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January | February 2020 | Vol. 16 No. 1 A publication of the Wisconsin Institute of CPAs |

Meet the Minion Miner Sali Sheafor, CPA | 6

Plus: Economic impact of the DNC | 12 Connect with Inspire Wisconsin | 16 New Wisconsin CPE requirements | 26


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A publication of the Wisconsin Institute of CPAs |

January | February 2020 Vol. 16 No. 1

6 Features


6 Meet the Minion miner Sali Sheafor, CPA, small firm owner and CPD lecturer, doesn’t take life too seriously, and everyone knows it — as her Minion collection shows. By Marcia Tillett-Zinzow

26 PROFESSIONAL DEVELOPMENT The new Wisconsin CPE requirements All CPAs in Wisconsin must now complete 80 continuing professional education credits during each two-year compliance period. By David K. Schlichting, CPA, PhD

12 Not business as usual The economic impact of the Democratic National Convention in July is expected to spread throughout southeastern Wisconsin. By Ken Wysocky

30 TECHNOLOGY Developing your technology vision for 2020 The end of life of many mainstream products makes it clear that you should complete upgrades and make plans to stay current. By Randy Johnston

16 Why not Inspire! Inspire Wisconsin is a statewide program designed to connect high school students with local businesses and career coaches. By Donna Pinsoneault 20 Preparing clients for new SEC regulations What do accountants and attorneys need to know about new SEC regulations that affect their clients’ financial advisers? By Julie Jason, JD, LLM

34 ACCOUNTING & AUDITING GASB updates: How far back should one go? A GASB update may mean you need to go back only one year — or back to the beginning. By Paul H. Koehler, CPA 38 HUMAN RESOURCES Combating the war for talent Executive recruiters are calling your employees right now, while you’re reading this. What can you do to keep your staff happy? By Robert Reck


30 Departments 3 Outlook | chair’s letter 4

In Touch | president & CEO’s message

10 Kudos | members in the news 33 Memorials | departed members

On Balance

January | February 2020



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: 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 2020 On Balance.

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Chair-elect Wendi M. Unger, CPA Past Chair Michael D. Akers, CPA, CBM, CFE, CGMA, CIA, CMA, PhD


President & CEO Tammy J. Hofstede Design & Layout Brett Stallman Advertising Sue Daniels

Secretary/Treasurer Katherine L. Hauser, CPA, CGMA

Editor Marcia Tillett-Zinzow

Directors Jeff Dewane, CPA, CGMA, CMA, MBA Jon C. Gaines, CPA, CGMA, MBA Patrick G. Hoffert, CPA Daniel Holzhauer, CPA Ruth A. Kallio-Mielke, CPA Wendy A. Peters, CPA Steven A. Pullara, CPA Matthew J. Schaefer, CPA, CGMA Angela C. Thomas, CPA

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OUTLOOK | CHAIR’S LETTER “I have seen firsthand that there is strength in numbers and that the unified voices of accounting professionals across Wisconsin really do make a difference.”

Be Aware, Be Involved


never considered myself to be very involved in politics. While our profession makes it important for us to stay informed of the political environment, I never really cared about the interworking of our political system. That all came to an end when I became a WICPA board member. From my involvement with the AICPA Council, which requires that every other year we go to Washington D.C. to meet with our federal legislators, to this past January when I attended my first WICPA Advocacy Day in Madison, I have quickly learned the importance of being politically aware and involved. It is important to emphasize that, in this context, being politically aware and involved does not mean picking a side. The WICPA Campaign for Political Awareness helps to ensure the accounting profession continues to have a strong presence in Wisconsin when it comes to legislative and regulatory activities. The campaign strives to protect the interests of CPAs, the accounting profession and the public by garnering bipartisan support and creating and building relationships with all our legislators. This campaign is advanced through two main initiatives: CPA involvement in our WICPA Advocacy Day and CPA contributions to our political action committee (PAC) fund. WICPA Advocacy Day gives the profession a strong presence in Madison and is critical to ensuring members’ voices are heard. Last January, more than 30 CPAs attended the event, which provided them the opportunity to meet and educate our state legislators on critical issues that affect the accounting profession. It is very evident from those meetings that CPAs are well respected and are viewed by the legislators as a resource. This has resulted in legislators reaching out to the WICA with proposed legislation for our review and input. Our united presence in Madison helps secure the profession by keeping us in a position where we can identify and combat potentially harmful legislation early in the process. Another important way to help secure the profession is through financial contributions to our PAC fund. While we often think of political support at the federal level, it is the

support at the state level that allows the WICPA to stay vigilant on issues and legislation affecting Wisconsin CPAs. These PAC contributions support the WICPA’s participation in the legislative process and help to maintain advocacy against issues such as the elimination of the CPA designation and the prospect of sales tax on services. PAC support also has helped with the successful passage of legislation addressing the continuing education requirement for license renewal and other issues that affect not only the accounting profession but also the general Wisconsin business community. I admit I was not involved, and I was not aware of the political issues that put the profession at risk. Now that I am involved, I have witnessed the critical work the WICPA and its members do to protect the profession, and I have seen firsthand that there is strength in numbers and that the unified voices of accounting professionals across Wisconsin really do make a difference. This is another great opportunity to take ownership of your profession. Consider participating in WICPA Advocacy Day, and consider making a financial contribution to our PAC. Your voice, your involvement and your financial participation are the keys to protecting our profession. Neil Keller, CPA/ABV, CVA, is partner-in-charge of tax services at Sikich LLP, Brookfield, and the 2019-2020 chair of the WICPA board of directors. Contact him at 262-754-9400 or

On Balance

January | February 2020


IN TOUCH | PRESIDENT & CEO’s MESSAGE “The feedback received from members is instrumental for the WICPA staff and I to evaluate the effectiveness of what we are currently doing and what we should be doing.”

Connecting with members


n my new role as CEO this last year, I have started meeting with members across Wisconsin to provide state and national updates as well as to hear feedback of how the WICPA can better serve its membership. I met with over 40 of our member organizations and over 150 members, along with their staff, from all over Wisconsin. My travel took me to Baraboo, La Crosse, Eau Claire, Wisconsin Rapids and Rhinelander. The organizations I visited ranged from small to large public accounting firms, family firms of four generations of CPAs, insurance companies, banks, attorney offices and medical clinics. I also took new CPA recognition on the road by having dinner and delivering gifts to those who could not attend the 2019 New CPA Banquet. These visits produced many affirmations, insights and new initiatives by organizations regarding the CPA profession. All organizations shared several issues and concerns, including the following: 1. Staffing

a. Fewer accounting graduates (“How can we make ‘CPA’ appealing again?”) b. Attracting minorities to the profession

c. College graduates unaware of the many opportunities in outer parts of the state d. No experienced staff available to hire

e. Retirements are occurring, and succession plans are limited due to staffing

f. Staff who could be promoted to the next level but don’t have their CPA license g. Changing requirements for titles and promotions for staff who are not on a partner track, in an effort to keep employees h. Having talented staff who don’t want to work busy-season hours


On Balance

January | February 2020

i. Losing students and staff due to a more compressed tax season

j. Finding a balance of work hours for staff during the entire year

2. A disinterest or lack of time for networking and social events during nonwork hours (a work-life balance issue)

3. The 150-hour requirement vs. the 120-hour requirement 4. Changes within the Wisconsin Department of Revenue processes, service and staffing 5. The need for more and relevant CPD in outer areas of the state 6. Less IRS assistance (fewer or no local offices) 7. Affordable insurance

8. Growing difficulty in finding peer reviewers

Ongoing efforts On the initiative side, many organizations are researching and developing new programs for recruitment and retention of accounting staff. • One college created a task force for students to obtain the required 150 hours in four years and changed the internship requirement from three credits to 12

• Larger organizations are hiring more non-accounting majors who can relate to clients and “speak their language” • Pilot programs with “blended” internships allow students to select two disciplines within the accounting field to learn and try out

• Development of an in-house CPA course to encourage staff to take the CPA Exam and assist them in preparation • Flexible work arrangements with telecommuting to make the profession more desirable • Performance coach training to watch for stress and “deadline fatigue,” assisting staff with better management of their workload

Opportunities During my conversations, I learned many members were unaware that our small 12-person staff services all 7,200 WICPA members. Many also had the perception that our committees were only for larger organizations and volunteer opportunities in southeastern Wisconsin. Another area where members felt the WICPA could do more is in promoting its advocacy efforts — both state and federal — to the membership. Along my visits, I heard some great stories and found many members to feature in our On Balance publication (like the CPA featured in this issue). Here are a few other suggestions I received: • Create a Young Professionals Tax Committee to give them an opportunity to share their experience and questions

The feedback received from members is instrumental for the WICPA staff and I to evaluate the effectiveness of what we are currently doing and what we should be doing. We are already looking at several opportunities for developing new marketing materials and initiatives to continue to fill the CPA pipeline and serve the needs of our members. I very much enjoyed visiting with our members, answering their questions about the WICPA and learning more about every one of them personally. I would like to thank these members and organizations for taking the time to meet with me. Connecting with our members is ongoing. I will continue to reach out and visit with members and their organizations, so watch for my invitation! If you would like to request a specific date and time for me to meet with you and your company, please contact me.

