AICPA Insights

How Unlimited Vacation Works in My CPA Firm

2013-05-23T07:00:00-04:00

Before starting my own CPA firm, I worked at a large, national accounting firm and found I was never actually able to use up my three weeks of annual vacation time. However, when I went to work for a local boutique CPA firm, I only got ten annual vacation days. There was also no policy for telecommuting and no flexible schedules or incentives for being more efficient than expected, such as being rewarded with more paid time off. “Face time” in the office ruled. Initially, I was okay with limited vacation, but a couple of years in, I realized that I would really value more flexibility as part of my compensation package.

When I started my own CPA firm, I wanted to ensure we had a policy that was fair to the employees. I set out to implement a policy that would allow professional employees to work virtually and have unlimited paid vacation and sick days. Administrative staff has a similar, flexible work-schedule policy.

My firm is only three years old with just four people on payroll to date. However, we’re planning to continue the unlimited vacation and sick time policy even as we grow bigger. Of course, this puts greater pressure and emphasis on whom we hire and how we manage workflow.

How well is this policy working? Well, so far it’s going well and employees appreciate the increased faith and responsibility we entrust in them. As I write this blog post, we have one associate taking the whole month of May off to study for the CPA exam. We were able to re-route his client responsibilities to the rest of the team with one exception. He wanted to continue to manage one client matter while he was on vacation, which takes him about two hours a week to do. I expect this associate will want to take more time off later this year, and that will be okay with me. I also know how much he appreciates this opportunity. His dedication to the firm is going to make up for the longer vacation -- in efficiency and staying longer hours when a project necessitates it.

At my firm, employee engagement, attitude and innovative, out-of-the box thinking are very important. We hope that having the unlimited vacation policy as part of our compensation package will continue to attract -- and keep -- the right talent in our firm and will more than pay for itself.

Borbala Banto, CPA, Founder, Concierge CPAs, Inc. Originally from Europe, Borbala went to law school in Transylvania and continued her studies in the U.S., earning degrees in Paralegal Studies and in Accounting. Borbala worked as an international tax consultant at a Big Four accounting firm before founding Concierge CPAs.

7 Tips to Help Others Find Your Videos on YouTube

2013-05-22T09:31:56-04:00

There are tens of thousands of hours of video being uploaded into YouTube every day. Don’t let the hard work you put into producing a video for your firm or practice get lost in cyberspace. Implement a few basic optimizations to make it easier for users to find your videos as they browse and search.

1. Use keywords in your filename
Rename your video’s filename to match the topic of the video. For instance, if your video is about small business accounting, rename your video file from “video.mp4” to “small-business-accounting.mp4.”

2. Use a descriptive title
Give your video an eye-catching title that effectively describes its content. For example, if your video is about starting a career in accounting, a title such as “Careers in Accounting: A Practical Guide” would be appropriate. Also, try to keep the titles short. This will allow for the full title to appear in search results without being cut off.

3. Don’t forget the description
Like a summary on a press release or in a news story, your video description helps users understand why they should be interested in watching the video.

4. Tagging is key
Tags are one way that YouTube organizes videos so that they can be displayed more prominently in search results and shown as recommendations to users interested in a particular topic (also called “related videos”). Tags can be written as a single world, multiple words within quotes or as multiple words linked together.

5. Select categories
Categories are another way YouTube organizes content for its users, making it easier to browse videos from the home page.

6. Thumbnail images
A thumbnail is a still image that accompanies your video on YouTube and is shown in search results prior to it playing. YouTube automatically generates thumbnail images at the 25%, 50% and 75% duration points of the video. Select the one that you feel is the most visually appealing and likely to encourage click-throughs.

7. Captions & subtitles
Captions and subtitles provide viewers with a deeper understanding of the content of your video, improve accessibility for people who cannot follow along with the audio and increase discoverability of your videos in search engines.

There you have it. A little work on the front end when you are uploading your video to YouTube will go a long way! Curious about what’s happening on YouTube in the accounting space? Check out these YouTube channels: AICPA, Journal of Accountancy, This Way to CPA and Start Here Go Places.

AICPA Members: For more information about utilizing the power of YouTube, check out the YouTube User Guide in the CPA Marketing Toolkit.

Stacie Saunders, Strategist, Social Media and Member Engagement, American Institute of CPAs.

Wrap Up of AICPA Spring Governing Council Meeting 2013

2013-05-21T11:03:15-04:00

The 2013 AICPA Spring governing Council meeting kicked off on Sunday and just wrapped up. Take a look at the three-day meeting through the eyes of social media. (Email subscribers: View the full story on AICPA Insights.)

