Co Sp nv eci Iss en al ue tio n Magazine of the
New Jersey Society of Certified Public Accountants
Technology Useful Tablet Apps for CPAs The Evolution of Employee Tech Policies E-Slander and Responding to Online Attacks Using Technology Metrics at Your Firm
May â€˘ June 2012
May • June 2012
Ralph Albert Thomas, CGMA Executive Director firstname.lastname@example.org
Ellen C. McSherry, CGMA Associate Executive Director email@example.com
Useful Tablet Apps for CPAs Now essentially ubiquitous, discover applications that can turn your device into a mobile office.
Don Meyer Director, Communications & Marketing firstname.lastname@example.org
David Plaskow Managing Editor email@example.com
The Evolution of Employee Tech Policies See the steps to protect your organization as an increasing number of employees are using evermore devices to access company information.
Jeanette L. Miller Editorial Assistant firstname.lastname@example.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 Anthony F. Marone, CPA William C. McNamara, CPA Marc D. Mintz, CPA John F. Raspante, CPA Joseph F. Scutellaro, CPA Margaret Van Brunt, CPA
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 njscpa.org
E-Slander and Responding to Online Attacks Learn the steps you can take to proactively mitigate e-slander and what you should do if you are attacked online. Using Technology Metrics at Your Firm Look at the various technology cost components specific to your firm to see how you can maximize tech ROI.
4 Close Up Ten Questions for RFK Jr. 6 20
Best Practices Using Workflow Automation to Improve Productivity
Financial Planning The Full Disclosure on Compliance and Disclosure Issues for Financial Advisors
A&A Buzz Auditing Software That’s the CAAT’s Pajamas
23 Forensic File Forensic Analytics: Methods and Techniques for Forensic Accounting Investigations 24 Industry Insights Succession Planning for CIOs 2 5 Small/Sole Practitioner Wi-Fi Versus 4G
2 6 Tax Talk New Jersey and Federal R&D Credit Studies 28 Tech Center Business Intelligence: The Software Dilemma 42 Student Outlook NJSCPA Celebrates 52nd Awards Ceremony 44 Legislative Views The Squeaky Wheel Does Get the Grease 46 Member Profile By Any Means Necessary Society Pages 2012/13 Executive Committee, 30 2012-15 Board of Trustees, 32 CPE Offerings and Events, 34 Get Involved, 36 Member Benefits, 38 NJ State Board of Accountancy Report, 39 Classifieds, 40
The Warren Group Design / Production / Advertising thewarrengroup.com email@example.com
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. 33 Copyright © 2012 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.
o ey x p rs E er Je n & ak e ew i o p N ent e S v ot on n C Key
Ten Questions for RFK Jr. N
JSCPA Convention & Expo keynote speaker Robert F. Kennedy Jr. is a passionate advocate for the environment. He serves as senior attorney for the Natural Resources Defense Council. New Jersey CPA caught up with Mr. Kennedy in advance of his session: What is the National Resources Defense Council? It’s the top environmental group in the U.S., made up of attorneys, scientists, economists and other professionals, dedicated to protecting the environmental infrastructure of the nation. Why speak to a group of CPAs? What’s the link between them and the environment? Eco, the prefix of ecology and economy, is Greek for “home.” It’s important to understand how we generate and deploy our resources. Good environmental policy is good economic policy; environmental damage is deficit spending for the future. And I can’t think of a better group to speak to this about than CPAs. The title of your session is “A Contract with Our Future.” What does that really mean? We heavily subsidize the current form of energy in this country, fossil fuels. This not only suspends the free market economy, fossil fuels create a variety of hidden costs, such as pollution. Today and going forward, there is enormous potential for alternative energy, such as wind, solar and electric cars, that makes good business sense, which is something that accountants can certainly understand. How would you rate the current administration on environmental policy? Compared to the previous administration, it gets an A+; compared to where I believe it should be, a B-. Congress and the administration could do more to build up the power grid and create rational marketplace incentives by giving incentives for good environmental behavior and penalizing wasteful behavior. What are your environmental fears for a potential Republican presidency? That environmental rules get suspended and we go back to the ways of the Bush presidency: where we have oil wars rather than
innovation, and people get tax breaks for owning vehicles like Hummers rather than electric cars. Why do you prefer being an environmental advocate from outside the political system rather than from the inside? I’ve avoided public office for a variety of reasons. I think my kids would like me to run. But I enjoy trying to make things work from my position as a businessperson, advocate and entrepreneur. I read that a Kennedy has jumped in the political race for Barney Frank’s seat. How do you like your nephew Joe’s chances? The family’s very excited, and I think he’ll win. What’s your position on nuclear power, especially in light of Japan’s recent tragedy? If you can make it safe and economic, I’m all for it. Unfortunately, no one has completely demonstrated that you can achieve both through nuclear power. It’s estimated that nearly one million people died as a result of Chernobyl. Why haven’t wind, solar, electric cars and other alternative energy sources reached a critical mass yet, and what will it take to do so? In a new disruptive industry, one of the milestones you look at is the year when more disruptive products were produced versus the incumbent competitors. We’ve built more wind and solar facilities, along with hiring more corresponding workers, in the last year than the incumbent energy sources combined. These market forces can happen fast. Three years ago, electric cars were a joke. This year, all of the car companies have trumpeted their versions of one. What’s the one thing each of us can do right now to have the largest short-term and long-term impacts on the environment? Get involved in the political process, and make your representatives understand that the transition to a new energy economy is imperative to staying competitive with the Chinese who are pouring money into energy alternatives. It’s in our nation’s best interest, both from an economic and a national security perspective, not to send $700 billion abroad every year on fossil fuels.
NEW JERSEY CPA • MAY • JUNE 2012
2011/12 Board of Trustees EXECUTIVE COMMITTEE President Carole A. Hedinger, CPA President-Elect Thomas F. Roche III, CPA Secretary Lloyd F. George, CPA Treasurer Walter J. Brasch, CPA Immediate Past President Robert S. Marrone, CPA Executive Director Ralph Albert Thomas, CGMA TRUSTEES Lewis D. Bivona, CPA Jose E. Bombino, CPA Susan Burke, CPA Rebecca B. Fitzhugh, CPA Linda Gibson, CPA Edward I. Guttenplan, CPA Karl A. Halteman, CPA Maryann Holloway, CPA Robert Nanfro, CPA Kenneth Pogrob, CPA Jody Rorick, CPA Mary E. Zago, CPA
In the March/April issue, there were several inaccuracies and omissions on the chart of “Accounting Degrees in New Jersey” on page 35. See the updated chart at njscpa. org/newjerseycpa. New Jersey CPA apologizes for any inconvenience.
If you did not get a W-2, see instructions.
Other gains or (losses). Attach Form 4797 .
Pensions and annuities Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E
Farm income or (loss). Attach Schedule F .
19 20a 21 22
Unemployment compensation . Social security benefits 20a
23 32 24 33 34 25 35 26 36 27 37
Educator expenses . . . . . . . . . . 23 IRA deduction . . . . . . . . . . . . . 32 Certain business expenses of reservists, performing artists, and Student loan interest deduction . . . . . . . . 33 fee-basis government officials. Attach Form 2106 or 2106-EZ 24 Tuition and fees. Attach Form 8917 . . . . . . . 34 Health savings account deduction. Attach Form 8889 . 25 Domestic production activities deduction. Attach Form 8903 35 Moving expenses. Attach Form 3903 . . . . . . 26 Add lines 23 through 35 . . . . . . . . . . . . . Deductible part36 of from self-employment tax. Schedule gross SE . income 27 Subtract line line 22. This is Attach your adjusted Self-employed SEP, SIMPLE, and qualified plans . . 28 Self-employed health insurance deduction . . . . 29 Penalty on early withdrawal of savings . . . . . . 30 ▶ 31a Alimony paid b Recipient’s SSN IRA deduction . . . . . . . . . . . . . 32 Student loan interest deduction . . . . . . . . 33 Tuition and fees. Attach Form 8917 . . . . . . . 34
. . . . . . b Taxable amount
b Taxable amount b Taxable amount
Secure the Future Using the 1040 Enclose, but do not attach, any payment. Also, please use Form 1040-V.
Adjusted Gross Income
28 29 30 31a 32 33 34 35
Other income. List type and amount Combine the amounts in the far right column for lines 7 through 21. This is your total income
Line 32 gives you more than IRA deductions. 36 37
Domestic production activities deduction. Attach Form 8903 35 Add lines 23 through 35 . . . . . . . . . . . . . Subtract line 36 from line 22. This is your adjusted gross income
For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions.
Cat. No. 1132
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NEWS NASBA and AICPA Approve Revisions to CPE Provider Standards
The boards of directors for both the National Association of State Boards of Accountancy (NASBA) and the American Institute of CPAs (AICPA) have announced final approval of the proposed revisions to the Statement on Standards for Continuing Professional Education (CPE) Programs. The approval comes following a collaborative analysis of the standards by a joint AICPA/NASBA CPE Standards Committee and public comment period of an exposure draft. The revised standards will be effective as follows: • For group programs and independent study – July 1, 2012. • For self-study programs in development as of December 31, 2011, and/or being published for the first time – July 1, 2012. • For self-study programs already in existence as of December 31, 2011 – March 1, 2014. Significant revisions are in the areas of group Internet-based learning and self-study programs, issuance requirements for half credits under self-study programs, promotional/course announcement information for in-house training programs and alternate methods for calculating CPE credits for self-study programs. More information is available at nasba.org or aicpa.org.
FAF Releases FASB Accounting Standards Codification
The Financial Accounting Foundation has released an updated print edition of the Financial Accounting Standards Board’s (FASB’s) Accounting Standards Codification for
briefs public and private companies, not-for-profits and other non-governmental organizations. The new four-volume bound edition of the FASB codification contains all of the content of the online codification as of October 31, 2011. The FASB Accounting Standards Codification reorganizes the thousands of U.S. generally accepted accounting principles’ pronouncements, excluding governmental accounting standards, into roughly 90 accounting topics and displays all topics using a consistent structure. It also includes relevant Securities and Exchange Commission guidance that follows the same topical structure in separate sections in the codification. Visit fasb.org/store.
Frequent Flyer Miles Up in the Air?
A debate is brewing over frequent flyer miles and other credit card perks being reported as taxable income. Citibank recently issued 1099s to customers who opened an account last year as part of a promotion that included frequent flyer miles as a bonus. While the Internal Revenue Service (IRS) determined in 2002 that frequent flyer miles are not taxable, Citibank is now arguing that this version of the travel perk is because it’s a gift, analogous to a taxable prize.
Clarify Form 1099-R to Improve Taxpayer Compliance
Even small improvements in the IRS’ examination of tax returns with retirement income could increase taxpayer compliance and generate substantial revenue to the federal government, according to a Treasury Inspector General for Tax Administration (TIGTA) study. The IRS estimates that as much as $4.2 billion of the tax gap can be attributed to underreported retirement income.
New Jersey by the Numbers
The TIGTA recommends that the IRS revise the Form 1099-R to clarify the meaning of the taxable amount not determined box in order to reduce taxpayer confusion and include the dates needed to identify retirement savings program distributions and transfers not rolled over within 60 days as required, and establish procedures to transcribe additional lines from various tax forms. Visit treasury.gov.
Approved CBT Software Vendors
The following are the software vendors approved by the New Jersey Division of Taxation to produce the 2010 Corporation Business Tax Forms, CBT-100 and CBT-100S. 2011 Approved Corporation Tax Form Vendors: ATX, Corp Tax, Intuit - Lacerte, Intuit - ProSeries, TaxSlayer, TaxWise, TaxWorks, Thomson Reuters, 2nd Story Software and Vertex. 2011 Approved 2-D Barcode Corporation Tax Form Vendors: CCH-ProSystem, CS Professional Suite, Drake, STF and Tax$imple.
IRS Dirty Dozen Tax Scams for 2012
• Identity theft • Phishing • Return preparer fraud • Hiding income offshore • “Free money” from the IRS, and tax scams involving Social Security • False/inflated income and expenses • False Form 1099 refund claims • Frivolous arguments • Falsely claiming zero wages • Abuse of charitable organizations and deductions • Disguised corporate ownership • Misuse of trusts
Updated Rules Issued for IRS Communications with Appeals Office
The IRS has updated existing rules on permissible communications between the Office of Appeals and other IRS areas. The updated rules are in Revenue Procedure 2012-18. These rules address ex parte communications, which are communications between the Office of Appeals and other
200,000,000 Dollars for GrowNJ business incentives 76,600,000 PATH train ridership in 2011 22,731 Average NJ college student debt at graduation 1.25 Proposed dollar increase in NJ minimum wage
NEW JERSEY CPA • MAY • JUNE 2012
parts of the IRS that take place without the taxpayer or the taxpayer’s representative being given an opportunity to participate in the communication. In one key change from the 2000 ex parte communication rules, the Office of Appeals will no longer participate on issue management teams (IMT) but can be briefed by IMTs, as long as the discussion remains generic rather than case specific. IMTs include representatives from various IRS components, typically Compliance and Counsel, and the IMT meetings usually involve general discussions of how to handle technical issues or procedural matters.
