November | December 2023 | Vol. 19 No. 5 A publication of the Wisconsin Institute of CPAs | wicpa.org
RADICAL GRATITUDE Victoria Thayer, CPA | 6
Plus: AI and talent recruitment | 12 Employee retention credit | 16 Accommodating mental illness | 20 Passwords and cybersecurity | 26
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A publication of the Wisconsin Institute of CPAs | wicpa.org
November | December 2023 Vol. 19 No. 5
6 Features
Columns
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26 TECHNOLOGY Are secure passwords still a thing? If traditional password policies aren’t effective in protecting your data, what are the alternatives? By Susan Firriolo, CPA, CISA
Radical gratitude Victoria Thayer, CPA, started out as a chemical engineering major — until she found accounting. She is a proud Latina and hard-working entrepreneur who is grateful for the many opportunities that have led her to her current role as a CPA firm owner. By Marcia Tillett-Zinzow
12 Is AI the solution to recruiting accounting talent? Artificial intelligence could reduce the time and costs of hiring, but what risks accompany this new approach to acquiring accounting talent? By Annie Mueller 16 The latest on the ERC The employee retention credit (ERC) has created challenges over the last three and a half years for businesses, accountants and even the IRS. By Jim Brandenburg, CPA, MST 20 Accommodating mental illness in the workplace Mental illness and physical injuries are equally recognized under the law as disabilities, but accommodating one can be far more challenging than the other. By James R. Macy, JD
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30 HUMAN RESOURCES Seven talent acquisition and retention strategies for this candidate-driven market Understanding that retention starts in the recruiting process can help you succeed with both. By Daniel Keith 34 TAXATION The future of sales tax: Trends and predictions Understanding new developments is crucial for tax professionals to navigate the complex and dynamic nature of sales tax regulations. By Holly Hoffman 38 LEADERSHIP The costs of conflicted investment advice Retirement plan participants will ultimately face the crucial decision of what to do with their retirement savings. They deserve objective advice. By Joseph Topp, CPA On Balance
26 Departments 3
Outlook | chair’s letter
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In Touch | president & CEO’s message
24 Welcome | new members 28 Memorials | departed members 36 Kudos | members in the news
November | December 2023
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On Balance is published five times a year by the Wisconsin Institute of Certified Public Accountants (WICPA). Change of address should be sent to: Membership, W233N2080 Ridgeview Pkwy, Suite 201, Waukesha, WI 53188; Phone: 262-785-0445 or 800-772-6939; Fax: 262-785-0838; email: comments@wicpa.org. Statements and opinions expressed are those of the authors and not necessarily those of the WICPA. Publication of an advertisement does not constitute an endorsement of the product or service by On Balance or the WICPA. Articles may be reproduced with permission. © Copyright 2023 On Balance.
2023-2024 WICPA OFFICERS/BOARD MEMBERS
INSIDE STAFF
Chair Matthew J. Schaefer, CPA, CGMA
President & CEO Tammy J. Hofstede
Chair-elect Ryan J. Hanson, CPA, CGMA
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Past Chair Steven A. Pullara, CPA, CGMA
Advertising Sue Daniels
Secretary/Treasurer Lucien A. Beaudry, CPA, JD
Editor Marcia Tillett-Zinzow
Directors Christopher M. Cholka, CPA, CGMA Jessica B. Gatzke, CPA, MST Tori M. Morrow, CPA, CGMA, MBA Donna R. Scaffidi, CPA Stacy A. Stinson, CPA
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OUTLOOK | CHAIR’S LETTER “The presentations and related material are built to create an understanding of changes to accounting and financial standards and recent tax updates.”
Fall: A Great Time to Reset Our CPE Goals By Matthew J. Schaefer, CPA, CGMA
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isconsin fall mornings can be a good time to reflect on the changes in our lives. My family has always enjoyed autumn, with a new school year, sport functions, harvest and Badger football. The dark mornings and the early sunsets do seem to disable our motivation to tackle unfinished tasks that have accumulated over the past year. In contrast, the changes in daylight, schedules and environment do remind me that change is inevitable. This time of year is also a soft reset in my own continuing professional education (CPE) calendar. I have always enjoyed the opportunity to attend a WICPA seminar or a conference any time of year, but the fall events have a different focus for me. I recently attended the Business and Industry Fall Conference and was able to talk to other WICPA members and some of the presenters throughout the day. I enjoyed the luncheon and the chance to discuss and learn about the opportunities and risks facing members in different industries. These events create an opportunity to expand your peer group or deepen relationships with other professionals that you have made contact with over the years. The foundation of these events is built by the work and dedication of the planning committee members and WICPA staff. These individuals meet months before a conference to discuss content, review current issues that impact attendees, and build an agenda with appealing topics. The finished product is content and presentations that provide attendees with current and relevant information from subject matter experts. How do you effectively learn and retain new content? The presentations and related material are built to create an understanding of changes to accounting and financial standards and recent tax updates. The information conveyed by the presenters provides a new and/or different perspective to the learning of the material. These different perspectives can create
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a new level of learning material, and if you have a similar learning style to mine, you may need to read or listen to the same information multiple times in order to assimilate it. These seminars and conferences also provide me with the realization that I’m not the smartest person in the room based on accounting and financial matters. The patience to listen to the presenters and stay open-minded with a different perspective provides another way to understand this information. If you haven’t attended an in-person CPE event in a while, consider how you could benefit from this investment in your career. When is your next continuing education event? Matthew Schaefer, CPA, CGMA, the 2023–2024 chair of the WICPA board of directors, is senior vice president/chief credit officer for the Bank of Wisconsin Dells. Contact him at 608-254-3624 or mschaefer@dellsbank.bank.
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IN TOUCH | PRESIDENT & CEO’s MESSAGE “I sincerely hope you will join us in this initiative because you’ll not only contribute to the growth and strength of our profession but also influence the leaders of tomorrow.”
November is CPA Appreciation Month Celebrate Being a CPA, and Help Make a Difference! By Tammy J. Hofstede
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ICPA members, firms and companies are the economic engines of our state’s economy. With high standards of ethics and professionalism, CPAs are critical to the vitality and prosperity of the state and responsible for the fiscal health and well-being of individuals, businesses and institutions. We count on CPAs every day of the year, and so does Wisconsin. I’m very excited to announce we have worked with Gov. Tony Evers to proclaim November 2023 as CPA Appreciation Month in Wisconsin. We are proud of the work you do, the difference you make and the way you represent our CPA profession. We celebrate and thank YOU, our members! It is also more important than ever to recognize the importance of CPAs to our communities and businesses and support outreach efforts to future CPAs. With the challenges our profession continues to face, we need to not only advocate but also do everything we can to help it grow. As part of our CPA Appreciation Month initiative, we are taking the opportunity to increase awareness of the opportunities an accounting career provides. In interviews with WICPA members about their pathways into the profession, a consistent theme emerged about how impactful it is for members to reach out to others about the profession, especially students. As part of CPA Appreciation Month, I am asking YOU to give back to the profession and volunteer some
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CELE
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CPA APPRECIATION MONTH NOVEMBER 2023 of your time to go into high schools this November to talk about the career opportunities available in accounting. We have made it very easy for you to participate — in just three easy steps! All you need to do is: 1. Reach out to your own contact, or send our pre-written letter to one or more high schools you’re interested in speaking at. 2. Schedule a day and time with the school(s) and/or teacher(s) to speak to a class. 3. Then let us know by completing the CPA Appreciation Month Volunteer Form.
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Once we receive your form, we’ll provide everything you need, including a presentation, resources and fun gifts for students and educators. I sincerely hope you will join us in this initiative because you’ll not only contribute to the growth and strength of our profession but also influence the leaders of tomorrow. YOU can make a difference! Want to learn more about Wisconsin CPA Appreciation Month and volunteer? Go to wicpa.org/CPAmonth. Tammy J. Hofstede is president & CEO of the WICPA. Contact her at 262-785-0445 ext. 4518 or tammy@wicpa.org.
CPA Appreciation Month Proclamation WHEREAS; certified public accountants (CPAs) play an important role in ensuring the fiscal health and well-being of people, businesses and institutions across Wisconsin; and WHEREAS; charged with providing accounting and auditing services, management advisory services and individual as well as corporate tax and financial planning advice, CPAs are essential to the vitality and prosperity of our state; and WHEREAS; CPAs in Wisconsin draw upon their unique knowledge and experiences to provide sound, reliable financial counsel that protects and promotes the growth of our businesses, the soundness of our government operations, the excellence of our higher education institutions and the confidence of investors in our state and throughout our country; and WHEREAS; Since 1905, the Wisconsin Institute of Certified Public Accountants (WICPA) has worked to enhance the growth and development of the CPA profession as a vital protector of the public interest; and WHEREAS; this month, the state of Wisconsin joins the WICPA in recognizing the importance of CPAs to communities and businesses and supporting the outreach efforts for future CPAs. NOW, THEREFORE, I, Tony Evers, Governor of the State of Wisconsin, do hereby proclaim November 2023, as
CPA APPRECIATION MONTH throughout the State of Wisconsin, and I commend this observance to all our state’s residents.