• Create a Wisconsin Department of Revenue Advisory Committee • Bring back the Fall Focus events with state and national updates and inexpensive CPD • Bring back the Brewers Outing

Tammy J. Hofstede is president & CEO of the WICPA. Contact her at 262-785-0445 ext. 4518 or

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On Balance

January | February 2020


Meet the

Minion Miner:

Sali L. Sheafor, CPA By Marcia Tillett-Zinzow


anging in the conference room at TAP Consulting LLC is a sign that reads “Never Take Life Too Seriously. Nobody Gets Out Alive Anyway.” It’s the same quote the company’s founder and principal, Sali L. Sheafor, CPA, uses as a tagline below her email signature. “Life is kind of a joke,” she said. “You have to have fun with it.” And she definitely has fun with it, by the looks of her office. There are Minions everywhere. Among the Minionthemed items that clients have given her are a handmade crocheted hat; a bracelet plucked out of a toy-vending machine; a disposable McDonalds Happy Meal toy, which was about to be thrown away when her client rescued it and brought it back from New York; a pin cushion; a coffee mug; a pencil holder; and a bottle of 3-in-1 shampoo and conditioner. One of her employees makes her a Minion cross-stitch every year, and her daughter gives her Minion valentines in February. A coworker once gave her a Lego Minion; another client brought her a lunchbox with the words “I Honk for Minions.” “I got started with these Minions, and I don’t know what it is, but they just make me giggle,” Sheafor said. “And they make other people laugh, too! The lady who brought me the lunchbox said she couldn’t even look at a Minion without thinking of me, and I said, ‘That makes me even happier because I just put a smile on your face, and I didn’t have to do a darn thing.’”


On Balance

January | February 2020

As for the sign in her conference room, that was given to her by a client who saw it in a flower shop when he went there to pick up poinsettias for his wife’s business. “He bought it, brought it home to his wife and told her, ‘We’re giving this to the accountant for Christmas,’” said Sheafor. Not everything in her life is fun and games, however. Starting a public accounting firm is certainly no walk in the park. Sheafor’s business’s name, TAP Consulting LLC, has a dual meaning. “In the public realm, I tell people that TAP stands for tax and accounting professional,” she said. “But in reality, it stands for trust and prayer — because

Photography by Andy Manis when I started, I didn’t have any clients, and I didn’t know if I was going to survive or not.” Not only has she survived, but her firm is now nearly 10 years old, and she has clients in several states. She has three staff members, one of whom is her daughter, Ashley Byom, who has a degree in early childhood and special education but has exhibited an intuitive knack for accounting. Sheafor also is a discussion leader for Surgent CPE, a national provider of continuing education courses for CPA firms and state CPA societies.

Sheafor takes life with a grain of salt, as evidenced by the sign in her conference room.

On Balance

January | February 2020


Sheafor gives advice to Amy Stodola, a client who is a financial advisor at Edward Jones.

Nontraditional beginnings Sheafor was a nontraditional student at University of Wisconsin – Platteville, having gone back to college at age 23 after starting her family. Her daughter was two years old at the time, and her son, Alex, was not yet born. Sheafor and husband Lonnie had planned their son’s arrival so it wouldn’t conflict with the beginning of Sali’s last year in school. “We wanted a June baby,” she said. “But our plan was delayed, so he didn’t get here until Aug. 16 — a week before school started.” At the time, the Sheafors lived in Richland Center, a small farm community in the southwestern part of the state, and the one-hour commute to and from Platteville as a brandnew mom made the trip “interesting,” in Sheafor’s words. However, she prevailed, and in May 1998, Sheafor graduated with a bachelor’s degree in accounting. She found work right out of school at a small local firm, Halverson CPA Inc. The firm’s owner, Joseph Halverson, CPA, mentored her throughout the five years she was with his firm, including seeing her though the CPA Exam and licensure. Training someone in accounting requires patience, and according to Sheafor, Halverson had it in spades. He took time to explain things, even during tax season — not an easy feat when you’re doing a large amount of work and working excessive hours.


On Balance

January | February 2020

“But he would slow down and explain how I did things wrong; and when I had questions, he took the time to answer them,” Sheafor said. “He didn’t just ignore the fact that I did something wrong. He was never mean about it, but he would bring it to my attention in a very quiet way and just say, ‘This is what I found, and this is why it’s wrong.’”

Into the private sector After Sheafor became certified, she was offered a job as chief financial officer for a private company. She was only CFO in name, however. Ostensibly, it meant she did everything in the accounting department. “When I first took the job, the books were a pretty big mess,” she said. “Nothing reconciled, nothing worked, yet they were going through audit every year — and it was taking two weeks to get through their audit.” Eager to prove herself — and because she’s a CPA — Sheafor worked long hours the summer after her hire so she’d be prepared for the next audit. She knew she needed to get the accounts straightened out and reconciled, and she finally got everything to tie out about two weeks before the audit came down. “Cleaning up the accounts took it from a two-week audit down to a three-day audit, so I felt pretty good about it,” she said. “The auditors were surprised because they didn’t know all this was coming or if I even knew what I was doing. They had still planned to be out there for a while.”

Once she got the company’s books in order and closed out their month, she literally worked herself out of a job. Getting all the work done was taking only about 20 hours a week, and the rest was downtime. So she went to “the powers that be” and suggested they start paying her hourly instead of her CFO’s salary. But they said no, they needed someone full time. “I felt that was insane,” Sheafor said. “There just wasn’t that much to do.”

driving some young professionals right into the private sector — the nontraditional Sheafor embraces everything about it.

The work she did have she found boring — performing the same tasks day in and day out with little variation. She consulted with her husband; they weighed their options and decided it was time for her to move on.

“I look forward to it every year,” she said. “It’s just an incredible time. It’s a rush better than anything I’ve ever experienced. I wouldn’t change it for the world.”

“That experience made me realize how much I valued public accounting.”

Back to her beginnings While public accounting has a reputation for being challenging and demanding — the long hours of busy season

“You get to work with so many amazing people,” she said. “Some of them you see only once a year, and then you get to hear about everything that’s been happening in their lives. You cry with them over their personal losses, and you celebrate the joyous occasions like new babies and marriages.” But what about tax season?

Besides, if the going gets tough, there are always Minions.

Marcia Tillett-Zinzow is a Wisconsin freelance writer and editor. Contact her at

AICPA Council Update WICPA President & CEO Tammy Hofstede and AICPA Council representatives attended the October AICPA Fall Meeting of Council. Topics covered include:

Unger and Hofstede attend AICPA Leadership Conference WICPA Chair Elect Wendi Unger (center left), partner at Baker Tilly in Milwaukee, attended the AICPA and CPA/SEA Leadership Conference in Seattle, Oct. 18-20, 2019. Wendi had the opportunity to meet and connect with AICPA Vice Chair Tracey Golden (center right), AICPA President and CEO Barry Melancon (left) and other representatives from the AICPA. WICPA President & CEO Tammy Hofstede (right) accompanied Wendi to the conference, which is designed to help incoming leaders from state CPA societies prepare for their year as board chair. It also provides opportunities for these leaders to interact with one another and other state societies. Wendi’s term as chair of the WICPA board of directors will begin May 1.

• Update on the Association of International Certified Professional Accountants • CGMA • Update on the profession • Update from the National Association of State Boards of Accountancy (NASBA) • Pipeline trends • CPA Evolution • Technologydriven transformation of firms • PCPS: CPA firm top issues and small firm support

On Balance

January | February 2020



Kyle Carr

Chris Cholka, CPA

Tina Funk, CPA

Shaun Geracie, CPA

Allyson Hofstede, CPA

Doug Ballweg, CPA, has been promoted to CEO of Delta Dental of Wisconsin, where he has been employed since August 2010, most recently as chief operating officer. Erin Belby, CPA, has joined the La Crosse Community Foundation as finance director. Previously, she was an audit manager for Johnson Block & Co., where she primarily oversaw audits of La Crosse area nonprofits. Andrew Burg, CPA, has joined Reinl Accounting Inc., Chilton, as senior associate. He is also treasurer and board member of WisconsinSibs Inc., a nonprofit providing services for brothers and sisters of individuals with special needs. Kyle Carr has joined Wegner CPA in the newly created position of talent acquisition specialist. He holds a BBA in marketing with a professional sales emphasis. Chris Cholka, CPA, has been promoted to accounting manager of Cousins Subs. Dayna Conradt has been promoted from staff accountant to manager at KerberRose’s Clintonville office. Tim Dyer, CPA, CFO of the AIDS Resource Center of Wisconsin, was named by the Milwaukee Business Journal as one of the publication’s CFOs of the Year. Tina Funk, CPA, has joined Huberty, a CPA-led professional services firm, as senior manager of the firm’s Fond du Lac office. Previously, she was senior manager at CliftonLarsonAllen (CLA) and had been a senior tax manager for Schenck SC for more than 17 years prior to their merger with CLA. Shaun Geracie, CPA, has assumed the position of VP of Finance for KEEFE Real Estate and will be located at Keefe’s Lake Geneva Business Center. He previously worked at Baker Tilly. Nicholas Hahn, CPA, has been named risk consultant partner for RSM US LLP, Milwaukee, where he provides internal audit and specialized risk consulting services. Allyson Hofstede, CPA, has been promoted by KPMG LLP, Milwaukee, to senior associate, audit. Evan Y. Lin, JD, managing member of Lin Law LLC, has been named to the 2019 Wisconsin Super Lawyers list by the publishers of Super Lawyers® magazine. He has made this list each year since 2015. Zach Linsmeyer, CPA, has been promoted by KerberRose to senior manager at the firm’s Shawano office.