SBA Increases Size Standards, Expands Eligibility
The U.S. Small Business Administration (SBA) will increase some of the size definitions of small businesses in professional, scientific and technical services and other services sectors. The SBA estimates that as many as 8,350 additional firms will become eligible for SBA programs as a result of these revisions.
GASB Issues Revised User Guide on Local Government Finances
What You Should Know About Your Local Government’s Finances: A Guide to Financial Statements is a comprehensive primer on local government annual reports for taxpayers, elected representatives and other people who need information about cities, counties, towns and villages. The guide, available at gasb.org/ store, includes: • Annotated examples of more than 50 government financial statements, notes and schedules. • A storyline designed to help the reader understand the concepts. • An introduction to basic financial ratios used to analyze government finances. • Helpful boxes and sidebars further exploring issues raised in the text. • An overview of governmental accounting and financial reporting. • An exhaustive glossary of terms.
NJ Supreme Court Upholds Accountants Privity Law
The NJ Supreme Court threw out a case that accused KPMG LLP of negligence for failing to uncover accounting fraud by a Monroe Township company purchased by the owners of a former giftware and collectibles manufacturer in 2000. The state’s highest court unanimously concluded that the plaintiffs did not satisfy the privity requirements established in the Accountant’s Liability Act (N.J.S.A. 2A:53A-25). The decision upheld the statute clearly defining that third-party suits against accountants can only be brought by those third parties that have established privity with the accountant. The plaintiffs plan to repetition the court. The Accountant’s Liability Act defines an accountant’s responsibility to third parties for negligent acts arising out of the services provided to a client. In 1995, the statute was overwhelmingly passed by both houses of the New Jersey Legislature and signed into law.
appletini_AppyHour-ext_4color_K_lite copy.pdf 1 3/23/2012 12:04:59 PM
appletini_AppyHour-ext_4color_K_lite.pdf 1 3/23/2012 12:03:24 PM
Don’t Worry, Be “Appy” NJSCPA Mobile, the New Jersey Society of CPAs mobile app, allows you to search, find and connect with other members; receive the latest professional news; view Society events; and more, all from your smartphone or mobile device. Integrated with Connect, the NJSCPA’s online community, features include: Directory – Use a searchable directory of NJSCPA members. News – Find breaking news, job postings, resource documents and more. Events – See a schedule of upcoming NJSCPA events. Discussions – Read and participate in Connect discussions from your mobile device. Messages – View any direct messages from your fellow members via Connect.
Contacts – Access all of the people you’ve become contacts with on Connect.
To Download NJSCPA Mobile
1. Visit your device’s application store and search for the “Mobile Membership” app by Dub, Inc. 2. Once downloaded, launch the application and search for “NJSCPA Mobile.” 3. Login using your NJSCPA username (email address) and password (member ID number, unless you’ve changed it). Questions? Contact Rachael Bell at firstname.lastname@example.org or 973-226-4494 x220.
NEW JERSEY CPA • MAY • JUNE 2012
See a demo of NJSCPA Mobile at the Accounting, Business & Technology Show (njscpa.org/abt) on May 16 and 17. And join us for “Appy Hour” at 5:40pm on June 6 at the NJSCPA Convention & Expo (njscpa.org/ convention). See a demo, get help with downloading the app and share information about other helpful apps you use – all while enjoying appletinis and appetizers!
Apps for CPAs There is no idea more powerful than one whose time has come. While tablet computing devices have been available for more than 10 years, Apple’s 2010 introduction of the iPad has revolutionized our ability to access and share the digital content that has become the lifeblood of our personal and professional existences. With hundreds of thousands of applications (apps) available from the Apple Store and Android Market, let’s zero in on a few apps especially useful for CPAs that can transform any tablet into a remote mobile office. Foundation Business Apps
By Marc D. Mintz, CPA Marc Mintz & Associates, LLC
Your tablet can act as an extension of your office desktop and network file server, and downloading and configuring a remote desktop client will provide access to all of the data and software you are accustomed to working with on a daily basis. GotoMyPC, LogMeIn, Citrix Receiver and a bevy of additional remote desktop clients all provide the same foundation for transforming your tablet into a portal for working with your existing information. Documents To Go is one of the most popular and extensively downloaded business apps, and it allows viewing, NEW JERSEY CPA • MAY • JUNE 2012
editing and the creation of Microsoft Office files, including Word, Excel and PowerPoint, when using your tablet computer. It can also view and edit email attachments, including Adobe PDF files, and provides functionality for two-way file synchronization. Printer Pro 3 from Readdle, Inc., enables wireless printing of documents, attachments, web pages and photos to Wi-Fi printers or a printer attached to your personal computer. While Printer Pro 3 is only available for the iPad, an app named PrinterOn is a download available for tablets or smart phones running on the Android operating system. The interesting twist with this app is that you select from a list of more than 9,000 international printing-onthe-go locations where you can go to print airline boarding passes or any other documents when you are on the road and without access to a printer.
Tax Research and News Apps User productivity is enhanced significantly when software developers customize their apps to leverage the technology and convenience of tablet devices. Presently, there is a great rush by the dominant market players to establish themselves as tablet savvy. Restrictedfeature, free apps are often posted to entice users to become familiar with a vendor’s broader product line. These tactics are quite evident with providers of research and tax news services.
BNA Quick Tax Reference is a free app that provides a dozen different tax rate schedules and deduction limitations for the current and previous tax years. It’s also available via smart phones and is an incredibly useful tool for CPAs who pride themselves on having instant access to current marginal rates and limitation thresholds. BNA’s ultimate objective is to drive users to their BNA Insights app, which includes tax analysis on key legal, legislative, regulatory and business developments drawn from its extensive library of publications and data services. CCH Tax News Highlights is a free app that provides daily federal and state tax news stories, but is limited to five in
each category. CCH Mobile gives existing subscribers access to its most frequently used CCH content, including customized Tracker News, Internal Revenue Service Code and Treasury Regulations. Tax research has moved from print and CD-ROM distribution to web-based access with the ability to stay connected through any Internet or cellular phone connection. Reuters News Pro for Android and Apple iOS is a free broad-based news app with a concentrated focus on financial markets, business and the economy. There is both breadth and depth in this highly professional information news feed and, for many, this free service
See The Good.
At the Community Foundation of New Jersey, we’re focused on helping our donors use their 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 corporate donors are using their CFNJ funds to make a difference: • A Give Back Scholarship Fund. In 2011, a New Jersey family approached the Community Foundation with the goal of doing something charitable to give back to employees of a franchise business they had built. With the help of the Community Foundation they designed a scholarship to benefit the children from franchises across the country. The scholarship provides funding for four years of college. The mother of the first scholarship recipient expressed her gratitude by simply saying, “It saved my family.”
can replace a multitude of information sources. Thomson Reuters’ complete feebased Checkpoint information services for tax and accounting professionals is also available on tablet computers, but the app has not yet been developed and subscribers will need to access their Checkpoint server using a remote desktop connection.
Accounting and Tax Preparation Apps Focused primarily on consumers and small businesses, Intuit has wholeheartedly embraced the popularity and buzz generated by tablets. TaxCaster by Turbo Tax is a free app
• ShopRite Partners in Caring Fund. Since 1999, the ShopRite Partners in Caring Fund has supported hunger-fighting efforts in New Jersey and throughout the Northeast. To date, ShopRite has donated $24 million to hunger-fighting organizations. A unique feature of the Fund is how it has become part of the ShopRite culture, receiving a variety of support from employees, customers and partners. If your clients are looking to make a difference through charitable giving, we’d like to be of assistance. Please contact Hans Dekker at email@example.com | 973-267-5533.
2012 Year-To-Date (Mar): Grants Issued - $5.46MM | Gifts to Donor Advised Funds - $5.23MM
© 2012 Community Foundation of New Jersey
NEW JERSEY CPA • MAY • JUNE 2012
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“User productivity is enhanced significantly when software developers customize their apps to leverage the technology and convenience of tablet devices.”
that offers the same tax calculator found in the popular Turbo Tax return preparation software and provides a graphic estimate of federal tax liability after entering information through a user-friendly interface. Taxpayers can then move to the fee-based Turbo Tax Preparation Complete app where federal and state returns can be e-filed from a tablet. Downloading the free My Tax Refund app completes the cycle by tracking the status of federal tax returns and refunds. Intuit melds its web-based QuickBooks Online accounting service to the functionality of a tablet or smartphone with its QuickBooks Mobile app. This free download enables businesses and their employees to access customer information and print and email estimates, invoices or sales receipts while at a prospect’s or customer’s location. Intuit GoPayment Credit Card Terminal extends this onsite functionality to include the processing of credit card transactions from these
same devices. Employers can also process and view payroll information by downloading Intuit’s Online Payroll app. Business apps with direct links to the software and services we use on a daily basis are a relatively new phenomenon and will continue to expand swiftly. Stay abreast of these new apps by periodically checking the most popular apps sections at the Apple Store and Android Market. 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 member of the New Jersey Society of CPAs Technology Interest Group and Editorial Advisory Board of New Jersey CPA magazine. Contact him at marc@ marcmintz.com or 973-808-9040.
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www.NextGenerationTrust.com NEW JERSEY CPA • MAY • JUNE 2012
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The Evolution of Employee Tech Policies
In the earlier days of business computing, when hardware architecture was a mainframe and a set of dumb terminals, technology policies were focused on interoperability rather than security. Security was really an afterthought. This attitude was even reflected in operating systems: security features used to be by default on the off position when you turned on your computer. Over time, the advent of networks, social media, employee-owned hardware and the proliferation of workflow and productivity tools have necessitated updated policies. The main employee technology policies today surround security and workflow.
Security: Hardware and Data By Jaime Campbell, CPA Bartolomei Pucciarelli, LLC By David Campbell Tier One Services, LLC
As hardware becomes smaller and more powerful, more and more employees are using their personally owned devices on the job. Some companies recognize this trend by creating policies supporting the purchase or subsidy of hardware, while others set policies for how to absorb these employee-owned devices into the corporate infrastructure. Bring-your-own-device policies focus on what resources a device, such as an iPad, is allowed to access, what kind of encryption will be utilized on the device NEW JERSEY CPA â€˘ MAY â€˘ JUNE 2012
and what kinds of data can be stored on that device. Certain smartphone operating systems are considered to be more secure than others. If the hardware has access to corporate resources, one policy to limit risk is a requirement that software be installed that allows for remote erasure should that equipment become lost, or administrators are provided access to the remote software that allows for the location identification or remote erasure of the device. Setting rigorous policies to encrypt and protect data are more crucial than ever. Some policies can be straightforward, such as requiring employees to lock computers when walking away from their desks, transmitting files over an FTP service instead of via email, having hardware available to test a USB for viruses before inserting it into an employee machine, and requiring passwords and enabling screen locks with short inactivity periods even for personal devices if they have access to company resources.
Security: Websites and Social Media One opportunity that makes mobile computing both valuable and risky is the transition to cloud computing and virtualization. Employees can access more computing power via mobile devices. However, security is still an issue as witnessed by some recent
major security breaches, such as Sony having its online entertainment network hacked and user information stolen. Even security leaders, like McAfee, were quietly contacted by the YGN Ethical Hackers Group when security holes were found on the McAfee website. Technology policies surrounding acceptable and blocked websites have evolved with a multitude of ways that attackers can gain company information. Some of that involves putting scripts into websites that allow tracking, monitoring and even password extraction. When an employee saves a password with a web browser, it is stored in an unencrypted file that hackers can gain access to. Therefore, two strong policies include requiring employees not to save passwords in websites as well as limiting their access to trusted websites. If an employee must access a website, then that site should be submitted for approval. This may be less feasible with thousands of employees, but to reduce the likelihood that an unknown website executes a script that compromises an organization’s security, group policies should be set that restrict the sites employees can access when using company resources. It may be inconvenient, but it’s part of the fine line that must be walked between short-term efficiency and protecting customer data and company resources. Social media websites, such as LinkedIn, Twitter and Facebook, carry a special set of policy considerations regarding employee access and participation. These are generally part
of an organization’s marketing portfolio rather than under the umbrella of technology. If an employee’s role includes that of company spokesperson, limiting the employee’s at-work access to these resources can reduce the likelihood that information is released or that the company will have to engage in reputation management. Social media sites are resources, but not everyone in an organization is equipped to responsibly act as a spokesperson for a company.
