information I received,” said one participant who was attending for the second year. “I’m here building on what I learned at my first conference, learning from experts and making plans for my future.”

Julie Bond Genovese, author of Nothing Short of Joy, started the day with an inspiring talk that offered hope to those with challenges that keep them confined to a life of struggle, disappointment and despair.

Genovese, born a dwarf with degenerative arthritis, considered herself a freak, unworthy of a rich, full life. After enduring degrading lies and humiliations, she journeyed toward joy and emerged confident and free.

The conference is one of many NJSCPA financial literacy initiatives supported by the Financial Literacy Committee. Through in-person seminars, such as the Do-It-Herself event, webcasts, articles and other programs, the committee is taking the lead in educating New Jersey residents about sound personal finance.

Moneymattersnj.com provides the public with educational information, including podcasts on topics ranging from teaching children about money to Social Security. This spring, the Financial Literacy Committee and its volunteers will partner with Junior Achievement to bring financial literacy education to young people.

For more information about the committee, visit njscpa.org/ committees or contact its chair, Hope Player, at hopeplayer@ thearcadiangroupcpa.com or 201-944-8500. To become a financial literacy volunteer, complete your volunteer profile at njscpa.org/getinvolved.

Jean I. Abbott, CPA, is an assistant professor at Richard Stockton College of New Jersey and a manager at Giuliano Miller and Company.

She has been a member of the Financial Literacy Committee since 2008. Contact her at jean.abbott@stockton.edu.

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Volunteer opportunities are available throughout the year. Here are a few activities that need your support now. Let us know how you’d like to be involved at njscpa.org/getinvolved.

Support The Scholars Institute and Future CPAs – Network with NJSCPA volunteers, leaders, educators and up to 100 of New Jersey’s best and brightest college students at the Scholars Institute Networking Night on Thursday, June 2, at Rutgers New Brunswick from 6:30 to 8:30pm. Become a mentor and you can help students choose a CPA career path. Contact Mindy Ripp at mripp@njscpa.org or 973-226-4494 x241 to register, or complete the volunteer profile to become a mentor at njscpa.org/getinvolved.

Financial Literacy Webinar Presenters Needed – NJSCPA members are needed to present hour-long webinars on varied topics as part of the MoneyMattersNJ financial literacy program. Give back to the community and spotlight your firm. Contact Jennifer O’Leary at joleary@njscpa.org or 973-226-4494 x251.

Jump into the E-YoungCPA Writer’s Pool – The E-YoungCPA Writers Pool provides members under age 40 with a way to give input to and provide content for E-YoungCPA, the Society’s monthly email newsletter for young CPAs. It offers flexible contribution levels, such as taking five minutes to recommend an article topic and potential sources, to three to four hours spent writing an article. Contact Carolyn Hook at chook@ njscpa.org or 973-226-4494 x221.

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Page 1

SOCIETY

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NJSCPA Membership: The Choice Is Yours The New Jersey Society of CPAs has many options for the busy or aspiring CPA. Options that further your career, your business and the profession are available for you to mix and match to make the most of your membership. You can choose to: • Improve your technical skills and knowledge through quality continuing professional education at members-only pricing.

• Meet valuable new contacts and friends through in-person meetings or on NJSCPA Connect.

• Keep money in your pocket through discounts on everyday business and leisure expenses, such as office supplies, travel, insurance, and sports and entertainment tickets.

• Stay in the know on current accounting trends and resources by reading New Jersey CPA, E-NEWS and other Society publications.

• Stand with more than 16,000 other local accounting professionals who are represented in Trenton on critical issues that affect you and your colleagues.

• Give back and volunteer to write articles, moderate seminars, mentor future CPAs and represent the accounting profession in your community.

• Choose your reward. When you renew

by June 30, you will be entered to win one of five gifts, including an Amazon Kindle or a $150 gift card from Ticketmaster, Macy’s, Visa or the Marriott. Ten winners will be chosen at random.

Choose to renew at njscpa.org/renew.