Evan Y. Lin, JD

Tramaine Robinson

Daniel J. Walsh, CPA, JD

Bradley Weckwerth, CPA

Andy Mathes, CPA, has been promoted by KerberRose to senior manager at the firm’s Oshkosh office. Matthew Metzig, CPA, has been hired by RSM US LLP as a partner in assurance. He has more than 13 years of public accounting experience. Nicholas Pierce, CPA, recently joined Alliance Tax and Accounting Service LLC, Brookfield, as tax resolution case manager. Brad Quade, CPA, has joined First Business Financial Services Inc., Madison, as deputy chief credit officer. Zach Rieboldt, CPA, JD, has been named state and local tax partner for RSM US LLP, Milwaukee, where he provides state and local tax consulting services. Tramaine Robinson has joined Sitzberger & Co. S.C. as a staff accountant. Sitzberger & Co. is a regional public accounting firm headquartered in Brookfield. Melanie Stellmacher, CPA, a manager and QuickBooks ProAdvisor at KerberRose’s Oshkosh office, was promoted to senior manager. Daniel J. Walsh, CPA, JD, an attorney with One Law Group S.C., was selected by his peers for inclusion in The Best Lawyers in America©, Wisconsin 2020 edition, in the Elder Law field. Dan has been included in Best Lawyers® every year since 2010. Bradley J. Weckwerth, CPA, has been named president and managing shareholder of Vrakas CPAs & Advisors, Brookfield. To ensure a smooth transition, he will serve until June in co-managing capacity with the firm’s former president and managing shareholder, James A. Holmes, CPA, who will continue with the firm as a tax shareholder. Scott J. Wildman, CPA, shareholder-in-charge of Vrakas Business Valuations Inc., received the 2019 Kathleen M. Baird Dolphin Award given by The Collaborative Family Law Council of Wisconsin.

FIRM NEWS Professional services firm Sikich announced that it has agreed to acquire Alexandria, Virginia-based public accounting firm Halt, Buzas & Powell Ltd. The deal marks Sikich’s entry into the Washington, D.C., and Baltimore metro markets and expands its presence on the East Coast.

Want your new job, promotion or award mentioned in Kudos? H Email your announcement and photo in JPG format to H


On Balance

January | February 2020


In WisconsinÂŽ, we can. Gulfstream operates service centers all over the country, but when they needed to grow in the state, they turned to us. We worked together to identify tax credits that enabled them to pursue a $39.5 million expansion project and bring over 170 new jobs to the region. Since the new facility opened, Gulfstream has continued to benefit from our highly skilled workforce, responsive supply chain and business-friendly environment. Just think what we could make happen for your business. See the whole story at

On Balance

January | February 2020


Not Business as Usual The economic impact of the upcoming Democratic National Convention is expected to spread throughout southeastern Wisconsin businesses


On Balance

January | February 2020

By Ken Wysocky


ith the Democratic National Convention a scant six months away, Milwaukee-area businesses are busy preparing for a nearly unprecedented influx of more than 50,000 visitors. At the same time, they’re also trying to gauge how the expected $200 million regional economic impact will affect their businesses. For some companies, the high-profile event, scheduled for July 13-16 at the Fiserv Forum, will prompt a bump in revenue. Others expect it to boost awareness of Milwaukee brands and products. And others will face labor challenges, not to mention stringent downtown security measures that could make serving existing customers difficult. But one thing is certain: An event this big (envision a Harley Davidson birthday bash, Summerfest and the Wisconsin State Fair all held on one weekend) is certain to result in anything but business as usual for Milwaukee and southeastern Wisconsin. “It’s going to be a great week and a great thing for the city of Milwaukee,” said Doug Neis, CPA, vice president, chief financial

It’s going to be a great week and a great thing for the city of Milwaukee. — Doug Neis, CPA officer and treasurer of The Marcus Corp., which owns three hotels in Milwaukee (with a total of 1,255 hotel rooms) and one hotel in Lake Geneva. The corporation operates 20 bars and restaurants within those hotels and also owns numerous movie theaters in the Milwaukee area. “From our perspective, it’s a chance to showcase to the world everything that Milwaukee offers.”

Demand for lodging To estimate the convention’s business impact, Marcus officials talked to hotel operators in the cities where the last two Democratic conventions were held (Philadelphia in 2016 and Charlotte, North Carolina, in 2012). They also drew from their own experience with major events in Milwaukee, Neis said. “We formed a committee that represents all of our key functional areas, such as sales, IT and operations,” he explained.

On Balance

January | February 2020


“Everyone is focused on what’s happening at the Fiserv Forum, but the fact is there’ll be a lot of smaller events going on throughout downtown … and we need to be prepared for all those special events. “We’re already sold out in Milwaukee and at the Grand Geneva (Resort & Spa) in Lake Geneva, so certainly it will be a great week for us,” he added. “But we also expect it to affect business leading up to the convention and even afterward.” The huge influx of visitors will require an estimated 15,000 hotel rooms. And with only about 5,000 rooms in downtown Milwaukee, demand for lodging will spread throughout the metropolitan area and southeastern Wisconsin, officials have noted. Security measures at hotels — especially those that host high-ranking dignitaries — will require extra training for employees. The Hilton Milwaukee City Center, a Marcus property, will serve as the home base for the Democratic National Committee. But aside from that, Neis says he doesn’t know which high-level figures will be staying at Marcus properties. “We’ll find out all of that later,” he said. “But we will be well prepared. This isn’t our first rodeo; we’ve hosted presidents and other dignitaries at our hotels before.”

Security challenges Security also will be top of mind for officials at Beer Capitol Distributing LLC, but for a different reason. The malt-beverage distributor delivers to bars and restaurants a variety of beer and alcoholic libations, such as hard cider and hard seltzers, made by more than 30 vendors, including Molson Coors Beverage Co., said Mike Garvey, CPA, chief financial officer of the Sussexbased company. “Our excitement is mixed,” Garvey said. “Obviously, it’s great for the community and Wisconsin — the publicity will be fantastic. But it comes at a time of year when we already have a lot going on … and security issues will likely challenge our ability to deliver products to our existing customers.” The company is in “wait-and-see mode” about downtown security measures. But Garvey said he’s been told there will be a defined, cordoned-off area around the Fiserv Forum, which would include many bars and restaurants the company serves.


On Balance

January | February 2020

Our excitement is mixed. Obviously, it’s great for the community and Wisconsin — the publicity will be fantastic. But it comes at a time of year when we already have a lot going on … and security issues will likely challenge our ability to deliver products to our existing customers. — Mike Garvey, CPA “Right now, it’s not clear how vehicles will be allowed to pass through that surrounding area,” he noted. “We’re assuming that we will have one shot at the beginning of the convention to get product to all of our existing customers within that [cordoned-off ] footprint … and we’re told that every keg of beer will be inspected.” If entry is allowed only once during the convention, Garvey said the company will examine its options. One work-around might include parking semi-trailers filled with beer kegs in a secured area within the security zone and having a small number of employees camp out there to deliver products as needed, he says.

The company’s numerous locations in southeastern Wisconsin will help increase sales revenue because many convention delegates will travel significant distances to and from Milwaukee each day. “That will allow many delegates to enjoy our products at their convenience, not just while they’re at the convention,” explained Kate Kazan, the company’s public relations manager.

“We’re concerned because most of our customers within that footprint don’t have enough storage capability to keep enough product to carry them through the whole event,” he said. “So it definitely poses some logistical challenges.”

It’s an exciting time because of the increased brand exposure.

In terms of a revenue spike, Garvey said the convention certainly won’t hurt sales. But any financial gains may be offset by increased labor costs. For instance, overtime pay might rise significantly if employees need to stay overnight in the downtown security zone. “We’re trying to figure out how that’ll work from a payroll perspective,” he said. “In the end, it might be a wash financially. It certainly won’t be a financial home run for us. You also have to consider that some big events [for which Beer Capitol supplies products] might be postponed until later or not held at all. So our revenue might rise on one end but leak out the back end on others. “But in the end, any event that brings in that many people to Milwaukee is a big plus,” he added. “Don’t get me wrong — we’re very happy the convention will be held here. But it’s just not going to drop pots of gold on everyone’s lawns.”

Sales bump, brand exposure At Cousins Subs, officials expect the political convention will expose its brand to many new customers. The company has 71 stores in the greater Milwaukee area and southeastern Wisconsin and 92 stores overall statewide. Cousins also operates six stores in the Chicago metropolitan area, said Chris Cholka, CPA, the company’s accounting manager. “It’s an exciting time because of the increased brand exposure,” he said. In addition, Wisconsin-based products that either are sold in stores or used in its Cousins' sandwiches and side orders also will receive more exposure. Cholka says those products include root beer made by Sprecher Brewing Co. Inc.; cheeses from a variety of local companies, including Sargento Foods Inc.; baked treats made by Best Maid Cookie Co.; and meats from Johnsonville LLC, Badger Ham and Klement’s Sausage Co. Inc. “We anticipate about a 5% bump in sales,” Cholka said. “It’s a bit of an educated guess; there’s no exact science behind it, but that’s been our experience from other major events that bring a lot of people into the area for a short period of time.”