WHEREA S; certified
health and
public accou ntants (C people, bu sinesses and PAs) play an importa nt role in ens institutions across Wisco uring the fisc services and nsin; and al with provid individual ing accounting as well as cor the vitality and aud and prospe po itin rate tax and rity of our financial pla g services, managem state; and ent advisory nning advice , CPAs are ess WHER ential to vide sound EAS; CPAs in Wisconsi , reliable fin n draw upon anc soundness of our govern ial counsel that protec their unique knowled ge ts confidence ment opera of investors tions, the exc and promotes the gro and experiences to pro wth in our state ellence of ou and through r higher edu of our businesses, the out our cou cation institu WHER ntry; and tions and the has worked EAS; Since 1905, the Wisconsin to enhance Institute of the growth public intere Ce and develo st; and pment of the rtified Public Accounta CPA profes nts (WICPA sion as a vit ) WHER al protector of the tance of CP EAS; this month, the state of Wi As to commu sconsin joi nities and ns the WICP businesses A and suppo rting the ou in recognizing the im NOW, TH treach effo EREFOR rts for future porE, I, Tony Evers, Gover CPAs. do hereby proclaim No nor of the State of Wi sconsin, vember 202 3, as well-being of
WHEREA S; charged
CPA APPR
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Photography by Rick Swearingen 6
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RADICAL
GRATITUDE By Marcia Tillett-Zinzow
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ictoria Thayer, CPA, is a driven woman. As a new business owner, she often starts her day at 2:30 a.m. and doesn’t end it until late in the evening. She does, of course, take meal breaks and time to spend with her husband, Peter. But getting her business — Novii CPA in Madison — off the ground and growing is her current main goal. She started the business in May, has one part-time and five full-time employees (as of Oct. 5) and big plans for the future of her company. “My vision is to grow into a mid-size firm, with 40 to 50 employees and four or five partners, that serves entrepreneurs in the Midwest. That’s my goal for seven years down the road,” Thayer said. At the pace she’s going, she won’t have any trouble reaching that goal. She has a plan, and she’s determined to get there. The name of her business, Novii (pronounced no-vee), is a combination of “novus,” the Latin word for new, and the Latin word “visio,” which means vision. The extra i at the end of Novii “is just to give it an edgy and techy feel,” she said. Thayer came to this country from Caracas, Venezuela, in 2010 to attend Rochester University in New York as a chemical engineering major. She holds dual bachelor’s degrees in chemical engineering and business. “I liked chemical engineering, but I didn’t think it was my true calling. I was starting to take some business classes, and I was really enjoying them. So I decided to stay in college one more year and finish with a dual degree,” Thayer said.
An angel mentor The encouragement for her to stay that extra year was provided by Thayer’s mentor and “angel,” as she puts it, a Latin American businessman by the name of Alejandro Zapata. Zapata owns the house where Thayer grew up with her mother and her aunt. Her mother worked there as a maid and her aunt as a cook. (Now Thayer is able to support
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Thayer works with Daemon Kelley, a new staff member.
them financially, and they don’t have to work anymore.) She is an only child and has never met her father. Zapata was impressed with how hard-working Victoria’s mother and aunt were, and he saw the ambition and potential Victoria possessed as she devoted herself to her studies in school. He was so impressed that he gave her a scholarship to a private high school in Caracas and then sent her to college in the U.S. so she could pursue the opportunities this country has to offer.
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Photo by Janet McMillan
Thayer attended the 2023 WICPA New CPA Banquet.
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Keeping track of her busy schedule can often be time-consuming.
“From the beginning, he has always been there, supporting me and rooting for me,” Thayer said. “Even now that I have opened my own practice, he is there for me,” she said. “He does this even though he comes from a totally different world, and my family was not really part of that world, and he doesn’t have to do any of this. I always think of him as an angel that God sent my way and who has allowed me to find all these opportunities.”
An amazing journey Thayer was 18 years old when she came to the U.S., and she confessed that English was not her strong suit. But she worked hard at her English as a Second Language classes, recording the lessons and listening to them multiple times at home. Exposure to American culture also helped build her language skills, and she finally reached a level where she could understand everything.
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The thing I love about the WICPA is the networking, getting to know other CPAs and just, like, bouncing ideas off one another. That has been very cool.
“So after that, it has just been an amazing journey! I have met so many amazing people,” she said. She has met many of them through the WICPA. Thayer is a very active member and sits on several committees, including Young Professionals, Federal Taxation, Public Policy and the Tax Conference Planning Committee. She enjoys participating in events like Bowling Night and the New CPA Banquet. Thayer also was the recipient of the WICPA’s Young Professional Excellence Award this year. “The thing I love about the WICPA is the networking, getting to know other CPAs and just, like, bouncing ideas off one another. That has been very cool,” she said. One of the “amazing” people she has met is Steve Pullara, CPA, CGMA, a partner with BDO USA P.A. and the past chair of the WICPA board of directors. Pullara has become a mentor to Thayer and has helped her navigate some of the bumps that are characteristic of a small business startup.
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“Steve has been so generous with his time and his willingness to share his knowledge,” she said. “I feel like my business is so small that some people don’t take me seriously, and they think my work is less valuable. And Steve is like, What you see as a disadvantage is actually quite an advantage. If they go to a bigger firm, it’s only going to be the first-year people doing all their work. The partner will only see the very high-level clients. But at Novii, they’re getting the owner as the first response for everything. How much value is that! He gave me a completely different perspective, and I’m very thankful for that.”
Photo by Janet McMillan
Thayer is also a member of the American Institute of CPAs (AICPA) and is one of only 36 CPAs chosen by the AICPA to participate in the Leadership Academy’s 15th graduating class. Selections are based on exceptional leadership skills and professional experience. The four-day Leadership Academy program will be held December 11–14.
Finding her why Thayer met her husband, Peter, in college, where he was working on a master’s degree in chemical engineering. When Epic Systems came to the university to recruit, they made Peter an offer. “So we got married the day after graduation, and we moved to Madison,” Thayer said. “My mother and my aunt came, and Alejandro came to the U.S. just to walk me down the aisle.” Once settled in Wisconsin, Thayer got her first taste of accounting, working as a cost accountant at WPS Insurance. And she was hooked. “It was like, wow!” she said. “This really makes sense, and I really enjoy it!” But the one thing she didn’t like about her job was the challenge of communication that is inherent in a big corporation. Now she was facing a moment of truth: She knew she liked accounting, but she didn’t like working in private accounting. So she thought she’d try public accounting. She went to work as an auditor for Strohm Ballweg, a Madison-area firm that works exclusively with insurance companies. While she said it was “a lot of fun,” she grew weary of the traveling that came with the job. In addition, the clients were all large insurance companies, and Thayer wanted to work with smaller companies. Her next step was a job with Verhelst CPA in Oregon (Wisconsin), where she had her first experience working with taxes and financial statement preparation — and that was like turning on a light in a dark room. “I just jumped into it, and I felt at that moment, This is what I’m meant to do,” she said. “That was when I found my why. That term comes from the author Simon Sinek, who explains that your why is like your purpose. After I found it, even though I worked at different firms, I was always true to
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Victoria Thayer and her husband, Peter, attended the 2023 WICPA Member Recognition Banquet, where she was recognized with this year’s WICPA Young Professional Award.
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I was always true to my why , which for me is to provide financial security to small businesses and entrepreneurs so they can achieve their goals. my why, which for me is to provide financial security to small businesses and entrepreneurs so they can achieve their goals.” That’s also when she decided to pursue the path to CPA, and — as is characteristic of Thayer — she did so with vigorous determination. She would wake up at 2:30 a.m. to study until 7 a.m. and then go to work, and when she came home from work about 6 p.m., she would eat dinner and then study from 7 to 9:30 p.m. She did this every day for a month to get through the Becker CPA Exam Review. And then, within four months, she passed all four parts of the CPA Exam on the first try. She took the last exam in November 2021 and was licensed in January 2022.
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Giving back As noted earlier, Victoria Thayer is a driven woman. She is driven to succeed for many reasons, but one of the most important ones to her is to give back as an act of gratitude for all she has been given — by her mother and aunt, who have always been her center; her husband, Peter, who is always there for her; her angel mentor, Alejandro Zapata, who financed her education and continues to provide encouragement, advice and guidance; her new CPA mentor, Steve Pullara; and the WICPA. “That’s why I work so hard and try to do my best at everything, because I have been so blessed to have these people in my life and to find all these opportunities. I want to do something with my life and to give back in a meaningful way,” she said.
That’s what I want in 10 or 20 years, or when I’m 50 — to be in a position to create opportunities for the next generation of people who are trying to get out of their circumstances. Just like me.