Workflow Daily workflow has evolved from the hard-copy environment into the paperless office, and some organizations have policies that have made the transition. How do employees work? Are there computerized resources for preparing, reviewing and finalizing work? What about shared resources? Are there policies regarding a filing system, naming conventions and protections against the accidental or unauthorized deletion of shared files? These considerations are just as essential in the digital age as they were in the hardcopy environment. A formal policy kept alive in daily conversations helps employees to transition great hardcopy processes into the paperless environment.
Effective Employee Tech Policies Policies should be effective but not obtrusive. The more obtrusive the policies are, the more employees NEW JERSEY CPA • MAY • JUNE 2012
will find ways to circumvent them in order to get work done, or they will simply cease using the resource. Requiring frequent password changes and extremely high complexity for passwords can result in employees choosing to write them down in an extremely accessible place, such as under their keyboards, in their desk drawers, stuck to their monitors or somewhere else where unauthorized people can easily find them. As we are becoming increasingly aware of the need to protect the organization and reduce the overall security exposure, group policies are becoming more of a default in businesses. When moving into cloud services, even some of the more experienced players have hardware failures or human error. Something as simple as a person making a configuration error can open the system to great risk. It is advantageous to balance strong policies with accessible, usable systems as we incorporate the bring-your-own-device model into organizations. Jaime Campbell, CPA, M.B.A., CTT, MCT, leads the technology training services at Bartolomei Pucciarelli, LLC. She is a member of the New Jersey Society of CPAs Technology Interest Group. Contact her at firstname.lastname@example.org. David Campbell is the managing partner of Tier One Services, LLC. Contact him at david@ tieroneservices.net.
E-Slander and Responding to Online Attacks
The Internet allows us rich access to unlimited information. Unfortunately, it also enables anyone to communicate anything, at any time, even if the information is biased, poorly supported or just plain false. CPA firms depend upon their reputations to attract and retain clients and talented employees. A good reputation is essential, so every CPA firm needs to manage its online reputation, enabling it to respond quickly and effectively to negative information if it does appear online.
By Lin Kroeger PWD Consulting, Inc.
What is the process for managing an online reputation? • Establish goals, a strategy and guiding principles for online communication; and communicate online regularly, clearly and professionally. • Diligently monitor the firm’s online reputation. • Respond to any negative online assaults quickly and effectively. Ultimately, a tremendous number of conversations occur online, and negative commentary about a firm NEW JERSEY CPA • MAY • JUNE 2012
might occur. The conversation may mean very little, or it may mean a great deal. The firm needs to know something has been placed online and decide whether – based on its reach and magnitude – the negative comments can be ignored or require a response. If a response is necessary, having an established presence online will allow an effective, rapid response. Only in a worst-case scenario will legal advice be required.
The Internal Focus What are the firm’s online communication goals? Are you helping people solve problems in the hope that one day they might seek your firm’s services? Are you establishing your firm as a great place to work and build careers? Know what you are trying to achieve, and select relevant online tools. Be very clear to everyone in the firm what the goals are. Define the firm’s online guiding principles. Guiding principles make it clear what people can and should not do with their online communications. What information can be shared or is strictly confidential? What is the expected tone? Who is responsible for monitoring the firm’s content? Are there approvals required before
someone corresponds, tweets or blogs? Remember, burdening participation with approvals and controls can make the effort pointless. If the guiding principles are clear, they should enable everyone in the firm to engage in social media while representing the firm with clear voices and interesting stories that put a human face on the firm to attract clients and/or new talent.
The External Focus Firms should conduct regular online searches for references to the firm, its principals and employees. Tracking a firm’s reputation is relatively easy and can consist of conducting regular searches, establishing search feeds that automatically notify the firm of new references and hiring online tracking services. Online reputation management is an industry, and new services become available regularly. One source is Outspoken Media (outspokenmedia. com). It provides tracking, worksheets for assessing the firm’s online reputation and many other related resources.
Legal Aid One of the important guiding principles is identifying when legal support should to be called in. Sometimes, online attacks are vicious and require a legal response. By all means, engage an attorney if an attack is severe. As communications consultant Chris Pinto (christopher.pinto@ comcast.net) points out, “If you have a situation where someone is slandering you in a blog, you might need to get legal counsel and get a cease-and-desist order.” Pinto also notes that if a firm has a clear, consistent presence online and shares stories and ideas regularly, it is relatively difficult for someone to attack successfully. The attacker has to have a lot of personal or corporate validity to overcome a reputation for good information, excellent service and reliable people.
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Respond to Any Negative Online Assaults Quickly and Effectively Respond Quickly – Confirm the negative comment, and respond as quickly as possible. Keep the tone professional. At a minimum, ask for more information. Ideally, respond in a friendly, accepting tone and communicate your interest in remedying the situation. If a solution is available and appropriate, offer it. Affirm the commenter, not the comment. Frustrated clients, employees and former employees are already unhappy. They do not need to be told they are wrong. Affirming requires acknowledging the complaint without agreeing with or denying the complaint or accusation. Chief Communication Officer Bill Sheridan of the Maryland Association of CPAs (macpa.org) shares a story about how online reputation management can work well. When the MACPA was starting to work with TypePad to produce the Association’s
blog, Sheridan was having trouble posting to the new blog and, in frustration, posted a message on Twitter, “Is anyone else having issues with TypePad?” To its credit, TypePad was tracking itself online, saw the tweet, sent Sheridan a message and asked how it could help. In short order, TypePad solved his problem, and he was back to blogging. Get More Information, and Focus on a Practical Solution – Much online content lacks good information. Client reputation consultant Darcy Bevelacqua (email@example.com) suggests firms confirm the situation and ask for more information. Engage the person or organization generating the attack, and learn more about what has occurred so that the firm can respond appropriately. If appropriate, apologize and work toward a resolution. Bevelacqua suggests asking the person with the negative comments what it would take to fix the situation to his or her satisfaction? If feasible, implement
the solution, and share the resolution online. Engage Your Community – If the firm has an online presence, other people who follow your firm might offer you a supportive response. As Bevelacqua points out, a community response demonstrates support for your position, minimizes the appearance of defensiveness and creates community commentary, while the firm shows it cares about clients and/or employees.
It All Hinges on Planning and Engagement Ultimately, establishing, maintaining and monitoring a firm’s online presence enable it to respond constructively to both negative and positive online comments. Lin Kroeger, PWD Consulting, Inc., (pwdconsulting.com) is a management consultant focusing on communication and managing change and collaboration. Contact her at firstname.lastname@example.org.
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Using Technology Metrics at Your Firm
There is no magic number to benchmark CPA firm technology spending. However, it is important to understand the similarities and differences between technologies deployed at your firm and those used at other firms.
By James C. Bourke, CPA WithumSmith+Brown
One of the most significant flaws I have seen in trying to compare CPA firm technology spending is that virtually no two firms categorize this spending in the same manner. As such, CPA firms try to compare the line items to some readily available industry statistics which do not truly compare with the actual spending or structure of the firm. You first need to analyze the separate components of what you are spending to ensure that everything technology related is being appropriately captured. Regardless of how you categorize technology on financial statements or tax returns, when analyzing total technology spending, your starting point needs to be the same. Make sure your technology cost is fully loaded, covering all costs associated with firm technology and communications. These costs should include: • Application licensing. • Support agreements. • Hardware, including all end-user machines, servers and networking equipment (actual dollars spent on NEW JERSEY CPA • MAY • JUNE 2012
all hardware during the period versus depreciation). • The purchase and monthly recurring fees for mobile devices. • All communication fees, including local and long-distance telephone charges, bandwidth and local and wide-area network connectivity. • Website hosting and consulting fees. • Labor and benefits for staff supporting your technology infrastructure. • Technology outsourcing. • Programs and application fees under a cloud-based computing model. • All other fees directly related to technology and communications within your firm. Once you have compiled the above actual spending for a 12-month period, you can start comparing spending at your firm to that of others. Depending on how technology is deployed within your practice, spending at a traditional CPA firm generally runs from approximately 5 to 6.5 percent of net revenues. While that spread could be fairly significant, this is a target that can be applied once the above analysis has been completed. The largest bucket of a firm’s technology cost is generally software and licensing fees. Most firms spend between 40 and 45 percent of their technology budget in this area. Focusing on the components in this area can often help you better manage this line item:
• Review and understand license agreements. Make sure the number of licenses matches the number of users. • Verify the price of a renewal upon its base fee calculation. Ask about the current selling price of the product versus the price upon which your firm acquired the application. • Review applications utilized by the firm. Is your firm utilizing multiple write-up, after-the-fact payroll, engagement management, tax preparation and planning solutions, web-based accounting and tax research tools? Do not license multiple applications that do the same thing. • Negotiate your best deal at renewal time, and ask about cloud solutions.
Nearly every vendor serving our profession today has a cloud-based (software as a service or similar technology) model. These solutions allow for the deployment of applications and data storage without the need for any initial investment in servers or storage devices. Under this model, the firm basically pays a monthly fee for access to such technology. Look to bundle mobile technologies and communications charges with the same vendor, where possible. Vendors are more inclined to offer material discounts based upon volume. Also, make sure your staff has the correct voice, data and texting plans in place. Younger staff has a much greater tendency to communicate with text or email, while Spending on hardware and backbone senior staff typically communicates via equipment is also generally near the top voice. Plans that share voice, data and of the list: texting minutes, and volume for the • Standardize your equipment with entire firm are a much better fit. Don’t one vendor. This can lead to quantity lose sight of the primary purpose of discounts at replacement time. mobile devices within the firm: to enable • Consider extending the lives of laptops staff to be productive and responsive to and servers 6-12 months greater than clients. Solutions will run from free to your existing replacement policy. When more than $500 per device. Keep mobile doing so, look to extend warranty devices current, and look to replace coverage. them upon reaching the end of contract periods. Try not to replace devices within If your firm is at end of life on servers a contract period, as you’ll be paying and other devices connected to your significantly more than fair market value network, give serious consideration to of the device to obtain new technology. the cloud model of computing before Before deploying new technologies assigning capital for this or1replacing existing ones, ask yourself, NJCPA-0212_01_Layout 1 investment. 1/29/12 8:53 PM Page
“How will this deployment make us a better, more profitable firm, and is this technology aligned with our strategic plan?” Knowing your technology component costs will put you in a better position to manage your spending during an economic downturn. View technology cost as a strategic asset to the firm, not as just another cost of doing business. Don’t deploy new technologies or replace existing ones just because your peers are. Don’t be the firm with the bleeding-edge technologies that are too early in their lifecycles and not yet ready for full deployment. Don’t be quick to fall into the trap of trying to conform to an industry metric unless you can truly compare such results with technology spending within your environment. Simply put, if the right technologies are deployed the right way and tightly integrated into your practice, you could easily increase efficiencies, improve turnaround time, enhance client responsiveness and ultimately increase profitability. James C. Bourke, CPA, 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. He is co-chair of the American Institute of CPAs Tech+ Conference and has been recognized by Accounting Today and the CPA Practice Advisor. Contact him at firstname.lastname@example.org.