— Chris Cholka, CPA More workers needed Both Marcus and Beer Capitol may have to hire more employees to handle the increase in business, Neis and Garvey said. On the other hand, Cholka said Cousins will not hire additional employees during the convention. Considering the labor shortage that afflicts many area businesses, finding additional employees isn’t easy. But Neis said it may be necessary because bars and restaurants likely will be allowed to stay open later than normal. “They’re talking about extending bar hours to 4 a.m.,” he noted. “So in the coming months, we’ll be looking at our staffing needs to be sure staffing levels are optimized.” “I wouldn’t be surprised if we added more people,” Garvey said. “We may augment with temporary employees, or we may just ask existing employees to work a lot of overtime. There’s a lot that’s yet to be determined.” Overall, however, Neis expects the convention will produce a dramatic and long-term impact that will transcend the four-day convention and put Milwaukee on the radar as a destination for major events. He said, “I hope and believe that after people see what Milwaukee has to offer and what its hotels and restaurants have to offer, representatives from other groups and conventions will say to themselves, ‘Wow, we never thought about holding events in Milwaukee before, but we certainly will going forward.’” Ken Wysocky is a freelance writer based in Whitefish Bay. Contact him at 414-962-6202 or

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Why Not Inspire! By Donna Pinsoneault


hink back. When did you first consider a career in accounting? Students today start exploring career options as early as sixth grade. By the time they’re in high school, they are seeking opportunities for career coaching, job shadowing and youth internships. That’s where Inspire Wisconsin comes in — and where CPAs can help stem the shrinking talent pool in the profession. Evolving since 2013, Inspire Wisconsin is a statewide program designed to connect high school students with local businesses and career coaches. The program also helps companies shape their future workforce by engaging with students in the early stages of career decision-making. In accordance with 2013 legislation that mandated academic and career planning (ACP) for grades 6 through 12, Wisconsin’s Department of Public Instruction (DPI) required


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every district to implement ACP by the 2017-2018 school year. To support implementation in schools, DPI provided a web-based information system to help students explore careers and plan for their futures. That platform was Career Cruising, a software tool already used by libraries, schools and career centers to help people learn about and plan careers. In 2019, the platform was upgraded and renamed Xello (pronounced “Zello”). Xello is easier to use and still allows students to access Inspire, the tool that enables students to interact directly with employers in their region. Students can learn firsthand about work content and career skills needed by specific companies and discuss career possibilities with field-based coaches. Adrian Crabb, who serves as talent and education specialist for the Madison Regional Economic Program (MadREP)

Our initial focus was on the software and its ability to facilitate connections between employers, students and educators. — Adrian Crabb

and coordinator for the statewide Inspire Wisconsin program, explained that the web-based system allows students to not only learn about a certain occupation but also connect with companies in their area that hire people in that occupation. The program started out with one deployment in Racine County and then spread throughout the state, focusing first on filling the software with company connections and making sure those connections were being made. Software message boards called “huddles” allow students to ask questions about a particular career or company. “Our initial focus was on the software and its ability to facilitate connections between employers, students and educators,” Crabb said. “The software was a starting point, but now we are pivoting away from emphasis on the software because there’s a lot more success to be had with an intermediary focus. We’re leveraging the software to help employers create meaningful career-based learning experiences that are valuable to them as well as to the students.” Inspire Sheboygan County has been a model for that body of work. It started as a nonprofit organization with a single mission: to provide academic and career planning services to school districts and to help employers connect with educators and students. The Inspire Sheboygan group goes out to schools to learn about their needs and then goes out to companies to make specific

connections to meet those needs. They also consult businesses to learn what their needs might be and then set up different careerrelated events around certain subject areas. Employers and schools invest in those services and, thus, fund the operation. That model is where the rest of the state deployments are headed. “We focus solely on building the partnerships,” said Nikki Kiss, coordinator for Inspire Sheboygan County. “We’re in our sixth year and have grown every year. We’re seeing a major uptick now, tracking about 300% more growth.” During the 2018-2019 school year, Inspire Sheboygan worked with more than 12,000 students, 110 employers and 431 career mentors. They also helped set up 600 job shadows and 175 mock interviews and provided guest speakers, career fairs and youth co-op opportunities. “We step in as a kind of outside ACP coordinator to help businesses and schools get together in meaningful ways,” Crabb said. “The whole Inspire initiative is moving to provide intermediary services to businesses and schools and meaningful experiences for students to learn about careers. That will do a lot more than just a software platform where people can ask questions and find opportunities.” Dave Mancl, director of the Office of Financial Literacy for the Wisconsin Department of Financial Institutions (DFI),

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We support the overall concept of the initiative and promote it as much as we can. If CPAs connect their organizations with schools, it can be a pathway for future accountants. — Dave Mancl says department personnel are “big believers” in the concept. “I think it’s a game changer if we do it right,” he said. “We support the overall concept of the initiative and promote it as much as we can. If CPAs connect their organizations with schools, it can be a pathway for future accountants.” For example, a student considering accounting as a career could directly connect with a CPA in a private company or a public accounting firm to learn more about the profession. The connection could be a major motivator for the student to pursue certification. The DFI has been very proactive with financial education and strives to support educators in teaching financial literacy in the classroom, which strongly interconnects with ACP and Inspire. “Talking about what kinds of careers to explore and what career path to take will also inform a student about the kind of education that would fit that pathway,” Mancl said. “It goes into how to afford an education, how to budget for student loan repayment, what someone in that career potentially earns and how one might budget in the future. It quickly gets into the numbers, and that’s a good thing.” Eight regional Inspire programs coordinate the initiative across the state: Inspire Madison/Southwest Wisconsin, Inspire Southeast Wisconsin, Inspire New North, Inspire


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Grow North, Inspire Central Wisconsin, Inspire 7 Rivers, Inspire Connections and Inspire Northward. Each region has specific contact individuals. “So if a CPA in Rhinelander wants to find out how to get involved locally, there is someone they can call who will help them,” Mancl said. “Students in the area might want to do career shadowing, have a conversation with a career coach or volunteer at an employer’s business. It’s a way for CPAs to get their company’s brand out there in front of potential future employees.” An interactive map on the Inspire Wisconsin website delineates the regions and lists program staff when a region is clicked. “But it’s important to know that merely applying to provide career coaching or job shadowing opportunities doesn’t get a person into the program,” Mancl said. “For security reasons, professionals who apply are thoroughly vetted before they start working with students.” Two metrics are being used to measure the success of the program: interactions between students and career coaches, and the number of career-based learning experiences students have engaged in. In the Inspire Madison region, for example, approximately 76,000 students had access to Xello/Inspire in the 2018–2019 school year. Statewide, that number is estimated to be over 250,000. In 2018–2019, some 1,492 companies and 1,855 career coaches participated on the platform. Collectively, they offered 5,231 career-based learning experiences statewide. “It’s really about educating young people about what their options are,” Crabb said, “and then giving them a chance to have some type of experience in which they get a little flavor of those options — hopefully, cultivating them to go in that direction for school or whatever they need to do after school. Mentoring and career coaching relationships can last into college.” To learn more about Inspire Wisconsin, go to There you can click on an Inspire region to find the contact person for your area. Donna Pinsoneault is a freelance writer based in Brookfield. Contact her at 262-408-7167 or

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Preparing Clients for New SEC Regulations What do accountants and attorneys need to know about new SEC regulations that affect their clients’ financial advisers? By Julie Jason, JD, LLM


lients of accountants and attorneys are bound to ask questions about new SEC regulations that affect their relationships with their financial advisers. To prepare you, here’s the background, along with questions you may be asked.


When the U.S. Securities and Exchange Commission (SEC) issued new regulations a few months ago, they didn’t spare any paper. That is an indication of the complexity of the subject of the regulation of financial advisers.