She has already started giving back as a board member and/or volunteer with several nonprofit organizations: the Madison Reading Project, Big Brothers & Big Sisters, the Wisconsin Women’s Business Initiative Corporation and the Wisconsin Latino Chamber of Commerce. Thayer said she is proud to be Latina, and one of her goals is to help increase financial literacy within the Latin community through the nonprofit organizations she works with. Empowering other Latinos is a key part of her why.
“I hope someday I can afford to help someone and pay for their college and bring them here — maybe create a scholarship for people who come from different types of backgrounds. So that’s what I want in 10 or 20 years, or when I’m 50 — to be in a position to create opportunities for the next generation of people who are trying to get out of their circumstances. Just like me. That’s the end goal.” Marcia Tillett-Zinzow is a Wisconsin freelance writer and editor. Contact her at mtzinzow@icloud.com.
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2024 WICPA
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NOMINATE SOMEONE YOU KNOW FOR AN EXCELLENCE AWARD! H Accounting Educator H Community Service H Accounting Student H Distinguished Career H Business & Management H Diversity & Inclusion H CPA in Public Practice H Woman to Watch H Young Professional Submit your nomination at wicpa.org/awards by Nov. 10, 2023. Recipients will be announced in January and honored at the Member Recognition Banquet & Annual Business Meeting on May 9, 2024.
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Is AI the Solution to Acquiring Accounting Talent? Artificial intelligence could reduce the time and costs of hiring, but what risks accompany this new approach to acquiring accounting talent?
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By Annie Mueller
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ecruiting in any industry is a bit of a numbers game. Finding the best candidate for a role means sorting through hundreds or maybe thousands of résumés to screen potential candidates — and that’s only the beginning of the hiring process. For each short-listed candidate, hours of interviews, multiple discussions, follow-ups and documents may be required before a formal offer ever materializes. Meanwhile, the accounting and finance profession has been in a hiring crisis for years; there are fewer accounting majors and fewer accounting graduates becoming CPAs, according to the AICPA’s “2021 Trends” report. The smaller talent pool is also exacerbated by the growing number of accounting retirees: 75% of accountants will be eligible to retire in the next two to three years. Of course, these compounded issues only increase the pressure on hiring managers, recruiters and human resources (HR) professionals who are already maxed out. A recent survey from KarmaCheck and Findem found that 73% of HR leaders experience burnout directly related to the hiring process. The recruiting process is tough for candidates, too. They’re worn out by application requirements and stressed out by uncertainty. When a candidate experiences poor communication or follow-up delays, there’s no guarantee they’ll wait instead of walking. Therefore, it’s not surprising that organizations are keenly interested in tools to improve the laborious aspects of identifying and hiring the top candidates. One attractive and increasingly popular solution to this challenge is the use of artificial intelligence (AI) technology that mimics human intelligence to perform, automate and improve tasks (i.e., a computerized decision-making model). According to a March 2023 Forbes article, “How AI-Powered Tech Can Help Recruiters and Hiring Managers Find Candidates Quicker and More Efficiently,” many businesses today are using AI to: • Identify potential candidates who may not have even applied for the job. • Screen large volumes of résumés, matching job requirements with candidates’ qualifications and experience. • Analyze candidate data, including résumés, social media profiles and online behavior. • Engage with candidates using chatbots to help with and answer questions about the job or application process. • Conduct pre-screening interviews.
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It’s not surprising that organizations are keenly interested in tools to improve the laborious aspects of identifying and hiring the top candidates. However, despite AI’s overwhelming potential, experts warn it’s not all good. “There are several considerations around AI, and people are wary about it,” says Elizabeth Pittelkow Kittner, CPA, CGMA, CITP, DTM, vice president of finance at GigaOm. “We need to figure out how people can use AI resources in ways that are beneficial.” When considering AI’s potential use for hiring practices, a good place to start is to understand where the possibilities of AI meet their limits.
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Human oversight is incredibly crucial. Anytime you are using AI, ensure people are reviewing the work. – Elizabeth Pittelkow Kittner, CPA, CGMA, CITP, DTM
A tool, not an employee Chris Denver, CPA, director of accounting and reporting advisory for Stout, says the use of AI in business isn’t anything new. What’s new is the interface that makes it very easy for anyone to use. For example, the conversational format with today’s AI programs, such as ChatGPT, makes it seem like you’re chatting with another person, albeit one who occasionally makes bizarre statements and doesn’t mind answering the most inane queries. Denver cautions that AI isn’t and shouldn’t be treated as a staff replacement. “People may assume when they’re interacting with AI that it’s omniscient, but it’s not — it’s built by fallible humans based on fallible data sets.” Kittner also warns that sometimes the responses we receive from AI are inaccurate or no longer relevant, which is a special concern when using AI to help craft job descriptions or other hiring documents with compliance considerations. “We know that tools like ChatGPT aren’t up to date. ChatGPT currently has limited knowledge of events after 2021, and the laws are changing all the time.” Beyond potential accuracy issues, users need to remember that AI can’t be tasked with decision-making, subjective assessments or nuanced communication. While AI can process data faster than any human, it’s important to remember that faster isn’t the same thing as smarter. “AI tools are still evolving. They are certainly helpful; however, they are not perfect,” Kittner says. “Human
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oversight is incredibly crucial. Anytime you are using AI, ensure people are reviewing the work.” As organizations identify which parts of the hiring process can be shifted safely to AI, it’s important to examine AI’s ethical limits, as well.
Data isn’t neutral The appeal of AI is its ability to process vast amounts of data in very little time; the processing power far exceeds anything a human brain can accomplish. But it’s important to note that data isn’t neutral. Even if AI is trained on factual information, the selection of those facts can be biased. AI has no built-in ethical barometer by which to measure the data it’s given — bias in means bias out. “AI takes a huge data set and distills it to the next logical thing, the next expected expression in the conversation,” Denver explains. “But it’s not able to necessarily improve it or be objective about itself.” For hiring practices, these biases might result in small mistakes, such as rejecting an applicant who’s actually a great fit because a few key words were missing from the résumé, or much more serious mistakes, such as exhibiting gender or racial bias. To avoid these mistakes, Kittner advises that those “using the tool need to know the potential biases and build a human review component into the process of using the AI tool.” Countering bias is just one important consideration; another is protecting confidential data. “You have to keep
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and disclosures so that people know that AI is being used and that those who are using it understand the tool, are well trained on it and know the pitfalls.” Here are four steps to take when implementing AI in your organization: 1. Evaluate your organization’s recruitment process from beginning to end, and identify the areas where it needs to improve. Not sure? Ask the last hire — they’ll have an opinion. 2. Assess the scale of each identified need. Denver stresses that organizations will get more value out of AI when using it to automate and streamline high-volume rather than one-off tasks. “As you would with other tools or software, do a cost-benefit analysis for these AI products.”
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We’re seeing interesting opportunities with AI to leverage time better, and that’s only the beginning. – Chris Denver, CPA in mind that AI is taking your information and contributing it to a big pot of other information,” Denver says. “So, the security issues are pretty broad.” He cautions that it might be better for firms to wait on AI implementation another year or so, until there’s been more development and options to keep data secure. In the meantime, operate under the assumption that anything shared with AI also gets shared with a much wider audience.
The costs of implementation Accounting professionals know the danger of hidden costs. When implementing AI, leaders need to consider everything from the price of the software to the ongoing cost of training, governance and mitigating security risk. “Governance is important for any process you have, and to ensure ethical behavior, policies and procedures should be written and followed,” Kittner says. “Set up documentation
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3. Consider the nature of the information involved in each task you’d want to automate. Then determine the security measures needed to protect that information. 4. Establish clear responsibility for who’s overseeing AI use, and get input from all the key players before implementation. Kittner says to make sure there’s copious communication around AI: Who’s using it, why are we using it, and does it make sense with our corporate strategy? “These are conversations organizations need to have as they are introducing AI into their processes.” Like any process requiring high-volume task completion, Denver says, a little efficiency goes a long way. “We’re seeing interesting opportunities with AI to leverage time better, and that’s only the beginning.” But, he cautions, as organizations move forward with AI, it’s critically important that they stay aware of the risks. AI and its potential rewards don’t exist in a bubble; they need to take their place in a hiring process with clear responsibility and governance. “Ultimately, you should not replace human discernment and context with AI,” Kittner says. “But AI can be used for efficiency. Try it out and see what it can do. Just make sure to incorporate AI in ways that are appropriate, ethical and create positive experiences.” Annie Mueller is an experienced financial writer and principal of Prolifica Co. She works with clients from individuals to large financial companies and is a frequent contributor to various financial and business publications. Reprinted courtesy of Insight, the magazine of the Illinois CPA Society.
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The Latest on the ERC
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n dealing with a flood of seemingly frivolous Employee Retention Credit (ERC) claims, the IRS is upping the ante. The ERC, enacted in 2020 under the CARES legislation, has taken many twists and turns over the last three and a half years, presenting businesses, accountants and even the IRS with many challenges.