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Advertisers Index NJ Accounting, Business & Technology Show Advertisers

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Accounting Practice Sales www.accountingpracticesales.com

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ADP www.adp.com

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Argent Professional/CAMICO www.insuranceagent.com

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Askin, Weber & Reed, Inc. www.awrins.com

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516

CPA2Biz www.cpa2biz.com

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Landy Insurance Agency www.landy.com

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Audimation Services, Inc. www.audimation.com

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Bank Leumi USA www.leumiusa.com

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Capital One Bank www.capitalonebank.com

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Community Foundation of New Jersey 14 www.cfnj.org CPA Mutual www.cpamutual.com

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CPE Link www.cpelink.com

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High Point Auto Insurance www.njscpaquote.com

40

Lowenstein Sandler PC www.lowenstein.com/businessdivorce

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Medallion Business Credit www.medallion.com

51

NVE Bank www.nvebank.com

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Pay My Taxes www.paymytaxes.com

26

Personable www.personable.com

5

PNC Bank www.pnc.com

9

QualCare, Inc. www.qualcareinc.com

23

Rutgers Business School www.business.rutgers.edu/accounting

48

Rutgers Business School – Camden http://pmac.rutgers.edu

21

Sterling National Bank www.sterling4biz.com

49

The Provident Bank www.providentnj.com

42

Thomas Edison State College www.tesc.edu

13

Valley National Bank www.valleynationalbank.com

39

Recognizing the significant need for long‐term care planning among our members, the New Jersey Society of Certified Public Accountants is pleased to announce a comprehensive new Long Term Care Insurance Program. This program offers a portfolio of comprehensive plans from multiple highly rated insurance carriers.

Through a partnership with Askin, Weber and Reed and Long‐Term Care Resources, New Jersey Society of Certified Public Accountants members now have a national network of long‐term care specialists available to explain the costs and benefits of this vital program.

More importantly, we have used the buying power of our association to obtain special discounted rates.

While we know this program is very valuable, insurance is not the right answer for everyone.

However, information is your best weapon in the fight against the high cost of long‐term care and to determine if Long Term Care Insurance is right for you. Advanced planning is always the best approach. To request more information, call today 800‐616‐8759.

Connect with us at: www.awrins.com

NEW JERSEY CPA • May • June 2011

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SOCIETY

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New Jersey State Board of Accountancy Report Comments Don’t Impact Sunset Regulations Approval Newark (February 17) Legislative Matters

The board’s regulatory analyst briefed the board on a comment letter received regarding the sunset regulations. It expressed concern on the following: • Wording regarding security and exam cheating.

• Wording regarding standard setters: “successors” versus “alternate.”

• Clarify disclosure statements and signage.

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• THE CPA ADVANTAGE PROGRAM, WHICH PROVIDES PROFESSIONAL LIABILITY INSURANCE TO TRADITIONAL ACCOUNTING FIRMS OF ALL SIZES. • OUR ABC PLAN, DESIGNED SPECIFICALLY FOR FULL OR PART-TIME TAX PROFESSIONALS AND BOOKKEEPERS.

• Client records and recouping of associated fees.

• Mobility rules and residency wording.

• CPE for contributing to publications.

• Limitations on CPE for courses taught by college professors.

The board approved the sunset regulations without the suggested changes received during the comment period.

Miscellaneous

The National Association of State Boards of Accountancy requested reports from board

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44

members on test center site inspections in 2010. The board has not done so, but plans to.

Committees

Ethics – The committee approved a live course from the New Jersey State Auditor.

An amendment to the New Jersey Society of CPAs program was approved.

Public

NJSCPA Executive Director Ralph Albert Thomas informed the board about the Society’s Professional Development Conference in San Antonio November 9-12.

Thomas mentioned the Society’s progress with the New Jersey Tax Advisory Council and the good spirit of cooperation between the Society and the state’s new tax director.

The Society held a series of managing partner meetings and discovered that they are concerned about the access to new staff and the “re-commoditization” of attestation services due to the bidding process.

The Society will reach out to the Financial Accounting Foundation to suggest it implement the recommendations of a blue ribbon panel regarding generally accepted accounting principles with exceptions for private firms and creating a separate governing body for such firms.

Thomas inquired if licensees who were deficient in the New Jersey Law and Ethics course last triennial would need to take it twice this triennial. The board responded they did not, provided they take the course within 90 days of notification. Thomas also asked about what rule licensees had to follow if they were deficient in CPE and wanted to make it up via self-study. The board will confirm for the next meeting.

CLASSIFIEDS Mergers/Acquisitions Practices for sale: West Atlantic County tax and accounting practice, gross $215K; Atlantic City tax franchise, gross $120K; West Orange EA practice, gross $90K; Vineland tax practice, gross $231K; SE Monroe County CPA practice, gross $387K; central Jersey CPA firm, gross $1,915K. For more information, please call Bradley Holmes at 800-397-0249 or visit www.accountingpracticesales.com.