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The SEC’s four 2019 releases The SEC issued four important releases on June 5, 2019, highlighting rule-making that has been in the works for decades. The lengths of the first two releases will tell you something. The SEC has a lot to say about the topic of who’s who on Wall Street and why Main Street investors like your clients should care. 1. 770-page “Regulation Best Interest: The Broker-Dealer Standard of Care” (final rule)

2. 564-page “Form CRS Relationship Summary; Amendments to FORM ADV” (final rule) 3. 42-page “Commission Interpretation Regarding Standard of Conduct for Investment Advisers” 4. 28-page “Commission Interpretation Regarding the Solely Incidental Prong of the Broker-Dealer Exclusion From the Definition of Investment Adviser”

2018 releases This follows earlier rule-making proposals from April 18, 2018, on the same subjects. These 2018 releases show the thinking, research and survey data that went behind the final adoption of rules in 2019, including focus group studies of investors. 1. 471-page Form CRS Relationship Summary; Amendments to Form ADV; Required Disclosures in Retail Communications and Restrictions on the Use of Certain Names or Titles (proposed rule) 2. 408-page Regulation Best Interest (proposed rule) 3. 38-page Proposed Commission Interpretation Regarding Standard of Conduct for Investment Advisers; Request for Comment on Enhancing Investment Adviser Regulation (proposed rule)

Thousands commented After the 2018 releases, people who knew about the proposals wanted to share their opinions. Thousands of comment letters made their way to the SEC, on both the Best Interest proposal and the CRS proposal, including a letter from me.1

Financial “advisers” or financial “professionals”? Financial advisers who work for stand-alone brokerdealers, stand-alone registered investment advisers and dual registrants (registered as both broker-dealers and investment advisers) will provide their customers/ clients a new disclosure document called Form CRS. The term “financial adviser” will no longer be appropriate in describing representatives of broker-dealers, only those who work for registered investment advisers.2

New CRS will be written in succinct, plain English The CRS is intended to provide “succinct, plain English information” to retail customers (your clients) “about the relationships and services” firms offer. It will help your clients understand “the fees, costs, conflicts of interest and required standard of conduct associated with those relationships and services, and whether the firm and its

financial professionals have reportable legal or disciplinary history,” said SEC Chairman Jay Clayton in his June 5, 2019, “Statement at the Open Meeting on Commission Actions to Enhance and Clarify the Obligations Financial Professionals Owe to Our Main Street Investors.” That’s quite an undertaking, given the fact that most people don’t even know that there are differences between financial professionals.

What to expect This is what to expect: Your clients’ financial professionals will provide them with an easy-to-read, two-page (not longer) CRS that follows a mandated question-and-answer format presented in a prescribed order. (Dual registrants are limited to four pages.) The SEC’s goal in providing this structure is to enable investors to compare CRS forms from different firms. The stated goal is to “promote consistency and comparability among different relationship summaries.”

The CRS is a summary The CRS will cover a summary of fees and costs, a description of ways the firm makes money, certain conflicts of interest and standards of conduct. Firms will include disclosures about financial professionals’ compensation. Firms will also be required to indicate whether any of their financial professionals have reportable disciplinary history. The CRS will link to, a page on the SEC’s investor education website that will offer educational information about investment advisers, broker-dealers, and individual financial professionals.

Conversation starters A rather unusual new requirement in my view is to include a series of mandated questions (with no answers) that the SEC calls “conversation starters.” The intention is to help retail investors “dialogue with their financial professionals about their individual circumstances.”

Type of firm The first question depends on the type of firm the client is interviewing, but the rest are identical for all firms, whether they are stand-alone broker-dealers, investment advisers, or dually registered firms. Here is Question 1 (from CRS Item 2): For a standalone broker-dealer: “Given my financial situation, should I choose a brokerage service? Why or why not?” For an investment adviser: “Given my financial situation, should I choose an investment advisory service? Why or why not?” For a dual registrant: “Given my financial situation, should I choose an investment advisory service? Should I choose

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a brokerage service? Should I choose both types of services? Why or why not?”

Remaining questions The remaining questions are identical irrespective of the type of firm. Question 2: “How will you choose investments to recommend to me?” Question 3: “What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?” Question 4: “Help me understand how … fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?” Question 5: “How might your conflicts of interest affect me, and how will you address them?” I like this question in particular, but it takes some knowledge to make sense of it. The rationale behind it is this: The question “underscores for retail investors [your clients] that investment advisers and broker-dealers have conflicts that may create incentives to put their interests ahead of the interests of their retail clients and customers,” according to the SEC. What’s a potential conflict? Proprietary products, thirdparty payments, revenue sharing, principal trading, the payment of fees to someone to refer clients. Question 6: “As a financial professional, do you have any disciplinary history? For what type of conduct?” Question 7: “Who is my primary contact person? Is he or she a representative of an investment adviser or a brokerdealer? Who can I talk to if I have concerns about how this person is treating me?” How these questions will be answered by the financial professional presenting the CRS will vary from person to person. Firms will be training their representatives. It remains to be seen how Main Street investors will react.

Did the SEC create a new standard of care? Is there a new standard? “[R]egardless of whether a retail investor chooses a broker-dealer or an investment adviser (or both), the retail investor will be entitled to a recommendation (from a brokerdealer) or advice (from an investment adviser) that is in the best interest of the retail investor and that does not place the interests of the firm or the financial professional ahead of the interests of the retail investor,” quoting from the SEC’s June 5, 2019, Fact Sheet.


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The use of the term “best interest” for both investment advisers and brokers can raise a question on the part of retail investors about whether the SEC changed the legal standards of care that apply to brokers vs. investment advisers.

Investment advisers are fiduciaries Before the issuance of the new rules, a fiduciary standard of care, the highest under the law, was required of registered investment advisers. That has not changed. “An adviser’s fiduciary duty is imposed under the Advisers Act in recognition of the nature of the relationship between an adviser and its client — a relationship of trust and confidence. The adviser’s fiduciary duty is principles-based and applies to the entire relationship between the adviser and its client. The fiduciary duty follows the contours of the relationship between the adviser and its client, and the adviser and its client may shape that relationship by agreement, provided that there is full and fair disclosure and informed consent.”3 “An investment adviser’s fiduciary duty under the Advisers Act comprises a duty of care and a duty of loyalty,” quoting from the SEC’s Fiduciary Interpretation3 issued June 5, 2019. This requires an adviser to “adopt the principal’s goals, objectives, or ends.” Using the term, “best interest” does not change that higher fiduciary requirement for investment advisers. “[T]he [registered investment] adviser must, at all times, serve the best interest of its client and not subordinate its client’s interest to its own. In other words, the investment adviser cannot place its own interests ahead of the interests of its client. This combination of care and loyalty obligations has been characterized as requiring the investment adviser to act in the ‘best interest’ of its client at all times.”3

Brokers are not fiduciaries The SEC considered increasing the standard of care for brokers to that of the higher fiduciary that applies to registered investment advisers, but it did not. However, the SEC did create a new standard for broker-dealers: that of “best interest” as defined in Regulation Best Interest, which replaces “suitability.” How this new best interest standard will be applied is still to be seen. As Jamie Hopkins, director of retirement research at Carson Wealth, wrote, “this rule presented a perfect opportunity to firm up what “best interest” means, but the SEC declined to do so.”4

A moment in time? Or at all times? There are key differences between the best interest standard that will apply to broker-dealers and the fiduciary standard that

applies to registered investment advisers. The differences are reflective of differences in the two business models. “For example, an investment adviser’s fiduciary duty generally includes a duty to provide ongoing advice and monitoring, while Regulation Best Interest imposes no such duty and instead requires that a broker-dealer act in the retail customer’s best interest at the time a recommendation is made.” We do know, however, that the broker’s “best interest” standard applies at the moment in time of a recommendation or transaction-by-transaction but does not apply on an ongoing basis. In addition, brokers generally have no duty to monitor the account. In contrast, the investment adviser’s fiduciary duty applies to the entire relationship between the investment adviser and client: The investment adviser must act in clients’ best interest “at all times.”

Timing for clients of investment advisers Investment advisers are required to give the CRS to potential clients before or at the time the firm enters into an investment advisory contract with them. Existing clients will receive their CRS in June 2020. The firm has to file the CRS with the SEC online (through IARD), where Form ADV Parts 1 and 2 are now filed. The CRS will be called ADV Part 3.

Timing for customers of broker-dealers Customers of broker-dealers will receive a CRS “before or at the earliest of: (i) a recommendation of an account type, a securities transaction, or an investment strategy involving securities; (ii) placing an order for the retail investor; or (iii) the opening of a brokerage account for the retail investor.” Broker-dealers will file their CRSs with the SEC through Web CRD.

Timing for customers of dually registered firms Dual registrants must deliver the relationship summary at the earlier of the delivery requirements for the investment adviser or broker-dealer. Dual registrants will file both through Web CRD and IARD.

What’s next? The key date is June 30, 2020. By then, your clients will be receiving a Form CRS from their financial professionals, whether they work for broker-dealers or investment advisers. At that time, broker-dealers will also be required to comply with Regulation Best Interest.

Why are these developments important to you as a trusted adviser? As their clients’ trusted advisers, accountants and attorneys need to be prepared to answer questions that likely will arise out of these new rules. For example: 1. What is this new CRS disclosure document, and why am I getting a copy? 2. Why did the SEC adopt this new requirement? 3. Should I bother reading the CRS and comparing the CRSs of different firms? 4. What should I make of my financial professional’s answers to the conversation starters? How do I know they are correct? Should I record the answers? 5. Do these new rules change my relationship with my financial professional? 6. Under what circumstances should I change my financial professional, given the information in the CRS? 7. Should I change financial professionals if I learn they have disciplinary disclosures? 8. What do I make of the conflicts of interest they tell me about? How do I judge whether I can live with them, such as getting paid more if I buy certain financial products? 9. Should I change financial professionals if I learn the services they provide are not what I understood them to be? For example, what if I thought I was getting ongoing monitoring, and then I found out that I was getting “recommendations” instead, with no ongoing monitoring? These and many more questions are coming as these new rules have a chance to sink into the fabric of financial advice. Look for additional posts on this topic on my blog at https:// in the future. 1 2 3 4

Julie Jason, JD, LLM, is the founder of Jackson, Grant Investment Advisers Inc., Stamford, Connecticut. She is an award-winning columnist and author who shares insights gained from a lifelong career in money management and law. Contact her at or 203- 322-1198. This article was originally posted on and is used with the author’s permission.