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Auditing Software That’s the CAAT’s Pajamas B Y JESS IC A D. OFFER, C PA, W I THUM SM I TH+ B ROW N
he technology industry is constantly evolving and, as a byproduct, it revolutionizes other industries – the accounting profession being one of them. In today’s accounting profession, software has gained a growing presence in many firms’ practices, especially in audit and attestation services. Software allows auditors to better collect, arrange and analyze data. Not only does software increase efficiencies, it also increases the effectiveness of procedures being performed and results in a more precise conclusion. There have been numerous advances in software which have helped auditors both plan and perform audits. Historically, audit files consisted of hundreds of pages, all held together in a briefcase or a “red rope.” Software has reduced the need for paper and created a cloud storage space for audit files. Besides enhancing portability, this has also allowed for remote access by multiple users of the same files and the backup of data. One such software product is ProSystem fx Engagement (cchgroup.com/ prosystemengagement). It allows a firm to create files for various clients in one central location. You can create files for different audit years (or even different types of engagements, such as quarterly reviews or tax engagements) for each client. Electronic workpapers increase standardization via indexing, accessibility and organization. Every auditor needs an audit program in his or her tool kit. Thomson Reuters’ Checkpoint Tools for PPC (yourcheckpoint. thomsonreuters.com/tools) provides accounting firms a solid template for audit programs and various
correspondence. There are templates customized for specific industries or types of audits, such as not-forprofit single audits and HUD audits. This customization saves auditors time and helps them perform a more effective audit by having industry- and compliance-specific programs. Other companies have released more advanced templates for audit programs which offer further clientspecific customization. One such template is Knowledge Coach by ProSystem fx (tax.cchgroup.com/ knowledgecoach). Knowledge Coach generates an audit program based upon risk, which the auditor assesses by answering a variety of questions. While the templates are beneficial, the auditor still needs to assess risk and determine the procedures to be performed. This tool increases auditor efficiency and effectiveness, but it does not eliminate the need for auditor judgment. One specific type of software that can help accountants when they move from planning to fieldwork is CAAT (computer assisted audit techniques). CAAT allows auditors to better and more quickly identify, examine and reduce risk, therefore increasing profitability on engagements. However, auditors run the risk of relying too much on software, leading to possible errors. Although the ability to automate certainly has its benefits, CAAT does not replace the need for an experienced auditor’s judgment. Case Ware International’s IDEA Data Analysis and Extraction Software (caseware-idea.com) is one CAAT used by auditors today. Traditional auditing used to employ a samplebased approach, because auditing NEW JERSEY CPA • MAY • JUNE 2012
100 percent of a population, without technology, was virtually impossible. In certain instances, IDEA now allows an auditor to analyze 100 percent of a population. The downside of testing an entire population, however, is increased risk of false errors. IDEA has built-in analyses that can help auditors perform a variety of procedures to evaluate management’s assertions. IDEA allows auditors to test for duplicates, gaps (missing items in a sequence), compare multiple reports with a common field, review data sets for anomalies (e.g., debit balances within liability accounts, transactions posted on a weekend) and much more. IDEA also has account-balance-specific analyses for areas such as accounts receivable, inventory and the all-encompassing general ledger. While IDEA and the other accounting software products provide auditors a multitude of tools to increase efficiency and audit effectiveness, it is up to the auditor to assess risk and determine which procedures should be performed. Auditors still need to understand the purpose for their procedures and what they are trying to achieve in order to assess the software analysis’ results. CAAT is not a total savior, but it certainly is a blessing for auditors everywhere. Jessica D. Offer, CPA, is a senior accountant at WithumSmith+Brown. She is a member of the New Jersey Society of CPAs Accounting & Auditing Standards and Federal Taxation interest groups. Contact her at joffer@ withum.com or 908-526-6363.
Using Workflow Automation to Improve Productivity B Y VICTORIA KOS UDA, C PA, B E YOND F I NANC I ALS C O N S U LT I N G , L L C
ptimizing productivity within a professional services firm is a critical factor in driving profitability. In accounting firms, time is money, and inefficient processes have a direct impact on how much work can be completed during any given period. Staff time is an asset that needs to be focused primarily on revenue-generating activities. In addition, accountants function in a compliance-driven world, so not only does staff time need to be maximized, there needs to be assurance that all defined procedures are properly followed. The goal is to deliver a complete, accurate, timely work product to the client. In many firms, workflow is a combination of disparate systems that includes checklists, calendars, emails, Excel files, routing forms and sticky notes. A lack of integration can leave room for missed dates, noncompliance, poor client service and overall inefficiency. The challenge of managing workflow needs to be looked at strategically. How can a firm improve its internal processes and better manage resources in order to optimize productivity and enforce compliance? The first step is to leverage technology. Workflow automation is the concept of using technology to push work through the office while digitally monitoring firm activity. The technology tracks the lowest level of detail related to a deliverable so that anyone in a firm can access the information and clearly see the status. Workflow automation technology can define the path a client folder needs to take. Once these points are set, work moves through the process, and firm management can monitor it every step of the way.
At the staff level, people have access to their own dashboards where they can see the work assigned to them. Work will move on and off their dashboards as tasks are completed. Questions, sign offs and checklists are all in one repository allowing easy access and standardized processes throughout the firm. At the partner level, dashboards allow a high-level, real-time status of the work they are responsible for. Partners can easily look at resource allocation and adjust to better balance workload. Partners can respond to staff questions at any time, and their responses can be viewed by anyone working on a given client. Workflow technology can be implemented as a standalone tool, or it can be fully integrated with other firm software as a full practice management solution. The return on investment of workflow automation is maximized in a paperless environment, since the tasks and associated documents can be automatically pushed to the appropriate firm resource. But even in a paper-based environment, workflow automation can drive efficiencies with defined procedures and centralized information management. Before implementing workflow technology, a firm should first streamline internal processes where possible. A firm may also want to look at implementing one type of engagement (e.g., tax returns) before moving on to others. The goal is to include all firm activities in one central repository. As we move to the cloud, vendors are offering robust web-based solutions. These types of solutions make the technology more affordable with the added benefit of anytime, anywhere NEW JERSEY CPA • MAY • JUNE 2012
access. The top three contenders are XCM Solutions, Thomson Reuters and CCH: • XCM Solutions is consistently named as a couldn’t-live-without solution by firms of all sizes and is a preferred provider of the American Institute of CPAs. XCM can even meet the needs of sole practitioners and small firms with XCMEssentials (xcmsolutions. com). • Thomson Reuters offers FirmFlow which can be used as a standalone workflow solution and integrated with GoFileRoom document management (cs.thompsonreuters.com/firmflow). • CCH ProSystemfx offers Workstream which integrates with the ProSystemfx Suite (tax.cchgroup.com/workstream). The current technology landscape has allowed for workflow solutions that can have a significant impact on productivity for firms of all sizes. In addition, they support the movement toward a paperless office and a more mobile workforce. Workflow can help firms manage their greatest resources more strategically, while driving compliance, productivity and revenue. See how a workflow solution might increase your firm’s productivity at http://review.xcmsolutions.com/ calculator/index.htm. Victoria Kosuda, CPA, CITP, is a technology consultant for Beyond Financials Consulting, LLC. She is a member of the New Jersey Society of CPAs Technology Interest Group. Contact her at 908-358-4680 or vicki@ beyondfinancialsconsulting.com.
The Full Disclosure on Compliance and Disclosure Issues for Financial Advisors B Y JEF FREY CH RIS TAKOS, C PA, W E STF I E LD W E ALTH MA N AG E M E N T, L L C
o matter what type of financial services you provide, how you operate or the size of your business, as a financial advisor you must follow the industry rules for certain disclosures and compliance. Designed to keep consumers informed, these rules greatly benefit our potential clients (and, ultimately, us), by making it easy for them to find out basic information about firms and individuals when they shop for a financial advisor.
Who Are You? Financial planners come in all shapes and sizes. Some are commission-based and others are fee-based; some have an investment bias, insurance bias or income tax bias. Yet, all of us tend to use the same job titles, such as wealth manager or financial advisor. How can a consumer pinpoint the type of work you do, your certifications and your reputation? The answer is through information you disclose to the appropriate entities.
Are You Registered with a Broker-Dealer? Financial advisers who are registered with broker-dealers are required to make adequate disclosures of their licensed relationships on all public documents. All brokers must also register with the Financial Industry Regulatory Authority (FINRA), and consumers should visit finra.org to review the firms’ and the licensees’ registrations. They can see if a broker’s clients have registered complaints and how the cases were settled.
Are You Registered with an RIA? Depending on the amount of client assets under management, financial advisors who are registered with
Registered Investment Advisory (RIA) firms must register with the state or with the Securities and Exchange Commission (SEC). The SEC typically regulates financial advisers who manage more than $100 million in assets. Information on firms and individual registrants can be retrieved on the SEC website at sec.gov under the Investment Adviser Public Disclosure Program. In addition to general information on registered firms’ and individuals’ backgrounds, people can check prior complaints and resolutions.
Regulations If you’re a registered investment advisor, you’re obligated to follow the “brochure rule.” This simply means that you’re required to give each of your clients or prospective clients two documents: a Form ADV Part 2A (brochure) and Part 2B (brochure supplement), which describe your business practices, conflicts of interest and background, including the background of any advisory personnel. You must deliver your brochure either before or at the time you enter into a contract with the client. Furthermore, if your information changes, you must update the brochure and deliver it to clients on an annual basis, without charge. Investment advisors must also adhere to tight advertising restrictions. In materials, including letters, notices and traditional advertising media, advisors are not allowed to use or refer to client testimonials; refer to any specific recommendations made that were profitable without including a list of all recommendations; or represent that any report, analysis or other service is available without charge unless no other obligation is involved.
NEW JERSEY CPA • MAY • JUNE 2012
Are You a CFP? If you earn the Certified Financial Planner (CFP) certification, you must follow the CFP Board of Standard’s updated Standards of Professional Conduct. These ethical standards are actively enforced through the board’s investigative and disciplinary processes. The CFP board provides sample disclosure forms for certificants, designed to appropriately supply clients with: • Information about the CFP professional. • Services being provided. • Conflicts of interest a CFP professional may have. • Costs to the client associated with the services being provided, including compensation agreements, financial or investment product fees, or other costs related generally to transactions or advice by the CFP professional. The CFP standards also outline the timing, content and manner in which disclosures must be made by a CFP professional to a client or prospective client. Following the appropriate rules for disclosures and compliance will benefit your business and our industry as a whole. Making information on your services, business practices and history more transparent can result in more clients – and a better reputation for all financial advisors. Jeffrey Christakos, CPA, CFP, CLU, is the managing director of Westfield Wealth Management, LLC, and a registered principal with United Planners Financial Services. He is a member of the New Jersey Society of CPAs Personal Financial Planning Interest Group. Contact him at jeff@ westfieldwealth.com or 855-996-7526.
Forensic Analytics: Methods and Techniques for Forensic Accounting Investigations REVIEWED BY REBECC A B . F I TZHUGH, C PA, SOB E L & C O M PA N Y, L L C
was pretty enthusiastic about being asked to review this book, written by Mark J. Nigrini, Ph.D., and published by Wiley. As a forensic accountant, I love to learn new methods of analyzing data and detecting fraud. This book is not for the faint of heart when it comes to statistics and related terminology. However, you do not necessarily need to read this book word for word. Skip to the parts of particular interest to you, and I can almost guarantee that you will learn something that will advance your forensic accounting practice. The book begins with a chapter each on using Microsoft Access, Excel and PowerPoint in forensic investigations and presentations. I initially thought these chapters were somewhat pedantic, but then decided that in a field where many practitioners are self-taught, and knowing that there are always new Microsoft tools to discover, it really is helpful to have this information in some detail. At the very least, it is good to have reminders of some basic software techniques. Overall, Nigrini shows how to perform various tests in both Excel and Access, and emphasizes that these two common software programs are highly versatile for use in data analysis, especially since recent improvements have greatly increased the ability of Excel to process large amounts of data – the 2007 version can handle more than one million rows and 16,000-plus columns. The fourth chapter presents some highlevel data overview tests and explains how descriptive statistics can provide a treasure trove of information about a data set. As a user of IDEA data mining software, I have always found value in
reviewing just such information because it helps one judge whether a data set is complete or has obvious errors. I remember when a staff member new to data analysis performed a full battery of tests on a data file without realizing that there was no conceivable way that the company in question could have had $42 billion in sales! Nigrini spends a lot of time on Benford’s Law (which he is currently working on a second book about), which is a method of detecting red flags of fraud or data irregularities based on the distribution of digits within a large set of numbers. While familiar with the basics of Benford’s Law, I was unaware of just how useful it is in analyzing data, and I will definitely consider it in more depth in the future. The best thing about this book, however, is that Nigrini – an associate professor at The College of New Jersey – does not approach data analysis from a purely academic viewpoint. He details several practical examples of real-life forensic data analysis methods used by businesses for purposes such as detecting manipulations in monthly subsidiary reports and includes a very informative chapter on analyzing purchasing card data. The examples used real data and explained possible interpretations of various patterns. While these examples were likely derived from large companies, many areas could be adapted for use with smaller entities. In addition to including numerous illustrations, the book’s data tables are available to readers on the book’s NEW JERSEY CPA • MAY • JUNE 2012
website, so you can actually run the tests on the same data being described. If you analyze data in your forensic practice, this book would be a worthy addition to your reference library. HHH Rebecca B. Fitzhugh, CPA, CFF, CFE, is a senior manager with Sobel & Company, LLC. She is a member of the New Jersey CPA magazine Editorial Advisory Board and the New Jersey Society of CPAs Business Valuation Forensic Litigation Services Interest Group and is an NJSCPA trustee. Contact Fitzhugh at firstname.lastname@example.org.