The Curchin Group, LLC, a central NJ, Monmouth County firm is seeking to merge-in near-retirement sole practitioners and small firms needing succession planning. Other individuals seeking growth and expansion are welcome to inquire. Initial practice continuation also an option. Reply in confidence to Peter Pfister, CPA, at 732-747-0500 or ppfister@ curchin.com.

Essex/Morris sole practitioner seeks near-term retirement and sale of $600K-plus diversified practice. When responding, please include brief description of your firm; cpapractice2011@gmail.com.

New Jersey – CPA firm wishes to acquire or merge with progressive, small to mid-sized firms. File 0701 Bergen County CPA firm and investment advisor seeks transaction inclusive of RIA firm; sale or merger. Contact George Allen at 201-262-7878 or gbrade@aol.com.

Goldstein Lieberman & Company LLC, one of the region’s fastest growing CPA firms, wants to expand its practice and is seeking merger/ acquisition opportunities in northern NJ and the entire Hudson Valley region, including Westchester. We are looking for firms ranging in size from $300,000 to $5,000,000. To confidentially discuss how our firms may benefit from one another, please contact Phillip Goldstein, CPA, at philg@glcpas.com or 800-839-5767.

Leading suburban Essex County CPA firm with a quality-oriented work environment has a merge opportunity for sole practitioners or a small firm needing succession planning. We work with a diversified client base and have the benefit of a dedicated support staff. In addition, we offer support services in the areas of technology, consulting, litigation and financial planning. Reply to ljcpa@ljcpa.com.

Want to sell or merge your accounting practice? Accounting Practice Sales has qualified buyers waiting and financing available to sell your practice quickly and get you the best deal possible. For information regarding our risk-free and confidential services, call Bradley Holmes at 800-397-0249. Buyers see listings and register for free email notifications at www.accountingpracticesales.com.

Mironov, Sloan & Parziale LLC, a quality niche-based CPA firm in central NJ is looking to expand its practice. We are seeking merger/ acquisition candidates ranging in size from $500,000 to $5,000,000. Reply in confidence to Don Hilker at 732-572-3900 or dhilker@ mspcpa.net.

Central NJ, regional CPA firm with an outstanding environment is looking to merge-in sole practitioners, small firms, practices needing succession planning or growth-oriented individuals seeking a synergistic platform. Reply in confidence: eguttenplan@wgcpas.com.

Growing CPA firm with a first-class marketing culture in central NJ is looking to expand its practice. An ideal merge-in candidate is an accountant/sole practitioner/small firm with an established niche focus and strong business development skills or a practice in need of a succession plan. Reply in confidence to dcowan@cowangunteski.com.

Established northern NJ CPA firm seeking to purchase small practice or accounts. Reply in confidence to pmanetta@mpcpas.com.

Pro Bono Monroe Special Sports, Monroe Township, a nonprofit organization that enables special needs individuals to participate in sports, seeks an accountant to review its books biannually and help file an e-card with the IRS. Contact Su Reiser at 732-792-7827 or monroespecialsports@gmail.com.

Professional Services CPA and CFO Services is offering complete services (payroll, bookkeeping, accounting, tax services, CFO services and CPA services) in the south Jersey area starting February 1, 2011. We also offer other CPAs a turnkey virtual office to process your returns through us. We also offer per diem services. See us at www.cpaandcfo.biz or call 866-246-2031.

Immigration lawyers. We provide temporary visas (H-1Bs, L-1A, Investor, etc.) and green cards through employment/family to the U.S. and Canada – working with CPAs. Call 201-759-4333; www.visaserve.com.

Classified Advertising Replies to ads with file numbers should be sent to: File______________________ New Jersey CPA Classifieds 425 Eagle Rock Avenue Suite 100 Roseland, NJ 07068-1723 To see additional classified listings or to place an ad, visit www.njscpa.org/classifieds.