Let’s look at some of the latest ERC developments in the second half of 2023:
Third-party ERC providers
By James D. Brandenburg, CPA, MST
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First, despite regular warnings from the IRS about ERC scams, third-party ERC providers continued to tell businesses they were entitled to large ERC refunds for 2020 and 2021. Businesses, in turn, flooded the IRS with thousands of ERC claims, many of which the IRS saw as frivolous or even fraudulent.
November | December 2023
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The IRS has taken a multipronged approach to deal with ERC scams: They have stepped up their marketing campaigns and PSAs addressing ERC abuses. They have also initiated many new audits of ERC claims, including several criminal investigations.
GLAM & a moratorium The IRS also countered this summer with guidance that was welcome relief for many. On July 21, the IRS issued a Generic Legal Advice Memorandum (GLAM). GLAM 2023-05 covered five scenarios dealing with supply chain disruption and why these situations are not eligible for the ERC. Many third-party providers had aggressively interpreted prior IRS guidance to say that businesses were entitled to the ERC due to supply-chain disruptions because of a COVIDrelated government order. In this GLAM, the IRS announced that supply-chain disruptions are not the result of a government order, and businesses are not eligible for the ERC. However, as many questionable ERC claims surged, on Sept. 14, the IRS announced a moratorium on processing new ERC claims. The moratorium went into effect immediately and will extend to at least the end of the year, “to protect honest small-business owners from scams,” the IRS said. The announcement goes on to state: IRS Commissioner Danny Werfel ordered the immediate moratorium, beginning today [Sept. 14], to run through at least Dec. 31, following growing concerns inside the tax agency, from tax professionals as well as media reports, that a substantial share of new claims from the aging program are ineligible and increasingly putting businesses at financial risk by being pressured and scammed by aggressive promoters and marketing.
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The IRS was concerned that many small businesses were targets of aggressive third-party ERC providers with ineligible and unsupported ERC claims. Options under the moratorium What should a business do during this IRS moratorium? This depends on where the business is in the ERC claim process. Some of the points identified below are being worked out now by the IRS, and at the time of this writing, more details were expected. The IRS offered the following advice:
The IRS has stated that there are legitimate ERC claims awaiting processing, but the number of frivolous claims from third-party promoters are overloading their processing systems. Over the past year, the IRS has alerted businesses to this concern, but the surge of ERC claims continued with no end in sight. So, the IRS was forced to suspend the processing of new ERC claims.
• Claims awaiting processing. For businesses with an ERC claim on file with the IRS, the IRS will go on processing these claims at a reduced pace. The processing period could be pushed out to 180 days or more, according to the IRS, to assure that the claims are legitimate. The IRS may also request additional ERC documentation.
Werfel noted that the IRS was concerned that many small businesses were targets of aggressive third-party ERC providers with ineligible and unsupported ERC claims. He also stated that misleading marketing efforts by these providers were not only hurtful to many small businesses and their owners but also disrupted the processing of legitimate ERC claims. Werfel encouraged impacted small businesses to pause their ERC process and seek advice from a trusted tax professional to avoid situations where they might be forced to repay an ERC claim with penalties.
• Withdrawing claims already filed. Those with a pending ERC claim should carefully analyze the ERC guidance with a trusted tax professional. A new IRS Q&A guide is available. If the business claimed the ERC, but the claim has not been paid or processed yet by the IRS, the business’s claim could be withdrawn. This option will allow taxpayers to avoid possible repayment issues and promoters’ contingency fees. The IRS indicates it will soon issue more details on this withdrawal option.
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• The IRS ERC settlement program. If a business previously filed an ERC claim that was processed by the IRS, and the business received the refund but has now determined the ERC was received improperly, the IRS will soon announce another option. The agency will release a plan that will permit a business to repay its ERC refunds and avoid penalties and other IRS sanctions. The IRS further noted that it is studying how a business could address the contingent fee it paid a third-party promoter. • Those considering filing. The IRS recommends that businesses diligently analyze the ERC guidelines during the moratorium period if they are still evaluating whether to submit an ERC claim. The agency further encourages businesses to talk to a trusted tax professional rather than a tax promoter or marketing firm looking to make money generating applications — which can take a big chunk out of the ERC refund. The above-noted new Q&A guide should be reviewed closely. • “Red flags” and third-party ERC providers. The IRS warns those still contemplating filing for the ERC to watch out for aggressive ERC promoters. The agency has
released a list of red flags that businesses should keep in mind when dealing with third-party ERC providers.
Next steps There will be much to consider during this moratorium. All businesses should evaluate their ERC situation and develop a plan. Whether your business has filed and received an ERC refund, is waiting for the ERC claim to be processed, or is still determining whether they’ll qualify for the ERC, it’s important to proceed with caution. The IRS understands that many businesses feel conflicted over the ERC, and the agency aims to develop several other options. It will also continue its audits of ERC claims and its marketing campaign against ERC abuses. As noted above, the IRS urges businesses to avoid dealing with aggressive third-party ERC providers and instead seek counsel from a trusted tax professional. The ERC has taken many on a wild ride over the past three and a half years, and there are likely more turns ahead to navigate. Stay tuned. Jim Brandenburg, CPA, MST, is a tax partner with Sikich LLP in Brookfield. Contact him at 262-754-9400 or jim.brandenburg@sikich.com.
YOU have the opportunity to impact thousands of students and educators in Wisconsin.
Through your contribution to the WICPA Educational Foundation, you can help us reach students and educators in high school and college to create awareness about the accounting profession. As the end of 2023 draws near and you are thinking about tax planning, consider donating to the WICPA Educational Foundation. Questions? Contact Tammy J. Hofstede, WICPA President and CEO at tammy@wicpa.org.
To contribute, visit wicpa.org/EF.
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19
ACCOMMODATING
MENTAL ILLNESS IN THE WORKPLACE
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hen an employee requests assistance due to a broken arm, we know how to address it. We know what that is. The employee knows it. We can see it. We can relate to it. We have no reason to doubt it. We know when it may heal for a By James R. full recovery. In most situations, we Macy, JD can analyze fairly quickly whether or not we can make workplace accommodations for the employee while they heal. While equally recognized under the law as a disability, addressing an accommodation for a mental illness can be far more challenging. In general, we have less experience addressing mental illnesses. We may not know what it is. The employee may not even know what it is or that they suffer from a mental illness. We may not know when the illness will re-occur or how long it will last. Accommodating a mental illness can be far more challenging if we let it. At the same time, gaining information and following the process for addressing a request for an accommodation can lead to making legal, sound decisions regarding mental illness in the workplace.
COVID-19 and the stresses it caused have accelerated the focus on mental illness in general but certainly in the workplace. Almost one-fifth of U.S. workers reportedly suffer from mental illness. Only about half of those individuals seek treatment, whether due to stigma, lack of medical providers, or limited financial resources.1
The laws In our state, protections for employees with disabilities come from two primary laws: the Americans with Disabilities Act (ADA) and the Wisconsin Fair Employment Act.
Accommodation and the interactive process While an employer is not required to accommodate a mental health condition it knows nothing about, the employee is also not required to make a specific request for accommodation in writing. Notice to the employer is sufficient if an employee mentions difficulty relating to the job along with reference to a medical or mental health condition. Recognizing that since even perceiving one to have a mental illness is protected, it is always best to act on facts, discussions and, in almost all cases, medical certification.
Under the federal law, the ADA prohibits discrimination against people with disabilities in everyday activities, including employment, access to state and local governments, public transit, access to businesses open to the public, and telecommunications. A person with a disability is defined as someone who: (1) has a physical or mental impairment that substantially limits one or more major life activities,
It is important to note that a mental impairment is specifically identified under the definition of a disability.
Requesting medical certification brings its own set of requirements. In general, a request for medical information is limited to determining what the employee can do at work and what the employee cannot do. The focus is on the ability to do the job, not the employee’s medical or mental health record.
Under the Wisconsin Fair Employment Act, the state prohibits discrimination based on disability in all aspects of the employment relationship, including hiring, firing and terms and conditions of employment. In Wisconsin, a mental impairment is also specifically identified under the definition of disability.
Once the employer confirms a disability does in fact exist, the law requires a meeting between the employee and employer, which is referred to as the “interactive process.” The interactive process is used, in part, to consider if any reasonable accommodation might exist so the employee can do the essential functions of the job.
(2) has a history or record of such impairment, and/or (3) is perceived by others as having such an impairment.
Johnson, V. “The New Era of Mental Health in the Workplace; the FMLA and ADA Implications,” Lexology, ( July 12, 2022); Lang, K. “Pandemic Impact on Mental Health: A Global Overview,” Medical News Today (March 24, 2022). 1
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Studies indicate that those with a mental disability historically tend to have been less likely to receive an accommodation at work than employees with physical disabilities.