Book Review Guide HHHH Instant classic HHH Great addition to your bookshelf HH Offers some good insights H Not much of a resource 0 Don’t bother
Succession Planning for CIOs B Y M ICHAEL L . L AMOTTA, C PA, W I SS & C O M PANY, LL P
he ever-increasing responsibilities of the chief information officer’s (CIO’s) role means little time is left for succession planning. Identifying, mentoring and developing a successor is a long-term project that requires resources and planning and is easily put off due to everyday pressures and workload. However, there is a big risk by not doing it. The role of technology as a business enabler continues to grow, and information technology (IT) is becoming critical to every function in a business. Corporate productivity is increasingly driven by the ability to make data available to decision makers, employees and clients. Its effectiveness has become a competitive weapon in today’s business environment. Succession planning is the key to managing business-wide continuity and reliability. It ensures the business will not be left in a vulnerable position and that the IT department will continue to offer the support the business needs. Not having a succession plan in place can mean a temporary and reactionary solution should the CIO leave a company and can result in putting the business at risk of disruption, lack of direction and loss of institutional knowledge. A good succession plan can adapt to the organization’s changing needs and should work in tandem with human resources, but should remain the responsibility of the CIO. The first step is to perform a needs analysis by evaluating the current and future needs of the company and by identifying the talent and skills required for the position. Also, evaluate the level of leadership the company needs from the IT department. Next, identify talent and groom from within the company. The
current role of the CIO has evolved from technology-focused caretaker to essential business strategist. Consequently, the CIO needs to thoroughly understand the company’s product, services and internal structure and must play a variety of important roles, both within the company and while working with clients. Having excellent technical skills is not enough. In addition to a high level of technical knowledge, CIOs must have business acumen, leadership and relationship management skills to be successful. They must be good communicators and astute to company politics. By defining competencies, you can evaluate and classify employees. Once you have identified your management needs, determine who can fill them now and in the future. Start with employee performance evaluations, and make sure they include an examination of individual goals for growth. Link employee and leadership development to the current and future needs of the business. Now, begin developing talent. Work with human resources to develop a strategic plan. Evaluate the skills, performance and growth of employees you have targeted as part of the succession plan. Start mentoring, coaching and developing formalized feedback. Provide critical developmental experiences to those who can move into key roles. Handson experience is essential, so put those emerging leaders to the test. Give them the lead on a new project, let them attend management meetings, designate them as alternates when the current CIO is out. It is important to give them experience in decision making, so delegate important decisions and the responsibility for those decisions (e.g., selling and NEW JERSEY CPA • MAY • JUNE 2012
defending an idea or project). This will not only be invaluable to the employee, the exposure will give others within the organization a chance to see the employee in a leadership role. It gives the employee the opportunity to be prepared before the job opens as well as allows the organization to accept the employee as a trusted partner from day one, ensuring a smooth transition into the leadership role. Finally, periodically evaluate your succession management efforts. Are you successful in developing the leadership qualities of those you mentor? The CIO should work with human resources to annually evaluate the performance reviews and the overall progress of the succession plan program. Fill in any identified gaps by providing potential managers appropriate training, education and mentoring. Knowing what leadership teams you need in place for the future will drive your succession planning strategy today. Michael L. LaMotta, CPA, is the partner-in-charge of tax services at Wiss & Company, LLP. He is a member of the New Jersey Society of CPAs. Contact him at mlamotta@ wiss.com.
Wi-Fi Versus 4G B Y DAVID A. L OPEZ, CPA, DAVI D A. LOPE Z AND C OM PA N Y, L L C
G; 3G; Wi-Fi; VoIP. You are not alone if you are confused by these acronyms. Small-firm practitioners hear these terms daily but may not understand how they fit into their firms. Many may ask, “What are the differences between these technologies, and what capabilities do each provide that can improve my firm?” The following is a summary of the differences between Wi-Fi and 4G and how practitioners can use each to enhance their client service.
Wi-Fi Wi-Fi has been around for years. In a small-firm setting, many practitioners are familiar with Wi-Fi’s most common use – the internal wireless office network. In that capacity, Wi-Fi provides access to a server that stores our client files, the Internet and our daily emails. Because of its low cost and ease of installation, Wi-Fi networks were designed for personal and small corporate network environments. Wi-Fi technology can make firms much more efficient when dealing with client data. At our firm, we utilize Wi-Fi technology in many different ways: to forward notifications from our smartphones to our computers, send documents to our printers from any computer or smartphone and use our smartphones as a remote control for our laptops. Even though Wi-Fi expands capabilities, it does have a limited range of access. Most Wi-Fi networks have a range of approximately 800 feet, which means you cannot stray very far from the router. In addition, Wi-Fi only supports data transfer, which means you cannot use the technology to transfer voice-based or video-based signals. Even with these limitations, Wi-Fi is a cost-effective, reliable tool for small firms and sole practitioners.
4G 4G, which stands for fourth generation network, is a relatively new technology, which many consider to still be in the developmental stage. Unlike Wi-Fi, 4G is not yet available worldwide but is available in North America and Europe. 4G technology is expensive and, due to its high cost of operation, is intended to be managed by mobile communication companies rather than small businesses. But with higher cost comes terrific capabilities. We purchase 4G access from a mobile provider, and it provides us with 4G’s most appealing characteristic: speed. Everyone has a need for speed, and small-firm practitioners are no different. We all want our Internet and our email downloads to be lighting fast; 4G fulfills this desire. It has a transfer of data rate of 100Mbits, twice the speed of Wi-Fi. This increased speed allows for much faster uploads and downloads of content through email, the Internet and other 4G devices. In addition to faster speeds, 4G supports both data and voice, compared to Wi-Fi’s data-only support. This capability truly changes the way we conduct business. With voice and data support, video conferencing on handheld devices has become more common. 4G makes our handheld devices just as powerful as our desktop computers by providing high-speed IP communication to smartphones, tablets and pads, allowing them to run Internet applications such as Skype and YouTube. 4G also features Voice NEW JERSEY CPA • MAY • JUNE 2012
over Internet Protocol (VoIP) capability which is, simply put, telephone service through the Internet. With 4G’s VoIP access, a small firm can subscribe to a phone number in a region where it wants to do business but does not have a physical presence. For example, your main office is in New Jersey, but you service clients in California. You can subscribe to a phone number with a California area code, and all calls to that number would ring on your smartphone which has a local New Jersey phone number through your 4G Internet connection. 4G has just made the world much smaller for many practitioners. Technology advances every day, and 4G continues the forward movement. It picks up where Wi-Fi has left off and provides us with speed and enhanced capabilities that allow us to conduct business in a much more efficient and effective manner. David A. Lopez, CPA, is the principal at David A. Lopez and Company, LLC. He is a member of the New Jersey Society of CPAs. Contact him at dlopez@ davidlopezcpa.com or 215-732-9196.
New Jersey and Federal R&D Credit Studies B Y JOSHUA FEL DMAN, GRANT T HOR NTON LLP
filers with a 2012 year-end will receive a pro-rated credit for their 2011 expenditures. Practitioners expect a retroactive one- or two-year extension of the credit during the current Congressional session. New Jersey enacted its own R&D credit for tax years beginning after January 1, 1994, equal to 10 percent of qualified New Jersey expenditures over a base amount. Structurally, the NJ credit mirrors the federal credit with minor exceptions. Starting in 2012, New Jersey taxpayers can eliminate 100 percent (instead of 50 percent) of their tax liability and apply it to their entire carryforward. The New Jersey credit expires in November 2014, but several bills seek to extend it or make it permanent.
R&D Credit Studies: Let the Documentation Do the Talking
he Federal R&D Tax Credit is celebrating its 30th anniversary; the latest extension provided a credit through December 31, 2011. The credit is available to all industries, including software and architecture/ engineering firms. It can total 6.5 percent of qualified expenditures, offset tax liability dollar for dollar and be carried forward for 20 years. As of this writing, no financial statement benefit can be recognized under ASC740 for qualified spending after December 31, 2011, and fiscal
The purpose of an R&D study is to identify and document the nature and extent of qualified research expenditures (QREs) and activities (QRAs). No two studies are the same, because the design process is driven by industry, company culture, information technology, documentation policies, timing and other variables. However, there is unity, because examiners typically require contemporaneous documentation to establish several core principles: the identification of a new or improved business component (product/process), whether the related activities satisfy the four-part test of Internal Revenue Code Section 41(d) and the nexus between the QRE and QRA. Recent cases (Union Carbide v. Commissioner and Cohan v. NEW JERSEY CPA â€˘ MAY â€˘ JUNE 2012
Commissioner) have accepted employee interviews as QRE estimation criteria only after documentation has established the core principles. Basing a study on documentation, rather than employee interviews, produces a deliverable with three immediate benefits: It anticipates the examination of core principles, documents the nexus between QREs and QRAs and significantly reduces the impact on company resources. Documentation-based studies are effective for companies of any size. Smaller companies might opt for complete coverage, and large companies might use statistical sampling to solve otherwise unmanageable issues. Ultimately, the success of any study relies on a willingness to invest time to understand the company and its systems, documentation and culture. Open years can be assessed to determine the feasibility of seeking a refund/carryforward. During 2007, the Internal Revenue Service (IRS) Large and Mid-Size Business division (now Large Business & International division) issued a directive making R&D credit refund claims a Tier 1 coordinated issue, resulting in the examination of the credit by specialists and requiring the involvement by a national issue coordinator. A company might avoid Tier 1 by adjusting its Form 3800 carryforward prior to exhausting accumulated net operating losses (NOLs). In a recent public statement, the IRS indicated the phasing out of the Tiered Issue program for a knowledge management process executed by Issue Practice Groups. This new approach is intended to foster consistent treatment of issues and settlement discretion in the field.
R&D Credit Studies – Enhancements and Peripherals Identify other unclaimed tax benefits, and leverage the data and information already gathered for the R&D studies. For example, other neighboring states have refundable R&D credits. The Section 199 manufacturing deduction (also applicable to hosted/SaaS software companies), favorable accounting method changes and hiring credits can be discovered and implemented during a study.
The New Jersey Economic Development Authority’s Technology Business Tax Certificate Transfer Program allows certain unprofitable companies to sell their NOLs and New Jersey credits to New Jersey companies for at least 80 percent of their value. The Small NJ-Based High-Technology Business Investment Tax Credit (NJSA 54:10A-5.28-30) allows New Jersey companies a 10-percent credit on qualified investments in certain New Jersey companies (for three years, up to $500,000 per year).
NEW JERSEY CPA • MAY • JUNE 2012
Practitioners expect the credit incentives to continue, examination activity to increase and the focus on documentation to continue. Studies should deliver balanced documentationbased coverage of the core principles while managing impact to company resources. Joshua Feldman, J.D., LL.M., is a senior manager at Grant Thornton LLP in the strategic federal tax services group. Contact him at joshua.feldman @us.gt.com or 212-542-9687.
Business Intelligence: The Software Dilemma B Y A NTHONY MONG E LU ZO, PRO C O M PU T E R SE RVI CE
information, such as regulators, analysts, wealth managers or investors, to easily gather, analyze, mash up and reuse data. Tax authorities outside the U.S. are already requiring organizations to use XBRL when reporting their financial information. It’s gaining traction in the U.S. for reporting financial information and also to help integrated reporting become a reality, where companies can report on both financial and nonfinancial info. The Big Four accounting firms are already hiring scientists and community relations experts to better understand how to engage with stakeholders of nonfinancial information” (xbrl.org).
n its most nascent state, the purpose of business intelligence is to assist in making the best possible decisions. And every accountant must decide when to only offer the minimum requirement of basic accounting services, or if they can broaden their services to offer deeper, far-reaching possibilities via business intelligence. But how? Here is a roundup of various companies (none of which I have any link to) that offer business intelligence software:
Sage 50 Accountant Edition 2013 This software offers more than 140 customizable reports, including Sage Peachtree Business Intelligence, a reporting and analysis tool integrated with Sage Peachtree. Using Excel, it enables more robust reporting, customization and easier access to Sage Peachtree data. Its strong reporting and business intelligence capabilities make it easy to deliver in-depth reports to provide
actionable advice and excellent client service, saving time and money in the process, through automation. Intelligence adds value by allowing CPAs to spend more time focusing on strategic analysis and interpretation and less time pulling the data together from static reports. It can transform a data capturing service into a strategic advisory service (peachtree.com/ quantum/industry/accounting).