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Friday, May 8 at 5 p.m. The Ingleside Hotel Join us for the WICPA’s signature event of the year to: • Recognize membership milestones.

• Present the 2020 Excellence Awards.

• Elect the 2020–2021 Board of Directors.

• Enjoy dinner, drinks and networking.

Complimentary for WICPA members. Registration is required to attend.


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For more information and details, visit

January | February 2020

Volunteer this April for

Reading Makes ¢ents Sponsored by the WICPA Educational Foundation

Help Students Get Money-Smart April is National Financial Literacy Month and a great opportunity for you to help students get smart about money by reading to an elementary school class about the basics of money.

The WICPA Educational Foundation will provide everything you need. Express your interest by updating your profile at or contact Amanda Armitage at 800-772-6939 ext. 4511 or

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{ Professional Development | License renewal requirements }

The New

Wisconsin CPE Requirements

By David K. Schlichting, CPA, PhD


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he requirements to renew a CPA license in Wisconsin have been changed. Beginning with the current two-year compliance period, ending Dec. 15, 2021, the license holder is required to certify under penalties of perjury that they have fulfilled the recently enacted continuing professional education (CPE)* requirement in addition to paying the biennial renewal fee. During each two-year compliance period, a licensee must complete 80 CPE credits, with at least 20 credits completed during each of the two years. The credits may be earned through both formal and informal learning activities, with not less than 40 credits earned through formal activities. At least three of the credits earned through formal learning activities must be on the subject of ethics.

Analyzing the CPE requirements of the AICPA, WICPA and surrounding states Both the WICPA and AICPA have CPE requirements that their members must adhere to. In the process of creating the Wisconsin licensure CPE requirement, the specifics of those requirements as well as the requirements in four surrounding states were analyzed. While specifics differ, the WICPA, AICPA and the four surrounding states (Illinois, Iowa, Michigan and Minnesota) require an average of 40 credits per year. Both the AICPA and Iowa require that the continuing education be obtained through formal programs, while the others allow for a portion of the requirement to be satisfied through informal learning activities — although the specifics of what qualifies as an informal activity differ. While the AICPA requirements state that “no specific subject areas are required,” the WICPA and all four surrounding states have some content-specific requirements. All four states have a specific requirement regarding the subject of ethics, and some specify requirements in other areas. • Illinois requires that at least four of the 120 credits required for every three-year renewal period cover the subject of professional ethics. • Iowa requires that at least four of the 120 credits required for every three-year renewal period must be devoted to ethics and rules of professional conduct. Iowa also requires that every applicant who is

During each two-year compliance period, a licensee must complete 80 CPE credits, with at least 20 credits completed during each of the two years. responsible for supervising compilation services, or who signs or authorizes someone to sign the compilation report, must have a minimum of eight hours devoted to financial statement presentation. • Michigan has a one-year renewal period and specifies that at least eight of the required 40 credits be in auditing and accounting, while two of the 40 hours must be in ethics. • Minnesota requires that at least eight of the 120 credits required over a three-year period be in the area of regulatory or behavioral ethics.

* Terminology used by the AEB and the WICPA differ. The WICPA prefers “continuing professional development (CPD)," while the AEB uses "continuing professional education (CPE)." Both terms refer to the same thing.

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{ Professional Development | License renewal requirements }

The states also have different policies regarding the ability to carry back or carry forward CPE credits. Iowa allows for the carry forward of up to 40 credits from one annual reporting period to the next but does not allow credits to be carried back to an earlier period to satisfy a deficiency. Minnesota, on the other hand, allows licensees to carry back credits to satisfy the requirement of a prior reporting period but does not allow any credits to be carried forward.

The Wisconsin CPE requirements The Accounting Examining Board’s (AEB’s) objective was to establish a set of requirements that provide flexibility to licensees in meeting the requirements and at the same time ensure that CPAs licensed in Wisconsin would keep abreast of important changes and issues facing the accounting profession as necessary to continue to provide quality services to the public. When Wisconsin CPAs apply for renewal of their licenses in December 2021, they will have to certify under penalties of perjury that they have completed at least 80 CPE credits, meeting specified requirements, in the two-year period immediately preceding the date of application. At least 40 of the 80 credits must be from participation in formal learning activities, and three of the formal credits must be in the subject of ethics. At least 20 of the 80 credits must be completed each year. Fifty minutes of participation in a learning activity is equal to one CPE credit, and credits can be claimed in as little as five-minute increments. Credit for formal activities requires that the individual’s participation be objectively


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confirmed by a program sponsor. Acceptable formats for formal and informal learning activities include all the following: a) Attending lectures b) Participating in online webinars and webcasts c) Completing self-study courses developed by vendors d) Teaching a course e) Performing independent research f ) Listening to podcasts g) Watching videos h) Reading books and articles i) Attending meetings j) Engaging in learning activities similar to those listed in (a) through (i) that enhance the participant’s professional development It is incumbent upon individuals to document their participation in all learning activities, both formal and informal. Documentation of informal activities should include the following: a) The format of the activity b) The date or dates c) The subject matter d) The time spent and CPE credits claimed e) The materials prepared or used Documentation of each learning activity for which CPE credits are claimed must be kept for five years. While the

CPAs who currently maintain membership in the WICPA or AICPA and satisfy the CPE or CPD requirements of those organizations may already be satisfying the Wisconsin licensing requirements.

licensee must certify that they have completed the required CPE when applying for license renewal, no submission of the documentation is required. However, the AEB has the authority to request submission of documentation if issues arise regarding a licensee. More specifics regarding documentation can be found in Chapter Accy 2 of the Wisconsin Administrative Code (https://docs.legis.wisconsin. gov/code/admin_code/accy/2/VI/501).

Situations other than regular two-year renewal If the application for renewal of a license is made five years or more after the renewal date, the applicant must certify that they have completed at least 120 hours of specified CPE in the one-year period immediately preceding the date of application. For example, if an individual does not renew their license by the Dec. 15, 2021, renewal date, they can file an application for renewal at a subsequent date and certify on the application that they have complied with the 80-credit hour CPE requirement. However, if the date of application is after Dec. 15, 2026 — the date five years after the original renewal date — the applicant must certify that they have completed 120 CPE credits in the preceding year. For CPAs initially licensed during the first year of a twoyear compliance period, the CPE requirements are reduced by half, and the CPE requirements do not apply for CPAs initially licensed during the second year of the compliance period.

Carry back and carry forward of credits A Wisconsin licensee may carry back CPE credits earned during the first 12 months of a compliance period to the immediately preceding period to the extent necessary to satisfy the CPE requirements of the earlier period. If carried back, the credits cannot be used to satisfy the current compliance period requirements.

A licensee may carry forward from one compliance period to the next consecutive compliance period a maximum of 40 CPE credits that exceed the requirements for the current period. These credits can be from formal or informal learning activities and can include a maximum of three ethics credits. If a Wisconsin license holder also holds a current unrevoked license issued by another state and is in compliance with that state’s continuing professional education or continuing professional development licensing requirements, they will be deemed in compliance with the Wisconsin requirements.

Inactive certificate holder The term “inactive certificate holder” refers to an individual who holds an unrevoked CPA certificate but does not hold a current license to practice as a CPA. An inactive certificate holder cannot practice as a CPA and cannot use the title or designation of “certified public accountant” without including the word “inactive.”

Conclusion CPAs who currently maintain membership in the WICPA or AICPA and satisfy the CPE or CPD requirements of those organizations may already be satisfying the Wisconsin licensing requirements. For others, the CPE requirements represent a significant change in what one must do to renew their license. The other significant change is the requirement that certificate holders who do not have a current license are not allowed to use the CPA designation without also including the word “inactive.” David Schlichting, CPA, PhD, is a visiting professor of accounting in the Marquette University College of Business Administration and a member of the Wisconsin Accounting Examining Board. Contact him at

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{ Technology | Vision for 2020 }



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January | February 2020


With the end of life of many mainstream products in 2020, such as Windows 7, Office 2010 and Adobe DC, it is clear that you should have completed your upgrades and made a plan to stay current in the future.


e want to be effective and efficient in the use of technology for our firms as well as our clients and customers. So what will impact our use of technology in 2020, and what do we have to do to protect our data and information?

By Randy Johnston

Be strategic

What do you want to accomplish with your technologies? With the end of life of many mainstream products in 2020, such as Windows 7, Office 2010 and Adobe DC, it is clear that you should have completed your upgrades and made a plan to stay current in the future. Vendors are encouraging us to make these decisions by offering subscription models that have attractive features. For example, Microsoft has Office 365 in a variety of versions that provide all of the traditional Microsoft Office products such as Word, Excel and Outlook, and also provide cloud functionality with OneDrive, Teams, Planner and a number of other useful modules.