The interactive process varies from case to case, depending upon the circumstances. At a minimum, the process involves communication with the employee, gathering information from a medical provider, analyzing the job description and essential functions, evaluating a range of possible accommodations, considering actual costs (if any), and considering whether or not there is a significant risk of substantial harm to the individual or others. A reasonable accommodation may or may not be the accommodation the employee requests. While a mental illness disability is to be treated the same as a physical disability under the law, studies indicate that those with a mental disability historically tend to have been less likely to receive an accommodation at work than employees with physical disabilities.2 Litigation is changing that.
Litigation examples Cases litigating situations involving a mental illness disability highlight the need to follow the interactive process and take such situations very seriously. In EEOC v. Ranew’s Management Company (U.S. Dist. Ct. Georgia 2022), the company ultimately settled the suit after terminating an employee who had been diagnosed with severe depression. The company initially elected not to return the employee to work despite a doctor’s release, under the belief the employee could not be trusted to perform the job. The settlement involved payment of $250,000. In EEOC v. TrueBlue and PeopleReady (U.S. Dist. Ct. Virginia 2022), an employee was terminated following diagnosis of a psychiatric disability. The suit alleged the termination was influenced by concerns regarding the employee’s future need for intermittent leave for outpatient
appointments. Under a settlement resolving the case, the employee was reinstated with a payment of $125,000. In EEOC v. Kaiser Foundation Health Plan of Georgia (U.S. Dist. Ct. Georgia 2021), the employer’s decision to not accommodate an employee’s request to access the workplace through a nonrevolving door due to a disability resulted in the payment of damages to the employee. Accommodation also applies to the ability to access the workplace. The settlement included payment of $130,000. Each of the above cases resulted in settlement, meaning the employers each may have had reasonable defenses for the actions they took but may also have determined that it was more cost effective to settle. At the same time, the above examples are important to keep in mind when considering — or not considering — workplace accommodations. While mental illness disabilities are sometimes more difficult to analyze, employers are advised to work through the interactive process, gain important facts, and make sound decisions in the same way they address employees with physical limitations.
In closing Mental illness is no longer the unspoken disability. Using an effective accommodation process in a mental illness situation, the same as you would in a physical illness situation, not only avoids costly litigation but is also invaluable when it comes to employee retention. James R. Macy, JD, is an attorney with von Briesen & Roper s.c. in Neenah. He represents employers in all aspects of employment law, including labor negotiations, discrimination defense, disability and ADA issues, and other difficult personnel issues. Contact him at 920-232-4841 or James.Macy@vonbriesen.com.
2 McDowell, C., Fossey, E. “Workplace Accommodations for People with Mental Illness: A Scoping Review,”
Journal of Occupational Rehab, 25: 197-198 (2015).
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Welcome new members! Get to know the newest members of the WICPA. August 1, 2023 – September 30, 2023
Rachel Aberle
Lisa Harris
Jason Londo
Mike Schubring
Vrakas CPAs + Advisors
John D. Helgeson
Ryan L. Marschall
Eric Shields
Ashley Bakalars
Angela Hernandez
Scott M. McGuigan
Brent W. Silverman
MGIC Investment Corp.
Edward Acevedo
JRM CPAs
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Abdoulaye Barro
Lance Holz Sikich LLP
Benjamin J. Bell
Jenna Horn
Baker Tilly US LLP
Sikich LLP
Lisa Belli-Fuchs
Northwestern Mutual
Noah R. Jeseritz
Samantha Benben
Sammi Johnson
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Letitia Bliss, MPA
Shari Kassube
Batley CPA LLC
Alliere CPA LLC
A Life Style Service Inc. Journey Mental Health Center Inc.
Joyce Mendoza Sikich LLP
Heather A. Mentel
Zach Mindel
Jeffrey S. Van
Sikich LLP
PIC Wire and Cable
Kelly Vargas
Nate P. Mulry
Sikich LLP
Sydney Koehler
Bryanna Clemens
Acuity – A Mutual Insurance Company
Mike Czerwinski
Sikich LLP
Cheyenne Koster Sikich LLP
Prashant N. Kothari
Sikich LLP
SkillBench Inc.
Adam Dohr Sikich LLP
Michael W. Krause
Jacob Ferch
Julie Kren
Dynacast LLC
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Courtney C. Leisen
Sikich LLP
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Laura K. Lenhart
Bruce H. Hamilton
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Honkamp & Co. P.C.
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Kayla D. Klein
Super Products LLC
Stefan Stojanovich
Elizabeth Uecker
Sandra S. Chapman Dawn Clabots
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Baker Tilly US LLP
Charles J. Minesal Jr.
Mackenzie Knaak
BDO USA P.A.
Jacob C. Michel
Sikich LLP
Ernst & Young LLP
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Zach Keesler
University of Wisconsin– La Crosse
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Capitol Indemnity Corporation
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Nicolet Area Technical College
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Robert Zinda
DeVry University
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{ Technology | Cybersecurity }
Are Secure Passwords Still a Thing? By Susan Firriolo, CPA, CISA
M
ost cybercrimes occur because of stolen passwords. Traditionally, passwords have been the go-to security method and first line of defense for protecting systems. Phishing attacks (links in emails or texts) are the top technique used by hackers to get passwords. Are traditional password policies — creating strong passwords, installing password managers or using two-factor authentication — still protecting data? If not, what are the alternatives?
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Most cybercrimes occur because of stolen passwords.
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Traditional methods Strong passwords. These are long and complex passwords containing a combination of upper- and lowercase letters, numbers and special characters. Common guidance includes avoiding using dictionary words, not sharing the password and changing it every 30 days. However, using strong passwords alone is risky. Hackers use techniques such as phishing, algorithms or brute force attacks to figure out passwords. Password managers. Password managers have been considered a secure way to generate, store and manage complex passwords using encryption. Users only need to remember one master password to access all their accounts. But like any password, master passwords are subject to hacking. When a master password is compromised, a hacker can change it, access all accounts and lock out the user in one attack. Password managers also take time to set up because the user has to enter usernames and passwords for all their accounts.
Enhanced protection There are methods that can be used in combination with passwords to enhance protection. Multifactor authentication, single sign-on and adaptive authentication are important components in a security program. Here’s how they work: Multifactor authentication (MFA). Simple MFA usually requires users to provide a password and an authentication code sent as an email or text to verify the user. MFA offers more security than using passwords alone. However, MFA faces challenges and has been hacked using a compromised email account, sim swaps and a practice called MFA fatigue. Single sign-on (SSO). This is an identity service allowing users to log in to multiple applications using a single set of credentials. SSO is also used with social media, such as when an application asks you to sign in with Google or Facebook. Although SSO increases speed moving between applications, it does have risks: The user network is dependent on the SSO service provider, and if the service provider goes down, so do all user-connected network resources. Adaptive authentication. This is a complex form of MFA. It evaluates user risk and chooses how to validate the user’s identity by geo-location, device status, user behavior or other metrics. For example, logging on with a trusted device is considered a low risk, so the user will be authenticated without further verification, whereas it would be suspicious if a user who typically logs on at the office logs on at home. Then another type of authentication would be required to verify the user. Additionally, advanced adaptive authorization
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CPAs may want to consider securing passwords by adding another level of protection. factors can be continuously checked during the log-on period, such as requiring a USB device to be plugged into the user’s machine. Adaptive authorization systems are multifaceted and take time to implement. Systems with strong authentication have a tendency to lock users out of applications, but systems with weak authorization can give everyone access — including hackers.
Passwordless systems Passwordless systems, such as biometrics and hardware tokens, may or may not offer users easier access. Biometrics. Biometric authentication involves using physical characteristics, such as fingerprints, facial recognition or other biometrics, to verify a user. Although biometrics cannot be replicated, the systems are expensive, have privacy concerns, can generate false positives and sometimes just do not work. Hardware tokens. Hardware tokens are physical devices (such as key fobs or smart cards) that generate one-time codes to authenticate the user. Without the device, access is denied. If the device is lost, users cannot access the system until a new device is procured. If the device is stolen, all bets are off. Depending on the size, structure, risk tolerance and other characteristics of an organization, CPAs may want to consider securing passwords by adding another level of protection. Passwordless security is on the way and should also be evaluated.
Susan Firriolo, CPA, CISA, is the director and founder of Pet Rescue 990 Project in New Jersey, which provides online tax and advisory services for pet rescue 501(c)(3) organizations. Contact her at sac2364@gmail.com. Reprinted from New Jersey CPA magazine with permission of the New Jersey Society of CPAs.
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memorials K. Edward Atwood, CPA, PhD (1948–2023)
K. Edward Atwood, CPA, PhD, died on Tuesday, June 27, at his home in Cross Plains. He was 74. Atwood was born and raised in Hudson and graduated from Hudson High School with the class of 1966. He then attended the University of Wisconsin–Madison, where he studied accounting and real estate and earned several masters’ degrees and a PhD. He was the sole owner of Contemporary Real Estate Research/The CRES Group LLC in Verona. Atwood was an avid bowhunter and especially passionate about hunting and fishing in Alaska. He was a member of the Blackhawk Bowhunters Archery Club in Verona. Atwood is survived by a sister and brother, seven nieces and nephews, and many other relatives and friends.