XBRL This is not software itself. It is a free, globally accepted standard for electronically or digitally sharing information across the Internet and between computers. It provides context to the data that stays with it no matter how you cut and paste it. It offers context, such as currency, language, accounting standards, formulas and business rules. According to Brad J. Monterio, chair of the XBRL Committee at the Institute of Management Accountants, “XBRL helps those who use business NEW JERSEY CPA • MAY • JUNE 2012
Profitability is cloud-based software, allowing for multi-access, real-time syncing and updating. It allows accountants to extract deeper analytics out of their clients’ data (e.g., QuickBooks data) conveyed in plain English. Profitably can show actuals and also run scenarios: What if a client is considering a new product line? It also allows accountants to run a scenario and see what it does to cash flow, profit and loss statements, customer acquisition and channels. When accountants can do that, they're migrating from being a bookkeeper to a trusted business advisor. And when you're providing better insight, you become more valuable to your client (profitably.com).
Mindshop Mindshop bolsters business intelligence. It is a diagnostic tool that helps pinpoint key opportunities to increase growth and profit over a 12-month period as well as track progress. When engaged in a consulting relationship, this tool
enables firms to evaluate a client’s growth opportunities in a quantitative manner and better plan for long-term success (mindshop.com).
CALUMO and TimeXtender TimeXtender enables nontechnical users to access financial and nonfinancial data to create the data repository needed for financial management, budgeting and planning, and management reporting. CALUMO accesses the data repository using either Web or Microsoft Office
through an easy-to-learn toolset (mainly Microsoft Office, Excel). Implementation is a matter of days or weeks. It offers accountants the ability to help their clients implement business intelligence. Traditionally, business intelligence has been expensive and difficult to implement. Companies have engaged expensive business intelligence consultants with expertise in the specific product. Now, users can do it themselves (calumo.com and timextender.com).
Your small business is more than just a way to make a living, it is part of you. You put your heart and soul into it. You want to make it grow; you require capital to make that happen.
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Before you plunge in and transform your entire consultative approach with clients, tread slowly. Ensure that you fully test drive any system before you switch, and ask for referrals from other accountants who use the same system. Finally, tightly lock in the support system the company has, should you run into a jam.
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EX PE RT IS E
2012/13 Executive Committee Thomas F. Roche III, CPA
Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC President 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 president-elect, vice president and trustee. He was a member of the Finance, Meetings & Special Events, Nominating and Committee Operations committees; chair of the Insurance Trust; and trustee of the NJSCPA Scholarship Fund and NJ-CPA-PAC. 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 served as treasurer of the Westfield Police Athletic League and board member of the Stephen F. Mannuzza Foundation, Inc. He has been recognized as a 2011 and 2012 “Five-Star Wealth Manager” by New Jersey Monthly magazine. Roche earned his B.A. in accounting from Pennsylvania State University. He and his wife, Nancy, reside in Westfield and have a son, daughter and granddaughter.
Gerard Abbattista, CPA EisnerAmper LLP President-Elect
Gerard Abbattista, CPA, Partner at EisnerAmper LLP, Edison, joined the New Jersey Society of CPAs in 1985. He has served on the NJSCPA Board of Trustees as treasurer and trustee. He is a member of the NJSCPA Strategic Planning and Committee Operations committees and has served as chair of the Finance and the Scholarship Awards committees. In the Middlesex/Somerset Chapter, he has served as president and director. Abbattista is a member of the American Institute of CPAs and serves as board treasurer of Gilda’s Club of Northern New Jersey. Abbattista earned his B.S. in accounting from Seton Hall University. He and his wife, Debra, reside in Westfield and have a son and two daughters.
NEW JERSEY CPA • MAY • JUNE 2012
Brad E. Muniz, CPA
Sobel & Company CPAs, LLC Secretary Brad E. Muniz, CPA, Partner in Charge of Accounting and Auditing at Sobel & Company, LLC, Livingston, joined the New Jersey Society of CPAs in 1991. He has served on the NJSCPA Board of Trustees as treasurer and trustee. He was a member of the Volunteer Relations, Finance and Investment committees; former trustee of the NJ-CPA-PAC; and served on the Scholars Institute Advisory Board and Accounting & Auditing Standards Interest Group. In the Morris/Sussex Chapter, he has served as president, vice president, treasurer and director. He is a member of the PKF North America Network CPE Committee and vice chair of the Accounting & Auditing Committee. In his community, Muniz is a board member of the Milton School and treasurer for Family Intervention Services. Muniz earned his B.A. in accounting from William Paterson University. He and his wife, Diane, reside in Parsippany and have two daughters and a son.
Walter J. Brasch, CPA ParenteBeard LLC Treasurer
Walter J. Brasch, CPA, Regional Managing Partner at ParenteBeard LLC, NJ Metro Region, Clark, joined the New Jersey Society of CPAs in 1977. This is Brasch’s second year as treasurer. He has served on the NJSCPA Board of Trustees as a trustee. He is currently a member and past chair of the NJ-CPA-PAC; served on the Finance and Governmental Accounting & Auditing committees; and is on the Health Care and Accounting & Auditing Standards interest groups. 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 (CBA), board member and committee chair of the American Cancer Society and board member and treasurer of the Boy Scouts of America, Monmouth Council. He is a recipient of the CBA Alumnus of the Year Award and currently serves on the CBA Major Gifts Committee. 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, daughter and two grandchildren.
Carole A. Hedinger, CPA
New Jersey State Lottery Immediate Past 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 president, secretary, vice president and trustee; as chair of the Strategic Planning Committee; as an NJCPA-PAC chair and trustee; as a member of the State Taxation, Federal Taxation, and Litigation Support and Business Valuation Forensic Litigation Services interest groups; and 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 as a board member of 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.
NEW JERSEY CPA • MAY • JUNE 2012
Ralph Albert Thomas, CGMA
New Jersey Society of CPAs Executive Director Ralph Albert Thomas, CGMA, joined the New Jersey Society of CPAs in 1984 and began his service as NJSCPA Executive Director in 1999. He is a member of the American Institute of CPAs and serves on the AICPA PreCertification Education Executive Committee. He has also served on the AICPA’s Group of 100, Business and Industry Executive Committee, CPA Vision Project Team, Peer Review Executive Committee Board, Strategic Planning Committee and AICPA Council. Thomas is on the boards of the State Society Network Inc. (SSNI) and Shared Services LLC, a joint venture of the AICPA and SSNI; he also serves on the board of the CPA/SEA. Thomas is a member of Lehigh University’s Board of Trustees, College of Business Board of Advisors, Audit Committee and has served as president of Lehigh’s Alumni Association. Thomas also serves and/or has served on the Accounting Advisory Boards of both Rutgers and Seton Hall Universities. He is a board member of The ARC of Essex County and is a member and former president of the National Association of Black Accountants. Thomas was selected in 2010 and 2011 by Accounting Today as one of the “Top 100 Most Influential People in Accounting.” Thomas is also a member of the New Jersey Chamber of Commerce Cornerstone Initiative. Thomas earned a B.S. in business and economics and an M.B.A. from Lehigh University. He and his wife, Valerie, reside in South Brunswick and have a daughter.
Board of Trustees Trustees serving a three-year term expiring May 31, 2013:
Jose E. Bombino, CPA
Susan Burke-Leichner, CPA
Maryann Holloway, CPA
Kenneth Pogrob, CPA
KWC Partners, LLP
Terrence R. Mooney, CPA
Bowman & Company LLP
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
Trustees serving a three-year term expiring May 31, 2015:
William A. Cadmus, CPA
Michael W. Gutwetter, CPA
Robert P. Herman, CPA
Joseph A. Zielinski, CPA
Michael W. Gutwetter, CPA
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CPE Offerings and Events Upcoming Education Foundation Events Date
Multi-Topic Tax Conference (E1206150)
Mastering the Fundamentals of Estate Planning (E1206181)
Loscalzo's Using Tax Basis and Other Special-Purpose Frameworks Presentations Effectively (E1206081)
Professional Ethics for New Jersey CPAs (E1206081)
FASB Review: Common GAAP Issues Impacting All CPAs (E1206273)
XBRL and the New Era in Financial Reporting: Moving Beyond Theory (E1206283)
The Loscalzo Answer to Frequently Asked Questions in Accounting and Auditing (E1206091)
Annual Update for Accountants and Auditors (E1206291)
Medical Finances: Enhancing Your Value to a Medical Practice (E1206041)
Forensic Accounting Investigative Practices (E1206303)
Loscalzo's Deceptive Revenue Recognition and Other Accounting Techniques – Recognizing the Warning Signs (E1206103)
Loscalzo's Current Practice Issues and Solutions in Audits of Employee Benefit Plans (E1206111)
The Best Federal Tax Update Course by Surgent McCoy (E1206191)
Hot IRS Tax Examination Issues for Individuals and Businesses (E1206201)
Advanced Controller and CFO Skills (E1206313)
AICPA's Controllership: 25 Critical Lessons from the Trenches (E1206323)
The Top 50 Mistakes Practitioners Make and How to Fix Them: Individual Tax and Financial Planning (E1206211)
Bankruptcy Today: What Every CPA Must Know! (E1207183)
Mergers and Acquisitions Conference (E1207230)
Identifying Fraudulent Financial Transactions (E1207163)
Auditing for Internal Fraud (E1207173)
Loscalzo's A&A Staff Level 1 – Entry-Level Staff (E1207011)
OCBOA: Preparing and Reporting on Cash, Modified Cash and Tax-Basis Financial Statements (E1207071)
Real-World Fraud: War Stories from the Front Lines (E1207081)
Surgent McCoy's Practical Guide to Better Substantive Testing and Auditing of Internal Controls (E1207091)
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Upcoming Chapter Events Date
Real Estate, Construction Contractors Bonding and GAAP Developments (E1205109)
Installation Dinner – Cloud Computing (E1205089)
Disability Solutions for the Business Owner (E1205189)
Accounting and Auditing Update (E1205149)
Accounting and Auditing Symposium (E1205119)
Annual Scholarship Beefsteak Dinner (E1206059)
Estate and Trust Planning (E1206019)
Annual Golf Outing (E1206049)
New Jersey Law and Ethics (E1206179)
New Jersey Law and Ethics (E1207249)
New Jersey Law and Ethics (E1207069)
AA – Accounting & Auditing MC – Multiple Categories PE – Professional Ethics
KEY CS – Consulting Services MT – Management SK – Specialized Knowledge
EC – Economics PD – Personal Development TX – Taxation
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NJCPA Half_032.indd 1
NEW JERSEY CPA • MAY • JUNE 2012
4/4/12 11:35 AM
Get Involved Otherwise, you’re just going through the motions. Then, what’s the point?” Russell P. Guagenti, CPA.
(From left) NJSCPA Executive Director Ralph Albert Thomas, CGMA; Sharon Epperson of CNBC; Rosemary F. Ervin, CPA, of the Hunter Group, CPA, LLC; Diahann W. Lassus, CPA, M.B.A., PFS, CFP, of Lassus Wherley & Associates, P.C.; and NJSCPA President Carole A. Hedinger, CPA, of the New Jersey State Lottery; at the NJSCPA’s seventh annual Do It Herself conference. The day-long event, supported by the Financial Literacy Committee, attracted nearly 100 women who attended sessions on budgeting, estate planning, retirement planning and more.
Set Aside Your Volunteer Worries
Volunteering can be a little daunting, whether it’s your first time or your tenth. The New Jersey Society of CPAs asked members to address five common volunteer worries:
Lack of Time
“I’ve been able to become more efficient in how I do my work, allowing me time to volunteer. The dividends of involvement have always outweighed any added responsibilities,” James R. Blake, CPA. “We all have our work, family, friends and other social activities that we need to manage. Certainly, someone else will volunteer if I don’t. These are all excuses that we make to rationalize why we shouldn’t
volunteer. Most of us could easily volunteer at least one hour per month if there were no excuses,” Robert Es-Haq, CPA.
“Afraid you might end up doing more than you signed on for? That will usually happen when you’re enjoying the experience far more than you thought you would, and you’ll want to do even more,” Anthony J. Cucciniello, CPA. “You want to know what is expected of you and try to stay within those parameters. But if the time comes and you’re asked to do a little more, consider that it could enhance your visibility and show people that you’ll go above and beyond. Don’t volunteer and expect to do only the minimum requirements.