Consider new generation and risk mitigation tools Many traditional applications are being replaced with new generation applications. This is true with audit and tax products; and it is true with accounting, document management, workflow and portal software, too. While we may have been using legacy products for three, five or ten years, the tools that vendors used to build the products are being phased out, and new development tools are being used to build modern products. It is safe to say that

On Balance

January | February 2020


{ Technology | Vision for 2020 }

virtually every technology tool you use today will be replaced by a new generation tool within five years. Remote access and cloud technologies are changing the culture and capabilities of most businesses. Having information accessible from more places is increasing risk while also promoting ease of use and improving customer service levels. So how do we mitigate the risk? Practice safe computing by using multifactor authentication (MFA) with products like Cisco DUO and ensure that IT teams or contractors are maintaining your firewalls, antivirus software and backups daily. All situations that allow remote access should require MFA as the minimum best practice. Also, 2020 will be the first time that password-less computing becomes popular, as Microsoft and others bring methods to market that allow a secure login using biometrics, facial recognition or tokens.

Be aware of emerging technologies and communication advances Evaluate the opportunity to use emerging technologies in your business. Emerging technologies that are beginning to work acceptably include robotic process automation (RPA), machine learning (ML), and artificial intelligence (AI), as well as other advanced technologies such as blockchain, 5G communications and augmented reality. You should review the 20+ emerging technologies available to discern which of these new technologies could fit your operation and where you should invest to prototype, test and prove that an emerging technology can provide a competitive advantage. Be aware that 2020 will bring several advances in communication technologies in addition to 5G. Low Earth orbit (LEO) satellites will make responsive internet communications available any place there is land. Satellites currently being launched by OneWeb and SpaceX will cover the entire planet and make it possible to get internet access everywhere. Once we get connections to 5G or LEO, which are both very high speed with low latency, we can spread the connection in our offices and homes using the newly approved WIFI6 with Wi-Fi Protected Access 3 (WPA3) encryption capability. WPA3 should make wireless secure and safe to use for private communications for the first time since it was made available. Additional communication technologies that will become more widespread in 2020 and beyond include HDMI 2.1 and USB4 for both video and data communication needs. While all of the communication technologies named will be available


On Balance

January | February 2020

in 2020, it is likely that widespread adoption won’t occur for several more years. But each can be considered, tested and included as part of your longer-term plan.

Take a problem-solving approach While any or each of the technologies mentioned earlier could change your operations and require notable learning, all are technologies looking for a problem to solve instead of the more important view of customer-facing issues that need to be resolved. What are your top three business issues in 2020? How are they different than they were in 2015? Can you make changes to eliminate these issues by 2025? Examples of issues might include the following: 1) secure collaboration on documents, 2) scheduling and controlling projects, 3) developing business opportunities, responding with professional proposals and closing new business, 4) managing supply chains for receipt of raw materials, managing costs and scheduling delivery of finished products, 5) locating, vetting and on-boarding qualified personnel and many more. Each of these business problems has new technology solutions that have become available in the last two years. How are you staying aware of potential new solutions in your market, niche or specialty? For example, to do secure collaboration on documents, you have at least three choices, with co-authoring options in Office 365, G-Suite or Zoho Docs. You can place a Word document or Excel spreadsheet on a Microsoft Teams site and have many people edit the document directly with Word or Excel or their online counterparts. The responses are very quick, and the changes made by other authors are obvious in real time and in audit trails. Co-authoring eliminates version control issues, speeds up editing and provides real-time backup all at the same time. If you are sending documents as email attachments, that is so last decade! If you are managing business development, professional tools like Practice Ignition or HubSpot can assist on your workflow, standardization and follow-up on opportunities. Complete systems like ZohoOne can provide tools from Orchestly to Zia to Campaigns to Analytics to Flow to CRM to manage all aspects of communication and proposal building in a single location.

Step one: Identify the problem Note, then, that your business issues should be identified, documented through process mapping, and refined for both manual and automated support. If an automated solution is desired, the process maps will provide guidance to the software supplier by documenting your needs. You can perform a gap analysis to discover the differences between your needs and what the product does. Then you can make an informed decision about the relative fit of the product and whether it is worth the effort to implement and personalize or customize the product. The ability to implement appropriate business workflows and personalization in systems has become much easier, as evidenced by Acumatica, Open Systems, Zoho and other accounting software systems. The opportunities of 2020 and beyond depend on your needs, your vision and your commitment to execute. While implementing new systems is not easy, you can effectively manage the risk and transform your business or those of your clients with the new technology tools of this decade.

While implementing new systems is not easy, you can effectively manage the risk and transform your business or those of your clients with the new technology tools of this decade.

Randy Johnston, executive vice president of K2 Enterprises, is a frequent presenter at WICPA technology conferences and a frequent contributor to WICPA publications. Contact him at 620-664-6000, ext. 112; 985-542-9390, ext. 18; or

memorials Gerald R. (Jerry) Hansen, CPA (1928 – 2019)

Gerald ( Jerry) Hansen, CPA, died Aug. 1 at the age of 91. Hansen grew up in Manitowoc and graduated from Lincoln High School. He later served in the Korean War as a member of the U.S. Army. After returning from Korea, he earned his bachelor's degree in accounting from UW–Madison in 1955. He was an active member of the WICPA and a former partner with Hawkins Ash CPAs, from which he retired in 1990. During retirement, he and his wife, Delores, spent winters at their home in Naples, Florida, and the summers in Door County. Hansen is survived by five children, nine grandchildren and two great-grandchildren.

Robert A. Stephan, CPA (1932 – 2019)

Robert (Bob) Stephan, CPA, passed away Nov. 3 at his home in Louisville, Colorado. Stephan graduated from UW–Madison in 1952 with Phi Beta Kappa honors and a bachelor’s degree in accounting and finance. Later, he earned an MBA in finance from UW–Madison. Stephan enrolled in the U.S. Army after college graduation and served as an officer in post-World War II France during reconstruction efforts. After becoming certified, he went to work for Robert W. Baird Co. in Milwaukee and eventually became a vice president, partner and director with the firm. In 1970, he was elected to the board of governors of the Midwest Stock Exchange. He is survived by his wife, Kathy; two children and five 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

On Balance

January | February 2020


{ Accounting & Auditing | Understanding GASB }


How far back should one go? While a GASB update for some may mean needing to go back just a year, for others it may mean needing to go all the way back to the beginning.


On Balance

January | February 2020


he beginning for the Governmental Accounting Standards Board (GASB) was 1984. GASB’s seven-member board issues pronouncements that constitute Generally Accepted Accounting Principles (GAAP) By Paul H. Koehler, for state and local government general-purpose external financial CPA reports in the United States. In an effort to improve understanding and communication and ultimately better serve the public interest, this article will start at the beginning, highlight some common GAAP misstatements and enable one to better appreciate more current GAAP issues.

What do the letters mean? Here’s what GASB means to me. • “G” stands for Governmental; it means “pertaining to state and local governments, both general purpose and special purpose, in the U.S.” (not the federal government). • “A” stands for Accounting; it means “reporting.” Look at any recently issued GASB statement, and you will see an applicability box that refers to “reports,” and the effective date of a statement refers to “reporting periods.” • “S” stands for Standards; it means “principles,” the same as the “P” in GAAP. Please notice that this last letter is not a “G” for “guidance”; it appears in neither the acronym nor in GASB 76. I believe it is in the public interest, and thus in one’s interest, to cease using the recently ubiquitous term “guidance” when referring to authoritative GAAP. Principles are requirements, as that term is used in GASB statements, and financial statement readers have a reasonable expectation they be followed if material. (Remember the “materiality box” that appears in GASB statements.) • “B,” of course, stands for and means the sevenmember board.

So, should GASB change its name to GRPB? Probably not. Well-established names and acronyms normally don’t change and probably shouldn’t. For example, the Big 10 Conference includes Wisconsin and Nebraska and 12 other teams — it’s not going to change to the Big 14. Also, a batter in the recent World Series hit a ball that struck halfway up the right-field foul pole and was ruled a home run — the “foul” pole is considered to be in fair territory, so it’s really a “fair” pole. It is most important to know what something really means.

A GAAP reminder GAAP principles are generally considered to address the four aspects of financial reporting as follows: • Recognition – The timing of transaction recognition (for example, cash basis vs. accrual or modified accrual basis) • Measurement – At what value is a transaction reported? • Presentation – How do transactions — and the statements overall — appear? • Disclosure – What’s included in the footnotes as well as on the faces of the statements themselves? Material misstatements can occur in any of these four areas. It is widely accepted in the audit profession that a single material misstatement left uncorrected in a set of audited financial statements would preclude an unmodified opinion by the auditor. A careful reading of recent GASB pronouncements will enable a financial statement preparer or auditor to ascertain which aspect of GAAP is being impacted by a particular pronouncement provision.

What if a government doesn’t follow GAAP? Believe it or not, only about one-third of the roughly 90,000 governments in the U.S. follow full GAAP (or really “GARP”). Many use the cash basis of accounting; however, that doesn’t mean the other GAAP principles don’t or can’t apply. Cash-basis statements report only cash receipts, disbursements and beginning and end-ofperiod cash balances, ignoring transaction occurrence. (One of my longtime cash-basis local government clients has consistently reported in their footnotes: “The Village’s financial statements are presented in accordance with

On Balance

January | February 2020


{ Accounting & Auditing | Understanding GASB }

generally accepted accounting principles (GAAP), using the cash basis of accounting.”)