Michal C. Beam, CPA (1967–2023)
Michal (Mike) Charles Beam, age 55, of rural Ettrick, died on Thursday, Feb. 16, the WICPA recently learned. Beam was born and raised in Park Falls and graduated from Phillips High School. After graduation, he attended UW–Eau Claire and earned a bachelor’s degree in accounting. He went on to earn a master’s degree in taxation from UW–Milwaukee and worked for Ashley Furniture for 17 years before becoming the CFO of Nesnah Ventures of La Crosse in 2016. Beam was an active member of the French Creek Lutheran Church, where he volunteered in many capacities, most recently as treasurer of the church foundation. He was an avid outdoorsman who enjoyed boating with his family and hunting with his close friends and beloved dog, Max. Beam is survived by his wife, Pam; three daughters; his mother; a sister; a step-sister; five half-siblings; and many cousins, nieces, nephews and friends.
Donald J. Becker, CPA (1950–2023)
Donald J. (Don) Becker, CPA, passed away on Sunday, Sept. 17. Becker graduated from St. Joseph’s High School in Kenosha and received a bachelor’s degree from UW–Parkside. He was licensed as a CPA in Illinois in 1977 and in Wisconsin in 1978. Early in his career, he worked as an international operations specialist for the IRS. More recently, Becker was owner/operator of Villani Becker & Larsen S.C. He also served as president, vice president and treasurer of St. Joseph’s High School board of trustees and was a member of the Elks Club, Western Kiwinis, the American and Wisconsin Institutes of CPAs, and the Illinois Society of CPAs. He is survived by his three children, two granddaughters and two brothers.
Willard M. Johnson, CPA (1931–2023)
Willard (Bill) Johnson, 92, passed away on Friday, Aug. 4. in Eau Claire. Johnson grew up in Osseo and graduated from Lincoln Hill High School in 1949. Shortly after, he joined the U.S. Marine Corps and served for two years, primarily at the El Toro Marine Corps Air Station in California. Following his service, he attended UW–Madison and graduated with an accounting degree. Johnson worked for CPA firms in Madison and Appleton and most recently at Grant Thornton LLP in Eau Claire, from which he retired in 2010. He continued to serve clients independently for several years afterward. Johnson was known for his strong work ethic and great character. He was family oriented and very concerned for the well-being of his children, grandchildren and others. An avid fan of the Wisconsin Badgers and Green Bay Packers, Johnson was fortunate enough to attend multiple Rose Bowls and a Super Bowl victory over the years. He is survived by his beloved wife of 69 years, Faith Ann; one daughter and three sons; nine grandchildren; five greatgrandchildren and one great-great-grandchild.
Brian J. McMahon, CPA (1937–2023)
Brian J. McMahon, CPA, a lifetime member of the WICPA, passed away on Friday, July 28. He was 85. McMahon grew up in Westfield and graduated from Westfield High School in 1955. He then went on to UW–Whitewater, from which he graduated in 1960 with a Bachelor of Science degree in accounting. He also served in the United States Army. McMahon was co-owner of McMahon–Veltus S.C. in Racine and Union Grove, retiring from the firm in 2020 after a 60-year career. He was a past president of Point West Business Association, Union Grove Lions Club and Union Grove Community Foundation. He was a member and treasurer of Racine Founders Rotary Club for ten years and chairman of the Finance Committee of St. Roberts Church for 20 years. He also was a member of the Caledonia American Legion Post 494. McMahon nurtured a love of horse racing, beginning with racing thoroughbred horses at 10 years of age and later transitioning to harness horse racing. He raced with the Wisconsin Harness Horse Association and served as the organization’s accountant for many years, retiring from racing just two years ago. McMahon is survived by his wife of 58 years, Cheryl; four children; seven grandchildren; and three great-grandchildren.
If you are aware of a member obituary and believe it should be included in Memorials, please send a copy of the obituary or contact Marcia Tillett-Zinzow at mtzinzow@icloud.com.
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® The worst brings out| December our best. On Balance November 2023
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{ Human Resources | Talent R & R }
Seven Talent Acquisition and Retention Strategies for This Candidate-Driven Market
I By Daniel Keith
f you’ve had to hire new employees within the last two years, you know exactly what I mean by “candidate-driven market.” It’s simply a job market in which there are more jobs than there are people to fill them, which gives the candidates the upper hand. In this article I’ll address seven strategies for attracting and retaining top talent in such a market.
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It’s simply a job market in which there are more jobs than there are people to fill them, which gives the candidates the upper hand.
Talent acquisition vs retention Talent acquisition and retention are intertwined and inseparable. Retention starts in the recruiting process.
Acquiring top talent 1. Know what you are looking for. Candidates are harder to find now, so you might not get a chance to compare candidates. When you find The One, be prepared to make an offer. The best way to evaluate a candidate is not by comparing them to other candidates, it’s by comparing them to the job description — the skill set and traits you’ve said you need for this role.
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Make sure the people involved in the interview process are engaging. Remember you are not just evaluating the candidate; you are also selling your company and the job opportunity. 3. Streamline the interview process.
2. Have top talent to attract and retain top talent.
Because there are so many job opportunities for candidates, many will be in the job market for less than two weeks. And the chances that you found them the day they started their search process are pretty slim. If your process takes longer than two weeks for a given candidate, your odds of success start to diminish significantly. Identify what is necessary, and eliminate any fluff from the process.
Birds of a feather flock together, right? More than almost any other factor, it’s the people a candidate meets during the interview process that will make them more (or less) interested in a job opportunity. We naturally want to surround ourselves with other professionals we perceive as being friendly and successful. These are the questions candidates will be asking themselves during an interview: Are these people I could learn from? Would my personality mesh well with my peers? Does my potential boss seem approachable and supportive? Do they have career or life experiences that I could learn from?
If you are going to have the candidate physically come to your facility at some point in the process (which we highly recommend), make the most of their time by ensuring that everyone they need to meet will be available and on time during their visit. Remember that most candidates will likely be missing at least a half day of work to accommodate this visit. By not asking them to come back for another visit, it shows that you respect and value their time. It also consolidates your overall process, which is equally advantageous.
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4. Over-communicate during the interview process.
Retaining top talent
Have you ever asked the attendant behind a customer service counter a question, and they just start typing? Are they addressing my question and searching for a solution? Are they changing their fantasy draft picks for tonight’s game? If they don’t tell you what they are doing, you have no idea. The same is true for candidates during the interview process. If you interviewed someone four days ago and didn’t communicate specific expectations about next steps, timeline, etc., then don’t be surprised when you call back and they tell you they accepted another offer two days before. Likewise, the candidate may not reply at all — the dreaded ghosting.
5. Stay in touch during the transition phase.
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The transition phase is the time between acceptance of an offer and the start date. One mistake hiring managers make is assuming recruiting is complete at this point. If you think of the recruiting process as a chain, this is the point where it experiences the greatest tension. This is the part where any weak links will break. The candidate resigns from their current employer, who then goes into overdrive trying to change their mind: counter-offers, promises of change, promotions, etc. This is
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{ Human Resources | Talent R & R }
also where second-guessing and feelings of doubt naturally come into play. In addition, this is where competing offers come into play. Your offer could even be used as leverage to get a higher offer elsewhere. For these reasons, it is critical to have a communication plan in place during this phase. Check in after the candidate gives notice (check in live, not just with an email or text). This helps reassure the future employee that their initial decision to accept your offer was the correct one. You could also schedule a coffee meeting or lunch or invite them to a team outing or meeting. Mail them something prior to their start date, like a food basket, company swag, your favorite business book, or something similar. The goal is to maintain communication and continue to build the relationship commitment between the candidate and their new employer. 6. Onboarding Being a new employee is a naturally a stressful experience. New hires go from knowing everything at their previous workplaces to having to ask where the bathroom is and how to access basic work tools. Effective onboarding minimizes these challenges. This is also a time when new employees are still forming their opinions of the organization. A positive onboarding process makes employees feel supported and reinforces the
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idea that your organization is where they can advance their careers. Effective onboarding leads to enhanced productivity, which sets the stage for job satisfaction and retention. On the flip side, getting this foundational step wrong starts to erode all the positive momentum gained up to this point and creates a long list of challenges to overcome. This may also be a time when people get calls from their previous employers, asking them how their new job is going. The key to effective onboarding is to smoothly transition new employees into the organization as quickly as possible, ensuring they feel welcomed and supported from the moment they arrive. Examples: • Ensure they have access to a desk, phone and any required technology from day one. We hear so many complaints from new employees that they don’t have access to essential resources and so are asked to complete meaningless “busy work” to fill in the time. • Assign a “lunch buddy” or “welcome buddy.” This person could also be someone they could go to with other questions about how to find things. • Make sure they know where to be on the first day, who to ask for, and how they should dress to comply with any dress code.