“Depending on the volunteer opportunity, you’ll be trained prior to participating or will be provided with all of the materials you need beforehand, so you’ll be prepared. Other volunteers and NJSCPA staff are knowledgeable, helpful and will support you,” Rebecca B. Fitzhugh, CPA. “You have to be aware of your own limitations, welcome assistance and delegate freely. Be a good team member by admitting that you need help, or acquiesce this time because perhaps someone else can do a better job,” Stefanie J. DeSantis, CPA.
“If a supervisor is encouraging you to volunteer in an area you just don’t care about, speak to him/her about getting involved in areas where you have a greater interest. You’ll be more committed and make a greater impact,” Edward G. O’Connell, CPA. “Find an issue you care about, and get involved. If you don't care about anything, then pick something in an area where you want things to change, and be a change agent for that cause. You never know where it might lead,” D. Geoffrey Small, CPA.
“That’s like saying you had a bad date so you won’t ever go on another. There’d be a
July/August Coming Attractions Leisure and Entertainment (L&E)
Magazine of the
New Jersey Society of Certified Public Accountants
n n n n
July • August 2012
What NJ Is Doing to Bolster the L&E Sector CPA Opportunities in the L&E Sector Interview with a Pair of Financial Devils The Celebrity Client
NEW JERSEY CPA • MAY • JUNE 2012
lot more single people if everyone took that approach!” Anthony J. Cucciniello, CPA. “Don’t volunteer to be acknowledged or get credit. That’s not what volunteering is all about. The reward is the self-satisfaction that comes from doing a good thing. I’ve gotten more than I invested every time I’ve put in a good effort for a good cause,” D. Geoffrey Small, CPA.
“Bring your experience to the new organization to help it avoid the problems of your past experiences,” Edward I. Guttenplan, CPA. So, admit it, there’s really no reason to be worried about volunteering. Learn how you can make a difference at njscpa.org/ getinvolved.
Get Involved Now
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 email@example.com or 973-226-4494 x251.
The Toshiba Thrive Tablet By Beth S. Brilliant, CPA I was on a hunt last June to replace my stolen netbook and Barnes & Noble Nook. A tablet seemed to be a logical purchase to replace both. The marketplace was flooded with new tablets to review, with each one having its own pros and cons. I then saw an article stating Toshiba was planning to release a tablet. As an avid Toshiba user, I decided to wait until July for the release of Toshiba's Thrive tablet.
What It Is
The pre-configured Thrive 10.1-inch multi-touch display tablet runs on the tablet-optimized Android 3.2 Honeycomb platform. Its mobile dual-core processor, the NVIDIA Tegra 2, enables extreme multitasking, faster full-featured web browsing, hardware-accelerated Adobe Flash, and console-quality gaming and higher-definition video with an NVIDIA GeForce GPU. The high-resolution (1280 x 800) LED-backlit display adjusts brightness and contrast to the surrounding light conditions. The Thrive contains the normal components that other tablets have, such as a five megapixel rear-facing camera with automatic focus and a 2.00 front-facing webcam with an integrated microphone. The Thrive is available in 8GB, 16GB and 32GB Wi-Fi models and includes a Bluetooth interface. The back panel of the Thrive is a black, rubberized surface that makes the tablet easy to grip. Six vibrantly colored interchangeable covers are available.
Ports, Outputs and Storage – The Thrive has a series of ports and outputs: mini USB port (for syncing), USB ports, headphone jack, microphone and power adapter connector. The two USB ports and the HDMI port are protected by a snap-shut, hard rubber cover. The Thrive comes equipped with an SD card slot that takes up to 128GB SDXC cards, becoming the first tablet to support the new storage format; one does not need the cloud to access data. You can practically store your entire computer or laptop on the device, including music, movies, images and documents. File Management – The built-in file management system makes
finding and accessing files in Honeycomb easier. It enables USB file copying, as well as file reading and writing to the built-in SD card slot. Pre-existing folders make it simple to manage and drop files, and you can preview JPEGs without going into the camera program. Downloading photos directly to the Thrive is extremely easy; the SD card goes directly into the provided slot, and a copy-and-paste command makes the tablet a digital picture frame. Connectivity – The Thrive can connect easily and seamlessly with keyboard, mouse, monitor and storage options, which is advantageous when using the tablet for business purposes. Making a presentation is as simple as plugging the tablet to the projector. No special software or equipment is needed. Email and Web – The Thrive has a great email and web browsing interface, familiar and functional to Chrome users. The browser allows you to do just about everything you could on a computer's web browser, within reasonable limits.
Bulky – While most tablets are light and thin, the Thrive fails here. It is 1.66 pounds and 0.63 inches thick, which makes it one of the bulkiest and heaviest tablets out there. Miscellaneous – Other cons are mostly cosmetic: the camera location, the volume switch is too close to the power button and the battery life is just okay. The Toshiba Thrive does exactly what I want it to do. It replaced my e-reader and netbook without losing functionality. The tablet enables me to download articles, organize them by topic and make comments. I love the full-size ports; I can copy material from my tablet to my thumb drive within minutes without worrying if I have an Internet connection or not. Beth S. Brilliant, CPA, CITP, is a member of the NJSCPA Technology Interest Group. Contact her at firstname.lastname@example.org or 908-868-9867.
NEW JERSEY CPA • MAY • JUNE 2012
orchard 6. Automated program 8. Kind of chart 9. Advice 10. Type of trader 11. Investigate 12. Computer invader 14. Increase 18. Compass direction 19. Statistical expert 23. Period for CPA review 24. Provokes 25. Personal finance software 26. ____ support 29. Business software in the cloud 31. Bring client data into a system 34. Put to work 35. What you do comes back to you 36. Levied
2. iPad program 3. Certificate of insurance, for short 4. Type of fund 5. Beams 6. See 25 down 7. Level 11. CCH accounting software (three words) 13. Beginner instruction in a subject 15. Need to pay 16. Light provider 17. Checking out 20. “What are you doing?” business site 21. Query 22. Numbered highway 25. Personal finance software (goes with six down) 27. Concept of use of the Internet for data and storage 28. Spreadsheet line 30. Roth, maybe 32. “Numb3 __” TV show 33. Computer department
1. Software program in an
1. Security fix
See the answers on njscpa.org/newjerseycpa.
Renew and Stay Connected with the NJSCPA There are many ways to stay connected and make the most of your New Jersey Society of CPAs membership. Whether you prefer an online or in-person relationship with the Society, you have options to help you advance your career, grow your business and be a champion for the profession. By staying connected you can: • Improve your technical skills and knowledge through quality CPE at members-only pricing. Courses are available through live instruction and webinars (njscpa.org/catalog). • Meet valuable new contacts through in-person meetings or on Connect, the Society’s online community portal (njscpa.org/ 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 (njscpa.org/ marketplace).
• Stay in the know with accounting trends and resources by reading New Jersey CPA, E-NEWS and other Society print and web publications (njscpa.org/news). • Stand with the more than 15,000 other local accounting professionals who are represented in Trenton on important legislation that affects you and your colleagues (njscpa.org/pac). • Give back and volunteer to write articles, moderate seminars, mentor future CPAs and represent the accounting profession in your community (njscpa.org/getinvolved). • Connect with an iPad! When you renew your membership by June 30, you’ll be entered to win an Apple iPad (32GB Wi-Fi enabled) or another tablet of your choice ($600 value) (njscpa.org/renew).
NEW JERSEY CPA • MAY • JUNE 2012
NJ State Board of Accountancy Report
Board Reaffirms Video in CPE Is Not Didactic Education Newark (February 16) Miscellaneous
The board received a request from the Registered Municipal Accountants Association requesting another test date be added for the RMA exam due to the timing of annual New Jersey school district audits. The board indicated that this would be too costly and burdensome. However, it will ask the association if there is a better alternative than the usual early December time period. The board noted that a change in the test date would require a change in the regulations. A representative from SmartPros protested the board’s recent ruling that its CPE courses do not qualify as didactic instruction according to the statutes and regulations because it utilizes a video component. Of particular concern to SmartPros were the courses its attendees took during the most recent triennial believing in good faith that these credits could possibly be counted toward didactic instruction. (Non-didactic courses are restricted to no more than 60 credits per triennial.) The board upheld its original ruling regarding SmartPros’ courses.
Furthermore, if and when any licensee is audited for credits taken in the previous triennial, the board will review him or her on a case-by-case basis. Both SmartPros and the NJSCPA expressed concern that this ruling will lead to confusion among CPE providers and licensees.
Ethics – The New Jersey Society of CPAs NJ Law & Ethics webinar was approved. RMA – Of the 14 people who took the recent Registered Municipal Accountants Exam, two had passed.
New Jersey Society of CPAs Executive Director Ralph Albert Thomas, CGMA, indicated that the Society will be monitoring the governor’s budget for any changes in tax policy. Thomas also raised the issue of firm registrations and when people need to register. The board used the example of a person in private practice who has a small tax business on the side. If that person includes “CPA” in his or her sole proprietor firm name, that person may be required to register as a firm. However, that person could instead use CPA in his/her signature line with no adverse effects.
Newark (March 15) Public
New Jersey Society of CPAs Executive Director Ralph Albert Thomas, CGMA, mentioned that the New Jersey Supreme Court overturned a lower court’s award of $31.8 million against KPMG. In a landmark case that included the issues of privity and standard of care, the Supreme Court’s unanimous decision essentially decided the issue of what an audit is really supposed to accomplish. Thomas called the ruling a big victory for the profession and something that the Society has been involved with for three years. The plaintiffs do plan to repetition the court. Thomas indicated that the Society is working on a position paper regarding didactic instruction, including suggestions and clarifications, which it will submit to the board. Andrew L. DuBoff, CPA, gave the board an overview of key issues at the National Association of State Boards of Accountancy per his involvement with the organization. These issues include foreign firms practicing in the U.S., independence issues in dealing with whistleblowers, acts discreditable to the profession and issues related to retired CPAs who wish to work on nonprofit boards.
audimation.com NEW JERSEY CPA • MAY • JUNE 2012
CLASSIFIEDS Mergers/Acquisitions The Curchin Group, LLC, a central NJ, Monmouth County firm is seeking to mergein 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 732-7470500 or email@example.com. Klatzkin & Company, LLP, an established firm with offices in Mercer County, NJ, and Pennsylvania is looking to acquire or merge-in small firms or sole practitioners in need of succession planning. We offer our clients an extraordinary and individualized level of commitment, a dedicated staff and a broad spectrum of available services. We work with a constantly expanding, diversified client base. Firms seeking growth and stability are encouraged to inquire. Reply to bsnyder@ klatzkin.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 firstname.lastname@example.org or 800-839-5767. 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 accountingpracticesales.com. Growing CPA firm with first-class marketing culture in central NJ is looking to expand its practice. Ideal merger candidates are sole practitioners or small firms with established niche focus and strong business development skills and/or in need of a succession plan. Reply in confidence to dcowan@ cowangunteski.com.
New Jersey – CPA firm wishes to acquire or merge with progressive, small to mid-sized firms. File 0701
Pro Bono Camden County Animal Shelter, Blackwood, NJ, seeks a CPA to serve on its board, providing financial oversight and assistance in budgeting and analyzing monthly financial statements. Expected commitment is less than five hours per month. Contact Michelle at 856-625-1043 or email@example.com. Union County Educational Services Foundation, Westfield, NJ, seeks accounting/ bookkeeping assistance for one or two days per month. Contact Dr. Robert A. Behot at firstname.lastname@example.org.
Professional Services Peer Review – Do you need a practical system or engagement reviewer? Obtain a free quotation at email@example.com. Audits – Does your client need an audit, but you don't provide audit services? You do the tax work, and I'll do the financials; contact firstname.lastname@example.org.
Real Estate Real Estate Appraising – Tax appeals, eminent domain, unusual properties, consulting, business valuations. Charles A. McCullough, CPA, M.B.A., State Certified General Real Estate Appraiser, American Society of Appraisers member: camcpavalue.com, renwickandassociates. com, email@example.com, 856-779-7050, 609-923-5879.
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 njscpa.org/ classifieds.