Common GAAP misstatements observed Review of recent state and local government financial statements have brought to my attention departures from notso-recently effective GASB statements for which an update would prove helpful. Some of these GAAP departures are listed below (even if immaterial, it makes no sense to me for a preparer to report something blatantly non-GAAP): • Reporting Entity footnotes sometimes still refer to an “oversight entity” or “oversight authority,” which was superseded by GASB 14 almost 30 years ago. • Basis of Accounting footnotes often still refer to accrual-basis revenues being “earned.” The majority of revenues in many governments result from nonexchange transactions like property taxes or sales taxes. GASB 33 as amended, effective about 20 years ago, addresses nonexchange transactions but never used the word “earned.” Earnings apply to exchanges. • Special Items, as defined by GASB 34, paragraph 56, effective about 20 years ago, are apparently occurring but not being properly reported as such. (I once saw a special-purpose local government report a $126 million receipt of a donated capital asset in their otherwise fivedigit operating statement as “Miscellaneous Revenue” — the auditor’s opinion was nonetheless unmodified. Yes, the statement was prepared by the auditor.) • Donated Capital Assets (not “fixed” assets — See GASB 34) received by governments are still often disclosed as being reported at fair value. This GAAP requirement was changed to “acquisition value” as defined by GASB 72, paragraph 79, effective for reporting periods beginning after June 15, 2015.

Selected more recent GASB statement requirements The following are some of the provisions of more recently effective GASB statements with relatively broad applicability: • GASB Statement 84, Fiduciary Activities, effective for reporting periods beginning after Dec. 15, 2018, establishes criteria for identifying fiduciary activities. Provisions include replacing agency funds with custodial funds and having a Statement of Changes in Fiduciary Net Position report changes for all fiduciary fund types, including custodial (unlike previous statements, which excluded agency funds).


On Balance

January | February 2020

• GASB Statement 87, Leases, effective for reporting periods beginning after Dec. 15, 2019, establishes a single model for leases based on the principle that leases are financings of the right to use an underlying asset. Lessees will report a lease liability and an intangible right-to-use lease asset, and lessors will report a lease receivable and a deferred inflow of resources, except for short-term leases. The “lease term” is newly defined and involves evaluating whether various options are reasonably certain of being exercised or not. “Reasonably certain” is a new term, which the GASB board, according to paragraph B22 of the pronouncement, believes has a higher threshold of likelihood than the historic term “probable.” • GASB Statement 88, Certain Disclosure Related to Debt, effective for reporting periods beginning after June 15, 2018, imposes disclosure requirements for direct borrowings and direct placements of debt. It also establishes a specific definition of the term “debt” to be used for the purpose of these disclosures (for example, “debt” does not include leases).

Where are we now? As of the writing of this article, the last GASB statement issued was in May 2019 — GASB Statement 91, Conduit Debt Obligations, effective for reporting periods beginning after Dec. 15, 2020. The GASB has also issued three Implementation Guides (remember, they’re “level B” authoritative GAAP) in 2019. There’s always something new on which to be updated to the extent applicable. One’s need for a GASB update, and how far back to go, is very challenging for one to self-determine. Many GASB pronouncements were issued well before some practitioners were even born, let alone working as financial statement preparers or auditors. In view of the fact that “you don’t know what you don’t know,” one would be wise to act in the public interest by obtaining an outside expert’s evaluation of one’s needs. Ultimately, to maintain your professional competency, you are that one.

Paul H. Koehler, CPA, is a sole practitioner in Lincoln, Nebraska. He has over 43 years’ experience auditing, training and consulting, specializing in nonprofit organizations and state and local governments. Contact him at 402-488-1578.

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{ Human Resources | Talent recruitment and retention }


R By Robert Reck


On Balance

etaining employees is a challenge. Executive recruiters are calling your employees right now — while you are reading this article.

Even if they don’t have a message from an executive recruiter that is awaiting reply, they may have met with one in the past who now understands the type of job they would jump at in a heartbeat. Before diving into how to prevent losing employees to other companies, the first order of business is discussing table stakes. Compensation and benefits are incredibly important, and if companies are not aligned with the market, the information in this article likely won’t provide the desired results.

January | February 2020

Work-life balance is another table stake. Accountants are painfully aware that busy season, budget time and software implementations require additional hours, and they have signed up for those extra hours. However, working long hours consistently over an extended period will burn out even the best accountant and, again, will circumvent the message about to be conveyed. In addition to treating employees better (which is common sense), research has shed light on three other factors that may be impacting retention rates. They are: 1. Persistence: Determine which current and future employees are persistent.

2. Mindset: Help current employees develop a growth mindset. 3. Motivation: Become better motivators. So let’s jump right in.

Persistence In Angela Duckworth’s book “Grit,” she discusses how she was tasked with predicting which cadets would wash out of the U.S. Military Academy at West Point. Cadets who are able to gain entrance into this highly selective training ground for the Army were considered the best of the best, but dropouts were still commonplace. The military tried to crack this code for decades before they found Duckworth. She succeeded by creating a behavioral score to predict which cadets had grit, which she defined as the combination of passion and perseverance. She ranked the grit of the incoming cadets by measuring how often they went above and beyond what was expected of them and how often they stuck to those commitments. For

instance, playing a sport would earn a cadet a point for going above and beyond. The cadets could then earn another point if they became a team captain in a subsequent year. Duckworth generalized this structure so that it could be applied beyond West Point, and adopting it has the potential to help improve employee retention. Those who are interested in learning more about the grit scale but lack the desire to read her book can access a summary of it at When applied to employee retention, Duckworth’s framework asks the following questions: 1. Can grit be measured during the interview process? 2. Can grit scores be used when deciding whom to assign to a high-stress project? 3. Can grit scores be used to determine who receives raises and promotions?

Mindset Duckworth also touches on the growth mindset in “Grit” but borrows this idea from Carol Dweck. In Dweck’s book,

On Balance

January | February 2020


{ Human Resources | Talent recruitment and retention }

aptly named “Mindset: The New Psychology of Success,” she explains that individuals who have a fixed mindset see themselves in a certain way, and experiences that don’t align with that vision threaten their sense of identity. On the other hand, individuals who have a growth mindset see themselves as a continual work in progress, and experiences that don’t align with their current vision of themselves present an opportunity to adjust either their vision or their actions. Some setbacks are unavoidable, but according to Dweck, an individual with a growth mindset can take a setback that might derail an individual who has a fixed mindset and use that same setback to propel them to a new (and improved) level of performance. To move toward a growth mindset, do the following: 1. Constantly seek feedback. 2. React professionally to the feedback. 3. Provide feedback immediately. First of all, seeking feedback from employees empowers them — if it is taken seriously. If we seek feedback and then choose to ignore it, the potential exists for this strategy to backfire. Second, reacting professionally to any feedback that is received is imperative, regardless of whether the feedback is accurate. The tone used when communicating disagreement with feedback will certainly impact how employees respond next, so tread lightly when this situation presents itself. Last on the topic of growth mindset, if an employee doesn’t live up to expectations on an assignment, let them know immediately. How can an employee be expected to make an adjustment if they are unaware an adjustment is needed?

Motivation Retaining employees is more than just treating them well, helping them become more resilient and seeking their feedback. Another major influence on employee satisfaction is related to how they are managed on a daily basis. Tali Sharot’s TEDx speech “How to Motivate Yourself to Change Your Behavior” may be able to provide guidance. The following list contains items that seem logical, but they may


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January | February 2020

still be elusive within some (either created or tolerated) workplace cultures. Sharot focuses on these three things: 1. Positive recognition should be given socially. 2. Rewards should be immediate. 3. Progress should be highlighted. First — as a polar opposite to providing areas for improvement in private — recognition for a job well done should be given socially. Second, rewards and recognition should be handed out on the spot, as opposed to saving them for archaic annual performance reviews. And last on the topic of motivation, highlighting progress helps employees take small wins and build momentum so they can achieve larger wins later. As an example of highlighting progress, measurement and posting of the daily results of a metric that is tied directly to companywide success could stoke the competition between employees or teams and lead to improved results.

The bottom line Retaining employees may not be complex, but it certainly is not easy. Implementing the strategies outlined in this article may give employees another reason to refer executive recruiters to others instead of exploring other career opportunities themselves. As far as the bottom line is concerned, ask these questions: 1. What is the opportunity cost each time there is a vacant position? 2. How many employees burn out and leave when they have to cover a vacancy? 3. How much efficiency is lost while a new employee is not yet up to speed? The answers to these questions will make clear the importance of the strategies given here in keeping your staff from the temptation of returning that executive recruiter’s call. Robert Reck is the founder and president of Kilbourn Marshall, an executive search firm in Milwaukee that operates on the belief that poaching employees from clients is a violation of trust. Contact him at 414-676-2195 or





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On Balance Magazine - Jan/Feb 2020  

On Balance Magazine - January/February 2020 (Vol. 16, No. 1) On Balance is a publication of the Wisconsin Institute of CPAs. Find out more a...

On Balance Magazine - Jan/Feb 2020  

On Balance Magazine - January/February 2020 (Vol. 16, No. 1) On Balance is a publication of the Wisconsin Institute of CPAs. Find out more a...

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