Virtual Work Teams Are Coming

2013-05-20T07:00:00-04:00

As the economy continues to recover, the impending retirement of our nation’s Baby Boomers will create a labor shortage far greater than any we have experienced in the U.S. Professionals with the right skills will have their choice of employment opportunities, which will drive demand – and salaries – up. CPA firms that provide truly motivational and engaging environments will win the recruiting and retention race.

That’s why learning to manage the challenges and possibilities of virtual work teams is a must for today’s current and emerging partners. The need for increased workplace flexibility generates passionate conversations by CPA firm leaders and team members. Employees are challenged to keep a steady balance between their work and their personal lives as demands in each continuously change. Some aren’t willing to make the firm their top priority.

As a business owner and working mother who owns and operates a 100 percent virtual and flexible entity, I am biased toward the virtual paradigm, but I am also aware of the crucial elements that facilitate its success, including:

Written expectations regarding availability and accessibility with frequent-and consistent-updates on expectations;
Multiple mechanisms for communication between team members, including video conference, messaging, texting, etc.;
Measurable, results-based performance goals with a focus on specific outcomes - not perceived effort; and
Regular performance reporting and expectations resetting - including willingness to engage in conversations when expectations are not being met.

To learn more about flexibility initiatives and virtual work teams, visit the AICPA PCPS Human Capital Center or attend my "Virtual Work Programs Win the Race!" breakout session at this year’s AICPA Practitioners Symposium and Tech+ Conference. Prepare your firm to compete for the profession’s top talent and begin to support virtual work teams today.

Jennifer Wilson, Partner and Co-Founder, ConvergenceCoaching, LLC.

Virtual team image via ShutterStock.

In the News: 4 Helpful Quotes from CPAs

2013-05-17T10:17:36-04:00

I read so many great quotes from CPAs every day and have such a limited space to summarize them on the blog– it can get to be a bit frustrating. As I began drafting my bi-weekly ‘In the News’ post, I decided to switch things up this week.

I present to you four helpful quotes from CPAs. Hey – everyone can use a little help now and then.

As Kelli Grant reports in MarketWatch, going to summer camp may be a rite of passage for children, but for parents, it seems more like an initiation into the woes of tuition payments.

What parents might not know is that camp expenses can translate into a tax break.

Sending a child age 12 or younger to a day camp is a qualified expense for the child and dependent care tax credit, says Melissa Labant, CPA, director of tax advocacy for the AICPA. Parents can claim up to $3,000 in unreimbursed expenses for one child per year ($6,000 for two or more children), for a maximum credit of $1,050 ($2,100 for two or more) depending on income. “The rules are pretty straightforward,” Labant says. “The only catch is that it cannot be an overnight camp.”

A recent article on Dimespring noted that roughly 1 in 4 married couples between the ages of 18 to 34 bought their first house together before getting married, according to a recent survey by Coldwell Banker Real Estate. But buying a house as an unmarried couple has some potential pitfalls, says Tracy Stewart, CPA and member of the AICPA’s National CPA Financial Literacy Commission.

“Before buying the house, have an honest talk about how the two of you will handle financial matters…Better yet, have more than one honest talk. Make it a habit to talk monthly about household expenses, repairs, maintenance and goals,” said Stewart.

Students go to college to get ahead, but many are falling behind in life’s next stages because of burgeoning school debt, according to a national telephone survey of student loan borrowers and their parents conducted for the American Institute of CPAs by Harris Interactive.

WFMY News 2 in Greensboro, NC spoke to Ernie Almonte, CPA, CGMA, chairman of the AICPA’s National CPA Financial Literacy Committee and Clare Levison, CPA, member of the Commission about steps students can take to manage their loan debt and additional strategies students and their parents can consider when it comes to paying for college.

Levison advises recent graduates who are already in debt, not to “dig the debt hole any deeper by incurring credit card debt or other debt.” Instead, graduates should “cut their spending, so they can pay as much on their student loans as they can, as quickly as they can.”

Almonte advised families with children to begin thinking about the cost of college as early as possible.

"If parents, when they're having children, starting saving from birth and moving forward, you can open up a 529 account and you can get tax-free earnings from that," he said.

Share the most helpful quotes you’ve read from CPAs in the news lately in the comments section below.

James Schiavone, AICPA Staff.