NEW JERSEY CPA • MAY • JUNE 2012
MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. ldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC RotenbergMeril WithumSmith+Brown Wilkin & Guttenplan, P.C. SES Leaf, Saltzman, Manganelli, Pfeil & Tendler, LLP PVH Corp. MSPC Certified Public Accountants & Advisors, P.C. Goldstein Lieberman & Co. LLC
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NJSCPA Celebrates 52nd Awards Ceremony T
he New Jersey Society of CPAs Scholarship Fund awarded more than $427,000 to 75-plus New Jersey high school and college students at the 52nd 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) Jeffrey Ritter ($5,000) Rowan University Eisner Amper LLP (Partner Level) Matthew Scorzo ($5,000) The College of New Jersey Lenore and Frederick Horn (In Memory Of) Nicole DeVita ($5,000) Liang Ren ($5,000) Fairleigh Dickinson University J.H. Cohn LLP (Benefactor Level) Danielle Bellomo ($5,000) The College of New Jersey Kyle Hartwick ($5,000) Rutgers University – New Brunswick John Lee (In Honor Of) Monica Swietlik ($5,000) Rider University NJSCPA Council of Past Presidents Award (Patron Level) John Vanore ($5,000) The College of New Jersey Rothstein, Kass & Company, P.C. (Benefactor Level) Christopher DeCerce ($5,000) Seton Hall University Angelika Mazur ($5,000) Montclair State University Smolin, Lupin & Co., P.A. (Partner Level) Facundo Zalazar ($5,000) Caldwell College
Paul Stahlin, CPA (In Honor Of) Molly Smith ($5,000) Montclair State University
Richard Stockton College of New Jersey Richard DiNapoli ($5,000) Jaime Fitzpatrick ($5,000)
Untracht Early LLC (Patron Level) Lyudmila Slyusareva ($5,000) New Jersey City University
Rider University Temitope Kamson ($5,000) Iram Khan ($5,000) James Kozik ($5,000) Cindy Maksimow ($5,000)
WeiserMazars LLP (Patron Level) Victor Cano ($5,000) Rutgers University – Newark WithumSmith+Brown (Benefactor Level) Emily Furey ($5,000) Monmouth University Catherine Rivas ($5,000) The College of New Jersey Z. Thaddeus Zawacki (In Memory Of) Tia Curtis ($5,000) Seton Hall University NJSCPA College Awards Kean University Raymond Micallef ($5,000) Monmouth University Ottaviana De Ruvo ($5,000) Maria Gliddon ($5,000) Elizabeth Regan ($5,000) Montclair State University Jake Salvatoriello ($5,000) Ramapo College of New Jersey Brandi Fodera ($5,000) Alexandria Gallipoli ($5,000) Elizabeth Nitzsche ($5,000) Caitlin Whitman ($5,000)
NEW JERSEY CPA • MAY • JUNE 2012
Rutgers University – Newark Ravi Bisumber ($5,000) Gurpreet Kaur ($5,000) Dency Kundra ($5,000) Mardochee Louis ($5,000) Nadia Patram ($5,000) Heena Rupani ($5,000) Rutgers University – New Brunswick Sophie de Koning-Teasdale ($5,000) Milica Gavrilovic ($5,000) Julie Goopta ($5,000) Kyung Herh ($5,000) Shaun Pande ($5,000) Andriy Partykevych ($5,000) Kushal Shah ($5,000) The College of New Jersey Raphael Carletti ($5,000) Amy Lis ($5,000) Kyle Ropp ($5,000) William Paterson University Linda Hoxha ($5,000) Minority Scholarships NJSCPA/Northern New Jersey-National Association of Black Accountants Chris Arthur ($1,000) Rutgers University – Newark Kevin Celisca ($1,000) Fairleigh Dickinson University
Chapter College Awards Atlantic/Cape May Chapter To be determined Mercer Chapter Mercer County Community College Olga Biriourov ($1,500) Alapi Desai ($1,500) Nehael Desai ($1,500) Purvi Dogra ($1,500) Alex Newman ($1,500) Carolyn Whetstone-Flin ($2,500) Scholarships Funded by the Big Four Accounting Firms (Awarded over four years) Deloitte Rachel Suntag ($8,500) Morris Knolls High School Ernst & Young LLP Derek Weisman ($8,500) Watchung Hills Regional High School KPMG LLP Monika Juzwiak ($8,500) Middletown High School North PricewaterhouseCoopers LLP James Celia ($8,500) Washington Township High School NJSCPA High School Awards Amounts range from $6,500 to $7,500 (Awarded over four years) Taylor Baton Cranford High School Alyssa Blochlinger Watchung Hills Regional High School Mark D’Annunzio Howell High School Jason Grossman Marlboro High School
Jody Lo Cherokee High School Taylor Lusardi Randolph High School Robert Mullen Cranford High School Elliot Naphtali Livingston High School Yogi Patel Old Bridge High School Dylan Peipert Marlboro High School Adam Ribakove Livingston High School Joshua Sarna Fair Lawn High School Kyle Smith Morris Knolls High School Gregory Stone Watchung Hills Regional High School Gerald Tigol Watchung Hills Regional High School Eileen Wong Holmdel High School Leonard Yeap Parsippany High School Samantha Zimmerman Howell High School
The NJSCPA would like to thank the following Scholarship Fund contributors for their generous support: njscpa.org/index/students/ full-article/2012/03/02/thank-youscholarship-contributors.
Adam Jeyschune Hunterdon Central Regional High School
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NEW JERSEY CPA • MAY • JUNE 2012
The Squeaky Wheel Does Get the Grease B Y GA I L ROS EN, CPA, GAI L RO SE N, C PA, P. C .
hy in the world would you take money from your pocket and give it to the New Jersey CPA Political Action Committee (NJ-CPAPAC)? What’s it going to do for you personally? Those are great questions. Well, here are some answers from a fellow CPA. The squeaky wheel does get the grease. Over the years, we’ve spoken up and asked legislators to support issues important to our profession. And, yes, it has worked. As CPAs, you and I know every deal must be a win for both parties. One of the reasons we get support from legislators is because we help those who’ve helped us. We help get pro-CPA legislators elected, and they try to help us with our legislative agenda. That’s what I call a win-win. So, how does this help you personally? Major victories that unquestionably helped you were our successful efforts to defeat legislation that would have placed a $50 annual surcharge on the CPA license and blocking several attempts by lawmakers to include a sales tax on our profession. These victories saved you cold hard cash.
Do you know any of these lawmakers? Join our Keyperson Program Chris A. Brown Christopher J. Brown Anthony M. Bucco Jr. Marlene Caride Jack M. Ciattarelli Robert Clifton Sean Connors John DiMaio Tim Eustace Angel Fuentes DiAnne Gove Angelica Jimenez
Charles Mainor Greg McGuckin Gabby Mosquera Jason O’Donnell Teresa Ruiz Holly Schepisi Robert Schroeder Troy Singleton Shavonda Sumter Connie Wagner Gilbert Wilson Benjie Wimberly
We urge you to join the NJSCPA Keyperson Program if you have a relationship with any of the these lawmakers. By relationship, we mean anything from casually knowing the legislator because you live in the same neighborhood or attend the same church, to sharing a closer relationship based on longstanding personal or business ties. Being a Keyperson is simple. About once a year, we’ll ask you to communicate the Society’s position on an issue to the lawmaker. You don’t need to be an expert. We provide you with talking points or a sample letter, and NJSCPA staff is available to answer any questions they may have. To become an NJSCPA Keyperson, contact Jeff Kaszerman at 973-226-4494 x210 or firstname.lastname@example.org.
NEW JERSEY CPA • MAY • JUNE 2012
The PAC also helps your clients and the business community. In 2011, we were instrumental in the passage of single sales factor legislation that eliminates property and payroll as factors and bases the corporate business tax solely on sales. We also helped pass a bill allowing small business owners who pay taxes through the personal income tax to carry forward net operating losses (NOLs) for 20 years and offset gains and losses from one category of income to another. Passage of other state tax reform measures included extending NOL carryovers from seven to 20 years and repealing the regular place of business and throwout rules. You might be a Republican, Democrat or an independent, but the PAC is nonpartisan. It supports candidates who are good for the profession, regardless of which party they belong to. The only concern is whether the candidate will have a positive impact on legislation affecting CPAs and the business community. The last thing CPAs need is to be ignored during the legislative process. When Society representatives meet with legislators, two questions often come up. How large is your membership, and what percentage of your membership contributes to the PAC? Legislators want to know how politically strong CPAs really are. And having a strong PAC is a good sign that we’re vigilant in protecting our interests in the political process. The PAC needs your contribution – no matter the size – so that it can represent a large percentage of the CPA community and so that we have enough funds to support the candidates who support us. It’s easy to contribute. Simply go to njscpa.org/ pac and contribute any amount you’re comfortable with. Remember, we need to stand together as CPAs to protect our profession. Gail Rosen, CPA, is the principal of Gail Rosen, CPA, P.C. She is a member of the New Jersey Society of CPAs Federal and State Taxation interest groups and chair of the NJ-CPA-PAC. Contact her at grosen@ gailrosencpa.com.
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 2012
By Any Means Necessary BY DAVID PLASKOW, NJSCPA PUBLIC ATIONS EDITOR
ob Marley, Tom Petty and U2 all sang about it, but Emily K. Vu, CPA, actually lived it: being a refugee. “I get a little upset when people here say bad things about America,” says Vu, “especially after seeing the alternative.” Vu was born in Ho Chi Minh City (formerly Saigon), Vietnam, only two years after the South was absorbed by the Communist North. With her father and uncle spending time in prison for being on the side of the losing government, Vu’s parents knew this persecution would extend to their children and deny them opportunities at a better life. This led to a fateful decision in 1986 for the family to flee Vietnam. “We couldn’t all leave at once,” notes Vu. “If we did, the government would seize our assets.” So began an epic journey in which Vu’s father and her three brothers blazed a trail to freedom in the U.S., only to be reunited with Vu and her mother more than six years later. The Vus accumulated some wealth in a Communist country by running a jewelry store. Their funds would come in handy to bribe Communist officials and ultimately pay for their means of escape. “My mother paid three thousand dollars in gold to an ‘organizer’ to get us out of Vietnam,” recalls Vu. In 1990, Vu and her mom, along with other refugees, took a bus from Ho Chi Minh City to Cambodia and stayed at a safe house for the night. The next day, they walked several miles to the train station bound for Cambodia’s capital, Phnom Penh. However, on the way, the organizer yelled for the group to jump from the moving train into the tall grass. “After we jumped, we heard gunfire in our direction,” says Vu. “To this day, I have a fear of
tall grass that may hide snakes.” After traversing a dense, unfamiliar forest, the group reached the coast and the next mode of transport: a creaky boat of questionable seaworthiness. After a four-day trip on rough seas where you could often hear praying, the group reached Malaysia and the next stop, a United Nations (U.N.) refugee camp. “There were about 29,000 people at the camp with 25 people to a room, and we each had about a half a meter of space,” describes Vu. “We got some food, water and clothing from the U.N., but without my father sending us money each month to purchase supplies, we would’ve had barely enough to live on.” Due to administrative red tape and the slow wheels of bureaucracy, Vu and her mom spent more than three years at the Malaysian camp before being given a choice to settle in the U.S., Canada or Australia. “Almost everyone picked the U.S.,” says Vu. Finally, keeping a promise between Vu’s parents, the family was reunited in the U.S. Vu embraced her new education system and went on to graduate from Stockton College with a B.S. in 1998, earn the CPA designation in 2001 and receive an M.B.A. from Monmouth University in 2002. “I owed it to my parents to take my education as far as I could,” comments Vu. Vu worked in industry until 2004 and then moved into the audit department of her alma mater, Stockton College. She also taught accounting at Stockton and at Lincoln University NEW JERSEY CPA • MAY • JUNE 2012
in Pennsylvania. Vu loves education so much that she originally wanted to be a teacher. “I asked my family what they thought, and they said I might have a problem with the language barrier,” recalls Vu. One brother suggested the medical field, but that didn’t appeal to Emily. So, her oldest brother half-joked, “You’re Asian, you should be good with numbers, why not accounting?” She gave it a shot and liked it from day one. “I connected with it and understood its importance,” says Vu. “Accountants are always needed, in good times and in bad.” Vu joined the New Jersey Society of CPAs in 2006 to “go as far as possible.” That same year, Vu opened her own practice, which specializes in tax controversies. When she has some spare time, the Egg Harbor Township resident likes to ride her bike and go the beach with her husband and two young sons. “My parents sacrificed and raised us well, not necessarily to be big people in society, but good people,” notes Vu. “And I want to raise my kids the same way. The sky really is the limit in this country.”
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This issue of New Jersey CPA features an interview with Robert F. Kennedy Jr.; the latest tablet apps to improve efficiency; and steps to ad...