July/August Coming Attractions Emerging Leaders

Magazine of the

New Jersey Society of Certified Public Accountants

J u l y • A u g u s t 2 0 1 1

30 under 30

n Your GPS to Success n Generation What? n How Higher Education Is Preparing Emerging Leaders n Profiles in Emerging Leaders

NEW JERSEY CPA • May • June 2011

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STUDENT

outlook

NJSCPA Celebrates 51st Awards Ceremony T CPA Exam Today! he New Jersey Society of CPAs Scholarship Fund awarded more than $365,000 to 80-plus New Jersey high school and college students at the 51st annual NJSCPA Scholarship Awards Ceremony in April. We applaud our members, chapters and firms for supporting the Society’s efforts in securing the future of the CPA profession. Congratulations to these scholarship recipients:

In Name of Awards Bowman & Company LLP (In Memory of Lisa A. Donahue) (Patron Level) Emily Johnson ($4,000) Rutgers University – Camden Eisner Amper LLP (Partner Level) Karen Nici ($4,000) The College of New Jersey Lenore and Frederick Horn (In Memory Of) William Happe ($4,000) Brian Wegman ($4,000) Fairleigh Dickinson University J.H. Cohn LLP (Benefactor Level) Rahnuma Ahmed ($4,000) Rutgers University – New Brunswick Megan Ho ($4,000) The College of New Jersey John Lee (In Honor Of) Timothy McMillan ($4,000) Rider University

National Basketball Association (Patron Level) Yodelfri Ruiz ($4,000) Rutgers University – Newark

WeiserMazars LLP (Patron Level) Karen Cianci ($4,000) Rutgers University – Newark

Rothstein, Kass & Company, P.C. (Benefactor Level) Neda Bavrlic ($4,000) Montclair State University Amanda Karpa ($4,000) Seton Hall University

Wiss & Company, LLP (Patron Level) Erica Lande ($4,000) Montclair State University WithumSmith+Brown (Partner Level) James Noonan ($4,000) Monmouth University

Smolin, Lupin & Co., P.A. (Partner Level) Johanny Caraballo ($4,000) Caldwell College

Z. Thaddeus Zawacki (In Memory Of) Brian Hughes ($4,000) Seton Hall University

Paul Stahlin, CPA (In Honor of) Given by the NJSCPA Council of Past Presidents Drew Heimlich ($4,000) Montclair State University

NJSCPA College Awards Fairleigh Dickinson University Victoria Mariconda ($4,000) Beth Meinhold ($4,000)

Untracht Early LLC (Patron Level) Shayna Rosen ($4,000) Rutgers University – Newark

We Go To Work For You.

Georgian Court University Christopher Deal ($4,000) Lanette Werzinger ($4,000)

Go with the biggest in the industry. We are North America’s leader in marketing accounting and tax practices because we understand the value of your firm, know how to market it and have hundreds of buyers in Pennsylvania who want a practice. Our biggest concern is you. Our wealth of experience culminates to make sure your comfort level is met, your questions are answered and everything is being done to sell your firm.

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NEW JERSEY CPA • May • June 2011

46

Kean University Tiffani Darden ($4,000) Carmen Ulerio ($4,000)

Seton Hall University Ryan Handel ($4,000) Alysha McRae ($4,000)

PricewaterhouseCoopers LLP Kaitlin Sinisi ($8,500) Cedar Grove High School

Monmouth University Scott Yontef ($4,000)

The College of New Jersey Melissa Dolly ($4,000) James Omerza ($4,000) Elizabeth Schiavi ($4,000)

NJSCPA High School Awards Amounts range from $6,500 to $7,500 (Awarded over four years)

William Paterson University Omar Perez ($4,000)

Chandler Antczak South Brunswick High School

Montclair State University Allison D’Elia ($4,000) Mischa Harte ($4,000) Ruhi Shah ($4,000) New Jersey City University Xiomara Jordan ($4,000) Ramapo College of New Jersey Takanari Tanahashi ($4,000) Alyssa Tummillo ($4,000) Richard Stockton College of New Jersey Cherie Enderlin ($4,000) Andrew Hoffman ($4,000) Michelle Palmisano ($4,000) Rider University Alyssa Bertucci ($4,000) Puneet Joshi ($4,000) Rowan University Daniel Errera ($4,000) Gary Fare ($4,000) Rutgers University – Camden Krystsina Haivaronskaya ($4,000) Alona Karpuzi ($4,000) Rutgers University – Newark Mercci Gonzalez ($4,000) Nidhi Patel ($4,000) Sara Saif ($4,000) Rutgers University – New Brunswick Pedro Segura-Contreras ($4,000) Magdalena Slusarz ($4,000) Mark Washko ($4,000) Saint Peter’s College Jillian Coe ($4,000)