5 Things CPAs Need to Know about Integrated Reporting

2013-05-16T07:00:00-04:00

Last week, my blog post discussed that Integrated Reporting <IR> represents an important shift in corporate reporting in which CPAs can play a key role providing consulting services, implementation or report preparation. In today’s blog, I’m drilling down into some of the key concepts of the recently released Consultation Draft of the International <IR> Framework that are important for CPAs to understand.

Five features of the Draft Framework are:

Integrated thinking: While much of the Draft Framework focuses on the preparation of an integrated report, at the heart of Integrated Reporting is the application of integrated thinking. Initially, the process of preparing the integrated report is like the tail wagging the dog. It is used to break down the traditional silos within an organization and get people focused on the relationships between their units and the various capitals that the organization uses or affects.
Capitals: Rather than the traditional focus on financial capital and capitalized assets, the Draft Framework identifies six types of capital — financial, manufactured, intellectual, human, social and relationship, and natural — and views these forms of capital as stores of value that may be increased, decreased or transformed by the organization’s activities. An organization describes its use of and effects on the capitals in an integrated report rather than measurements of value; it is up to the report users to assess the ability of the organization to create value over time from such information.
Connectivity: Often information is communicated without sufficient context to understand its relationship to an organization’s performance or prospects. The Guiding Principle of “Connectivity of information” is intended to drive organizations to make those connections in external reporting as well as in their day-to-day operations. In an integrated report, an organization should explain the inter-relationships and dependencies between those components that are material to their ability to create value over time, the connection between the time dimensions of past-to-present and present-to-future and the connections between quantitative and qualitative information.
Resiliency: Organizations with longevity are often built around a resilient business model with a strong governance structure that embraces the full range of processes, procedures, strategies and priorities that are responsible for their success. Do providers of financial capital currently understand the organization’s governance, strategy and business model and the extent to which they are linked? An integrated report is intended to more effectively communicate these aspects and the connectivity between them, which in turn is intended to support better decision-making by providers of financial capital, who are the primary intended audience of an integrated report.
Comparability: An integrated report contains six areas of focus—or Content Elements—to help business communicate key information. The Content Elements include: Organizational overview and external environment; Governance; Opportunities and risks; Strategy and resource allocation; Business model; Performance; and Future outlook and are framed in the form of questions in the Draft Framework. However, the Draft Framework does not specify any particular set of indicators that are to be included in responding to the questions. The result is that content will be included for matters determined to be material by each particular organization rather than inclusion of a standard list of information. This reporting format will require a new mindset for evaluating comparability between organizations and over time; however, it should allow for improved comparisons, particularly with other organizations, by focusing on such dimensions as the organizations’ business models, their strategic focus, governance, which capitals they use and affect, and how such relevant context connects not only to financial performance but performance with respect to the other capitals and prospects for the future.

Are you interested in learning more? The AICPA is hosting a video webcast, Integrated Reporting: The Next Step in Corporate Reporting, to be held 2 to 4 p.m. ET on May 20, which will explain the key concepts of the Integrated Reporting Consultation Draft and what it means for organizations. Learn more about Integrated Reporting . The AICPA encourages you to comment on the Draft Framework, which you can do through the IIRC website.

Beth A. Schneider, CPA, Audit Director - Audit & Assurance Services, Deloitte & Touche LLP. Beth is on secondment to the IIRC as a Technical Director participating in the development of the International <IR> Framework. She also is chair of the AICPA Sustainability Task Force under the Auditing Standards Board and a member of the AICPA Assurance Services Executive Committee.

Tax Reform: The Crystal Ball Never Lies

2013-05-15T11:22:33-04:00

People often ask me, “Ed, when do you think we’ll finally see tax reform?”

“Not before 2014,” I respond with assurance.
“How can you be so sure, Ed?” they say.
“My crystal ball never lies!

But I started getting a bit nervous about sounding so confident. After a little digging, I found out my crystal ball had once predicted that the Titanic was unsinkable, yet it went down on April 15, 1912. How’s that for foreshadowing?! That forced me to do some soul searching and thinking.

Flash back to November 2011. I was sitting next to Pat Thompson, who chaired the AICPA Tax Executive Committee. We were listening to Don Longano, former House Ways and Means Committee Chief Counsel and Washington tax insider, share his views on the prospects for tax legislation at the National Tax Conference.

“Did you hear what I heard?” asked Pat. I thought I heard him say “fundamental tax reform” but was afraid to say it. Could have been “monumental tact is the norm,” but being a Washington insider myself, I knew that could never be.

Pat didn't hesitate. “He said fundamental tax reform, and I want to get ahead of it. Let's form a task force and Don should be the chair!” Pat and I cornered Don before he left the room and got our chair that day. (Truth be told, Don was an easy mark; I think he set us up.)