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7. Recognition
The common theme throughout these strategies is really the Golden Rule. Try to put yourself in the shoes of the interviewee or the new hire. From a recruiting perspective, remember this person is considering a life-changing decision. It’s exciting, stressful and scary at the same time! They are carving out time between their current job and other responsibilities for the opportunity to meet with you.
This is one of the most obvious but important retention tools. People like to feel recognized, appreciated, valued and “seen.” Obviously, money talks, and no amount of praise can offset wages that are not consistent with the market. But compensation is not the only way to recognize people’s contributions. This is going to look different for everybody, but there are so many things you can do, big and small gestures, to make people feel appreciated.
From a retention perspective, remember this person is in a new environment, an outsider, and wants to become a contributing member of your team as quickly as possible — but also may be re-evaluating their decision to join your team.
Here are some recognition ideas: cards, gift cards, lunch or happy hour, public recognition among colleagues with reply-all callouts, spot bonuses, swag gifts and team outings.
Keep these things in mind, and try to provide your new hires with the experience you would like to have if the roles were reversed.
Takeaway You don’t build a business. You build people, then people build the business. — Zig Ziglar, noted author and motivational speaker
KEEPING COSTS DOWN FOR YOUR CLIENTS
Daniel Keith is manager – financial recruiting at Truity Partners LLC. He has over 10 years of finance and accounting recruiting experience. Contact him at Daniel.keith@truitypartners.com.
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{ Taxation | Sales tax }
The Future of Sales Tax: Trends and Predictions
A
ccounting as a profession is facing a loss of our experienced leaders and workers while dealing with some of the most complex, fast-paced and overwhelming customer issues. Technological advances cannot be By Holly Hoffman overly relied upon. I am finding that businesses require advisory services — not just tax filing, data automation and processing. The best way to serve our customers is by staying connected with experts, keeping informed and helping clients connect to obtain answers from the right sources. This article will explore the emerging trends and predictions that will shape the world of sales tax in the coming years. Understanding these developments is crucial for tax professionals to navigate the complex and dynamic nature of sales tax regulations and provide effective guidance to businesses.
E-commerce and remote sales E-commerce has fundamentally transformed the retail landscape, and its impact on sales tax is significant. As online sales continue to surge, governments are taking notice and adapting their tax laws accordingly. The trend toward taxing remote sales, often referred to as “economic nexus,” is gaining momentum as more states implement legislation to capture sales revenue from online transactions. Tax professionals must stay informed about the economic nexus laws in each jurisdiction and guide businesses in accurately determining their nexus status. It is essential to help businesses adopt the necessary technology and processes to collect and remit sales tax correctly, particularly in multistate e-commerce operations.
Marketplace facilitator laws In recent years, many states have enacted marketplace facilitator laws to level the playing field between traditional retailers and e-commerce platforms. These laws require online marketplaces to assume responsibility for collecting and
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“
The best way to serve our customers is by staying connected with experts, keeping informed and helping clients connect to obtain answers from the right sources. remitting sales tax on behalf of third-party sellers using their platforms. This development has relieved some compliance burdens for small businesses, but it introduces new challenges for tax professionals. As more states adopt marketplace facilitator laws, tax professionals need to educate their clients on their potential obligations and assist them in navigating the complexities of these regulations. Understanding the nuances of each jurisdiction’s laws and the varying thresholds for marketplace facilitator tax collection is crucial for compliance.
Digital and virtual transactions The rise of digital currencies and virtual transactions presents unique challenges for sales tax compliance. Cryptocurrencies, blockchain technology and virtual marketplaces are reshaping the way transactions occur, often crossing international borders without traditional physical presence indicators. Tax professionals need to stay informed about the evolving regulations surrounding virtual currencies and digital transactions. Collaborating with legal experts can help navigate the complexities of cross-border sales and the potential implications for sales tax obligations. Governments are actively seeking ways to capture revenue from these emerging markets, so understanding the tax implications will be crucial for businesses and their tax advisors in the coming years.
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SALES TAX
Automation and tax technology Technology is revolutionizing the tax industry, particularly in the area of sales tax compliance. The automation of sales tax processes through software and artificial intelligence brings efficiency, accuracy and real-time reporting capabilities to businesses. As automation continues to advance, tax professionals need to embrace these technologies to stay competitive and deliver value to their clients. Implementing tax technology solutions can streamline sales tax compliance, reduce errors, and provide valuable insights into businesses’ financial health. Tax professionals should collaborate with technology experts to explore the best solutions to meet their clients’ needs and ensure compliance with evolving regulations.
International sales tax harmonization In an increasingly globalized world, harmonization of international sales tax regulations is gaining attention. Governments and organizations are exploring ways to simplify cross-border tax compliance and reduce administrative burdens for businesses.
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Tax professionals need to stay informed about international initiatives aimed at harmonizing sales tax rules, such as the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting project. Keeping track of evolving international tax standards will be essential for businesses engaged in cross-border sales to ensure compliance and avoid potential double taxation or disputes with tax authorities. The future of sales tax is dynamic, driven by technological advancements, changing consumer behavior and evolving regulatory frameworks. Tax professionals must anticipate and adapt to these trends and predictions to provide effective guidance to businesses. Embracing automation, understanding the impact of e-commerce and virtual transactions, navigating marketplace facilitator laws, and staying informed about international tax harmonization efforts will be vital for tax professionals to ensure compliant and strategic sales tax planning for their clients in the years to come. Holly Hoffman is a sales tax specialist and sole proprietor of the business she founded — Sales Tax Advisory Network — in Amherst. Contact her at 715-498-4164 or holly@salestaxlady.com.
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kudos
Rachel Blumenshine
Michael Bock
Jill Boyle
Rachel Burrow
Marc Cadieux
Joe Jester
Mitchell Jussila
Kelly Kozak
Dennis Martin
Cassie Bagley, CPA, has been advanced to the role of tax senior at CliftonLarsonAllen (CLA) in Green Bay.
Colin Johnson, CPA, has been advanced to the role of assurance senior at CLA in Appleton.
Nolan Beirne, CPA, has been advanced to the role of assurance senior at CLA in Green Bay.
Mitchell Jussila, CPA, has been promoted to senior tax manager at Chortek LLP in Waukesha.
Rachel Blumenshine, CPA, has been promoted to senior associate at Hawkins Ash CPAs in Medford.
Kelly Kozak, CPA, has been promoted to vice president of finance and administration at Appleton-based Hoffman Planning, Design & Construction Inc.
Michael Bock, CPA, CEO of Dairy State Bank in Rice Lake, has received the Leaders in Banking Excellence award from the Wisconsin Bankers Association. Nicole Boucher, CPA, has been advanced to the role of BizOps chief finance officer at CLA in Green Bay. Jill Boyle, CPA, director in the not-for-profit tax practice at Sikich LLP in Brookfield, was named to BizTimes Milwaukee’s list of 2023 Notable Leaders in Accounting. Rachel Burrow, CPA, has been promoted to senior manager at Hawkins Ash CPAs in La Crosse. Marc Cadieux, CPA, CFO at Children’s Wisconsin, was named to BizTimes Milwaukee’s list of 2023 Notable Leaders in Accounting.
Erin Marheine, CPA, BBA, has been advanced to the role of assurance senior at CLA in Green Bay. Dennis Martin, CPA, CFO of Beyond Vision in West Allis, was named to BizTimes Milwaukee’s list of 2023 Notable Leaders in Accounting. Heather Martinez, CPA, has joined New York’s Hamilton College as associate VP for finance and controller. Martinez was previously the controller at Carthage College in Kenosha. Danielle Niemela, CPA, has been advanced to the role of assurance director at CLA in Green Bay. Amanda Nowaczynski, CPA, CFP, MSPA, has joined Operose Advisors in Milwaukee as the firm’s director of tax services.
Jessica Cassellius, CPA, has joined Eau Claire-based Royal Credit Union as audit services manager.
Steve Pabian, CPA, has been promoted to senior manager at Hawkins Ash CPAs in Mequon.
Marissa Ciha, CPA, has been advanced to the role of assurance director at CLA in Green Bay.
Bryce Pass, CPA, has been promoted to senior accountant at Wipfli LLP in Milwaukee.
Alison Dorn, CPA, has been advanced to the role of tax senior at CLA in Green Bay.
Erica Schaefer, CPA, has been advanced to the role of assurance senior at CLA in Green Bay.
Scott Firgens, CPA, has been advanced to the role of consulting director at CLA in Appleton.
Wendy Schuler, CPA, VP of finance and treasurer for Sheboygan-based Acuity Insurance, was named to BizTimes Milwaukee’s list of 2023 Notable Leaders in Accounting.
Lynn Heslinga, CPA, a principal at SVA Certified Public Accountants in Madison, has been named to the Overture Center Foundation’s board of directors in Madison. Megan Hovell, CPA, has been advanced to the role of assurance director at CLA in Green Bay. Rachel Huben, CPA, has been advanced to the role of assurance director at CLA in Green Bay. Joe Jester, CPA, has joined Hawkins Ash CPAs as a tax manager in the firm’s Mequon office.