Catharine Bello Minority Scholarships NJSCPA/Northern New Jersey-National Mother Seton Regional High School Association of Black Accountants Alexa DellCioppia To be determined Whippany Park High School Chapter College Awards Arev Dinkjian Atlantic/Cape May Chapter Fort Lee High School Richard Stockton College Anna Artemenko ($1,500) Christie Dougherty Simona Dabriskyte ($1,500) West Windsor Plainsboro Jason Gordon ($1,500) High School North Shannon Howell ($1,500) Tiffany Kowalcyk ($1,000) Rachel Galbreath Irina Lewis ($2,000) Clearview Regional High School Gregory Novakowski ($1,500) Danielle Peterson ($2,000) Scott Grossnickle Watchung Hills Regional High School Mercer Chapter Mercer County Community College Jeremy Kaye Tracye Coleman ($2,500) North Brunswick Township High School Purvi Dogra ($1,500) Chia-Yen Hsu ($2,500) Sam Maurer-Hollaender Ashley Robinson ($1,500) Livingston High School Albert Smith ($2,500) Scholarships Funded by the Big Four Accounting Firms (Awarded over four years) Deloitte Joseph Hark ($8,500) Pope John XXIII Regional High School Ernst & Young LLP Mita Joshi ($8,500) Monroe Township High School KPMG LLP Kunal Malkan ($8,500) Paramus High School NEW JERSEY CPA • May • June 2011

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Christina Nitzsche North Warren Regional High School Meghan O’Brien Pequannock Township High School Mehak Raza Sayreville War Memorial High School Anuj Talati Sayreville War Memorial High School Jenna Wilson Lenape Valley Regional High School

LEGISLATIVE

views

Governor’s Budget Proposal Takes a Twist B y Jeffre y T. Kaszerman , NJ SC PA Government R elations D irector

A

fter vetoing several New Jersey Society of CPAs-supported tax reform bills passed by the Democratically controlled Legislature in January, Governor Chris Christie released a budget proposal in February that contains several of the same tax reform items he vetoed. These include establishing a single sales factor allocation formula for the corporate business tax (CBT) and allowing businesses that pay their taxes through the personal income tax to get many of the same benefits as businesses that pay the CBT.

Christie’s proposed $29.4 billion state budget for fiscal year 2012 that starts July 1 calls for spending 2.6 percent less than the previous year and reduces reliance on non-recurring revenue from 6 percent to 2 percent. In addition to the single sales factor reform and relief for businesses that pay their taxes through the personal income tax, the proposed budget also calls for reducing the minimum tax on S corporations by 25 percent, exempting from sales tax the installation and support of electronically delivered software for business use and raising the estate tax exemption from

$675,000 to $1 million.

While business groups were supportive of the governor’s proposed budget, government employee unions and many Democrats in the Legislature were highly critical and vowed to force changes to the proposal as it winds its way through the spring budget process.

The governor’s single sales factor proposal is very similar to the bill he vetoed. It would be phased in over three years and would eliminate property and payroll as factors and would base the CBT solely on sales. Similarly, his relief for small businesses, such

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as S corporations, LLCs, LLPs, sole proprietorships and partnerships, is similar to the bill he vetoed. It allows those businesses to carry forward net operating losses for 20 years. This provision is phased in over a five-year period. The plan also phases in a change that allows businesses to offset losses from one category of income to another.

Christie’s proposal includes a unique provision where the Homestead Benefit Credit (formerly homestead rebate) is doubled from last year, but only if the Legislature agrees to significant pension and health care reform changes for public sector employees.

Senior and disabled homeowners with incomes up to $150,000 would receive benefits averaging $540, and non-senior homeowners with incomes up to $75,000 would receive benefits averaging $404.

The governor’s budget also includes requiring public employees to pay 30 percent of their health benefit costs by 2014. In addition, state aid to

municipalities is maintained at last year’s level of $1.4 billion, and school aid is increased by $250 million over last year’s allocation.

The budget submitted by the governor has been sent to the Legislature and it will be subjected to intense review and committee hearings over the next few months. With all 120 seats in the Legislature up for election in November, the budget is likely to be a source of great contention between the Republican governor and the Democratically controlled Legislature. However, state law requires that a balanced budget be passed by June 30. The proposed budget also includes: • Funding for the Technology Business Tax Certificate Transfer Program is increased from $30 million to $60 million. This program enables unprofitable technology and biotechnology companies to sell their unused net operating losses and research and development credits.

• The Research and Development

Credit to offset corporate tax liability is increased from 50 percent to 100 percent.

• The Transitional Energy Facility Assessment is phased out over three years, beginning in 2012.

• The Business Employment Incentive Program, which provides grants for new job creation, is funded at last year’s level of $175 million.

• Businesses in Urban Enterprise Zones will continue to collect only half the state sales tax – 3.5 percent – from customers, but the towns with UEZs will have to return the funds they collect to the state instead of keeping the money for use within their zones.

• Funding for higher education is preserved at last year’s level, and funding for student financial aid is increased by $20 million.

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To see a summary of the proposed budget, visit state.nj.us/governor/news/ news/552011/pdf/20110222_fy2012. pdf.

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This CPA Is for the Birds

By David Plaskow, NJSCPA Publications Editor

W

hen your father helped create the New Jersey Division of Taxation’s Sales Tax Bureau, there’s a good chance accounting is in your future. And that’s exactly what happened to Ivan Kossak, CPA. “I saw how much my dad loved accounting, and I seemed to have an aptitude for it,” says Kossak.

Because he had a job waiting for him at J.H. Cohn after receiving an undergraduate degree in accounting from the University of Massachusetts at Amherst, Kossak was able to backpack though Europe in the summer of 1982.

“I remember sleeping on a hillside in Greece and being awoken by someone riding a donkey that had a bell around its neck,” recalls Kossak.

Not long after graduating, Kossak received the CPA certificate. “It was understood and a logical step in my career path,” notes Kossak. “My classes in college were geared toward taking the CPA Exam.”

After several years in Cohn’s audit department, Kossak worked as a controller for several firms, including a real estate developer and a printer.

“I didn’t feel fulfilled in compliance; I liked working internally at a company.

I feel you can make much more of a difference,” says Kossak. “I helped save one company from bankruptcy by adjusting its pricing model and using excess plant capacity.”

In 1994, Kossak started his own practice, specializing in controller and management functions. He also has several nonprofit clients. It was around this time that Kossak joined the New Jersey Society of CPAs. “Professional associations are very validating, especially for sole practitioners,” explains Kossak. “You can brainstorm and share experiences with fellow

practitioners. I also like the support network. For example, I was taking on a client where I would be issuing management-only financial statements.

I was able to check with the Society to determine if I was subject to peer review.”

In his spare time, Kossak is the board president of the Hackensack Riverkeeper, an environmental organization; a Civil War enthusiast; and an amateur paleontologist. He talks of a dinosaur dig he participated in in Colorado where he found the backbone of a Camarasaur. But it’s another outdoorsy pursuit that really gives Kossak goose bumps, so to speak: bird watching.

“It started with a hike in the Ramapo Mountains with my ex-wife,” says Kossak. “She pointed out a BlackThroated Green Warbler (Dendroica virens). It made an impression on me that the woods were much more alive than I thought.” Kossak spotted another bird on a solo hike, and he looked it up in a field guide. It turned out to be an Eastern Towhee (Pipilo erythrophthalmus) and from there he was hooked.

Kossak has been known to get up at 2:30 in the morning to take a trip to Martha’s Vineyard because an Internet posting announced that a Red-Footed Falcon (Falco vespertinus) was spotted there. “That was its only sighting in the Western Hemisphere,” exclaims Kossak.

“The Red-Footed Falcon is generally only found in Europe and Africa. It was quite a thrill.”

While he’s gone birding in California, NEW JERSEY CPA • May • June 2011

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Arizona, Texas, Michigan and elsewhere, Kossak points out that you can have an amazing birding experience right here in the Garden State: “Another great sighting was a Reeve (Philomachus pugnax) in Wayne.”

Of the approximately 1,000 bird species in North America, Kossak has seen 524. He keeps what birders call a “life list.” Is there one bird he would very much like to add to his life list – his white whale, as it were? “I’ve chased the Spruce Grouse (Falcipennis canadensis) through five states and have yet to see it,” says Kossak. “It’s a very secretive bird and hard to find. Of course, there’s also an element of luck to it.”

What does Kossak get from spending time with his fine feathered friends?

“It’s great physical and mental exercise, a sense of adventure,” adds Kossak.

“You build a collection, but don’t need room in your house to store it. And you get the thrill of the hunt without the killing. Plus, I’ve seen a lot of beautiful places and connected with nature.”

And birding’s similarities to accounting? “Both activities have the same element of recordkeeping,” says Kossak. “And both birders and accountants seem to have organized minds.”

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