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Shawn Selk, CPA, CFO at Altius Building Co. in Milwaukee, was named to BizTimes Milwaukee’s list of 2023 Notable Leaders in Accounting. Carver Smith, CPA, managing partner at Wisconsin-based staffing and executive search firm Truity Partners, was interviewed for a July 31 Insight magazine article by Kate Burns, titled “Behavior-based interviews get to the heart of hiring.” Jake Stange, CPA, has been promoted to senior associate at Hawkins Ash CPAs in Medford.
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Heather Martinez
Steve Pabian
Bryce Pass
Wendy Schuler
Shawn Selk
Carver Smith
Jake Stange
Kyle Stephens
Victoria Thayer
Kyle Stephens, CPA, co-founder and president of Craft Beverage Warehouse in Milwaukee, was interviewed for a July 24 BizTimes Milwaukee article by Ashley Smart, titled “Advocates say efforts to revitalize Milwaukee’s 30th Street Industrial Corridor not slowed by Master Lock exit.”
program, to be held December 11–14. Thayer also participated in an Aug. 24 panel on women’s entrepreneurship as part of Madison’s Forward Festival.
Victoria Thayer, CPA, was one of only 36 CPAs selected to participate in the AICPA’s four-day Leadership Academy
Lexi Winling, CPA, has been advanced to the role of BizOps senior at CLA in Green Bay.
Tyler Thompson, CPA, has been advanced to the role of BizOps assistant controller at CLA in Fond du Lac.
Want your new job, promotion or award mentioned in Kudos? H Email your announcement and photo in JPG format to mtzinzow@icloud.com. H
Are you still on track for retirement? Investors have survived market swings and corrections before. But a twinge of uncertainty may have you wondering if you should get another opinion to help confirm your wealth is in the right place. That’s why we’ve made it as easy as we can to have a complimentary, face-to-face meeting with an advisor. Schneider Wealth Management Group of Wells Fargo Advisors James K. Schneider, CFP® Senior Vice President - Investments 20800 Swenson Dr Ste 200 Waukesha, WI 53186 Direct: (262) 798-3759 jim.schneider@wellsfargoadvisors.com wellsfargoadvisors.com
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{ Leadership | Fiduciary responsibility }
The Cost of Conflicted Investment Advice
I
n the marketplace of professional services, most tax and legal advice is delivered objectively and free from conflicts of interest. For example, accountants and lawyers typically charge a fixed hourly fee that is based on the time and expertise required to complete a specific By Joseph Topp, project. Investment advice, however, CPA often works differently. Instead of charging a fixed fee for services, many investment advisers charge a percentage of the assets invested. If your organization offers employees a retirement plan, such as a 401(k), you are a retirement plan sponsor. As such, you have a fiduciary responsibility to act in the best interests of your employees. This responsibility extends to whom you hire to provide investment advice to your employees. Conflicted investment advice occurs when the adviser’s compensation is affected by what employees do with their money. In hiring a conflicted adviser, not only are plan sponsors exposing their employees’ life savings to recommendations that may generate subpar returns on their investments, they are also putting themselves at risk of a lawsuit.1
The cost of conflicted retirement advice The true cost of conflicted investment advice to retirement plan participants was first quantified in 2015 when the Council of Economic Advisors — an agency within the Executive Office of the President — estimated the aggregate annual cost of conflicted advice to be $17 billion a year.2 The essential finding of the report states that “conflicted advice leads to large and economically meaningful costs for the Americans’ retirement savings.”
Nearly all participants who retire or terminate will face the crucial decision of what to do with the retirement savings they have accumulated. Whether or not the adviser their employer provides has their best interests in mind will have a significant impact on the quality of investment advice they receive.
Plan adviser marketplace The retirement plan adviser and recordkeeping industries have embarked on a frenzied race to “monetize the participant.” The ultimate target is to convert a significant portion of the $11.9 trillion in lower-margin private pension plan assets (defined benefit and defined contribution plans) into high-margin retail assets.3 It is clear to industry observers that “the winning strategy entails engaging individual participants through the participant advisory services that more and more employers and their employees are now seeking — all with an eye to one day capturing the individual.”4 There is no better hunting ground for prospective high-margin retail clients than from within a group’s retirement plan participant base that the adviser and recordkeeper are familiar with and have the implied endorsement of the employer.
1 Menickella, Brian; “Rise in 401(k) lawsuits: Understand your plan,” Forbes. https://www.forbes.com/sites/
3 Employee Benefit Research Institute, “Workplace Retirement Plans: By the Numbers,” https://www.ebri.org/docs/
2 Executive Office of the President of the United States, “The Effects of Conflicted Investment Advice on Retirement
4 Pensions & Investments, June 26, 2023 “Top retirement advisers to get bigger – or die out.”
brianmenickella/2021/07/25/rise-in-401k-lawsuits-understand-your-plan/
Savings,” February 2015. https://obamawhitehouse.archives.gov/sites/default/files/docs/cea_coi_report_final.pdf
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Conflicted investment advice occurs when the adviser’s compensation is affected by what employees do with their money.
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default-source/by-the-numbers/ebri_rsrc_facts-and-figures_011923.pdf ?sfvrsn=9b6b392f_8
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Adviser compensation model The plan sponsor faces meaningful risk by placing a conflicted adviser in a position to advise a plan participant who is facing the distribution decision. In most instances, an asset-based adviser’s compensation will be meaningfully greater if they steer the participant from the institutionally priced employer plan into a retail IRA. The most prevalent compensation model for retail wealth management services is an annual fee computed as a percentage of the total account value. Fees for retail wealth management services can range anywhere from 0.65% to 1.50% per year. Compounding the problem is that the median retail mutual fund’s annual expense ranges from 0.34% to 0.56% higher than the comparable mutual funds offered in an employer-sponsored plan.5 These meaningfully higher costs provide a significant drain on the growth of employees’ retirement nest eggs. The U.S. Department of Labor is aware of these conflicts and has been working to enact regulations that would hold the adviser community to a higher standard of conduct — that of an ERISA fiduciary — when making rollover
“
If successful, advisers will be required to give recommendations that do not affect their compensation at the expense of employees’ savings. recommendations to a retirement plan participant. If successful, advisers will be required to give recommendations that do not affect their compensation at the expense of employees’ savings.
Plan sponsor’s role Given the present industry environment, plan sponsors have opportunities to protect the interests of their plan
5 401(k) Specialist, “Rollover Rip-off,” July 1, 2022. https://401kspecialistmag.com/rollover-rout-ira-investors-pay-
significantly-more-than-401k-savers/
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{ Leadership | Fiduciary responsibility }
participants. For instance, when an employer engages an organization to serve as an investment adviser to their retirement plan or provide workplace financial wellness services to employees, the employer should research and understand the advising organization and how it generates revenue. Engaging with organizations that have embraced a fixed-dollar compensation model is the best defense. Employers should also identify potential conflicts and the impact these conflicts might have on the services they seek. The Securities and Exchange Commission requires all investment advisers to register and complete detailed disclosures within Form ADV on their ownership structure and their business practices.6 Part 2A of Form ADV will describe the various lines of business the entity is engaged in, as well as fees and other compensation they earn, and provide disclosure of the potential conflicts that exist within the practice. While reviewing these materials, employers should
ask, “What level of objectivity will they offer to my long-time retiring employee who wants an answer to What should I do with my retirement plan account when I retire?”
With great power comes great responsibility Offering a retirement benefit plan carries tremendous responsibility, not the least of which is the duty to act exclusively in the best interests of plan participants. Eliminating the amount of conflicted advice employees are exposed to may be the best retirement benefit an employer could possibly provide.
Joseph Topp, CPA, is a principal with Francis LLC in Brookfield, a plan advisory firm that provides consulting services to retirement plan sponsors and their employees. Contact him at 262-781-8950 or joseph.topp@francisway.com.
6 SEC Form ADV – Investment Adviser Public Disclosure. https://adviserinfo.sec.gov/
Join the WICPA Educational Foundation Board! The WICPA Educational Foundation is seeking members to serve on its board of directors. Some of the opportunities include: • Assisting in efforts to attract students to the profession. • Providing strategic governance in accordance with the WICPA Educational Foundation mission. • Acquiring new leadership skills. The WICPA Educational Foundation plays a pivotal role in supporting programs to improve awareness and perceptions by educating students and educators about the exciting opportunities available to accounting professionals.
To apply, visit wicpa.org/EFBoardApplication through Feb. 28, 2024.
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Questions? Contact tammy@wicpa.org.
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ATTENTION! THE CURRENT CPE REPORTING PERIOD ENDS DEC. 31, 2023 Reporting Period: Jan. 1, 2022 – Dec. 31, 2023 CPE Requirement: 80 total CPE credits Ethics Requirement: 3 Ethics CPE credits
Visit wicpa.org/CPErequirements for more information about CPE requirements.
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