Don, Melissa Labant, the tax advocacy director, and the Tax Reform task force spent the remainder of that year and all of 2012 going on a Washington tax reform “listening tour.” 2012 was a presidential election year so we knew the prospects for any tax legislation, let alone fundamental reform, were slim. That knowledge allowed us the luxury to meet with congressional staff and understand what interested them and to leverage our tax policy thought leadership by focusing on administrability - a core concept of good tax policy.

So that brings us to last fall’s election, the lame duck session of Congress, debt ceiling (the congressionally mandated limit to which the Treasury Department may borrow money to fund the government), the fiscal cliff, going over the cliff for two days - to Jan. 2, 2013, and sequestration. Why was my answer “Not before 2014” when we have all of 2013 to deal with tax reform?

The answer is because a lot is left for the Hill to tackle. This spring brought House Ways and Means and Senate Finance Committees’ working groups, discussion drafts and hearings and we anticipate that those efforts will continue into the late summer or early fall. The debt ceiling will come up again – probably by late September – and the fight to connect a possible increase in the debt limit to fundamental reform has already started.

The Republicans want to tie that increase to a tax reform deal and the Democrats don’t. The Republican-controlled House could possibly move a tax reform bill to the Democratically-controlled Senate in late fall. Will that be a bill that will be easy to move in the Senate? No. Is this starting to sound familiar?

Is 2014 (if at all) starting to make sense? Stay tuned, there’s more . . .

Edward S. Karl, CPA, Vice President of Taxation, American Institute of CPAs.

Crystal ball image via ShutterStock

SEC Using XBRL to Flag Reports for Review

2013-05-14T08:42:17-04:00

Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

Not too long ago, I heard Craig M. Lewis, Director and Chief Economist of the Securities and Exchange Commission’s Division of Risk, Strategy and Financial Innovation, give a presentation on the SEC’s new predictive accounting quality model, nicknamed “RoboCop” by the trade press, which will enable the SEC to monitor and flag reports for further review.

What makes AQM so useful, Mr. Lewis said in an interview with Merrill Compliance Solutions, is that, by using XBRL, the tool can be “applied broadly to the entire filer space.” Previous versions of the tool used Compustat data, which did not include all filing companies. With XBRL, 100 percent of filing companies will be analyzed by AQM.

I think what’s really important to note is that, with AQM, the quality and consistency of XBRL tagging can make the difference between a smooth filing year or a company undergoing extra scrutiny by the SEC’s Department of Enforcement. “Now that there is an actual liability associated with inaccurate XBRL statements, I fully expect quality to improve,” Mr. Lewis said.

At the end of the day, individual companies are responsible for their tagged financial statements--whether or not they outsource the process. Many of these errors can be avoided simply by understanding the SEC's requirements and the U.S. GAAP Taxonomy. The AICPA is working with XBRL U.S. to help overcome this learning curve and take the guesswork out of XBRL creation with the new XBRL U.S. GAAP Certificate program.

How has your organization prepared your finance staff for these changes? I would love to read your comments below.

Arleen Thomas, CPA, CGMA, Senior Vice President - Management Accounting, American Institute of CPAs.

Student Debt Delays Spending, Saving and Marriage [INFOGRAPHIC]

2013-05-13T07:00:00-04:00

According to a new survey conducted for the AICPA by Harris Interactive, only 39% fully understood the burden student loan debt would place on the future and 60% have at least some regret over the choice of education financing. Furthermore, 75% have made a personal or financial sacrifice--such as delaying a home purchase and postponing marriage and children--because of monthly student loan payments. The press release includes tips for parents and students on both saving for college and managing loan payments. The below 360 Degrees of Financial Literacy infographic, Realities & Regrets of Student Debt, highlights the findings.

Download and share this infographic.

Evolution of Corporate Reporting: Integrated Reporting

2013-05-10T07:00:00-04:00

Corporate reporting in the U.S. and around the world has often developed as disparate strands of reporting. Stakeholders have grown to seek more and more information in a number of different reporting vehicles, but do they really seek the details or are they trying to drive better corporate practice?

Integrated Reporting <IR> represents an evolution of corporate reporting that focuses attention on how an organization creates value in the short, medium and long term. An integrated report, a key output of Integrated Reporting, is a concise report primarily intended for investors of financial capital, although other stakeholders who have an interest in the organization’s ability to create value will also benefit from such communications.

Often, the intangibles that are not reflected in an organization’s financial statements are what play a key role in future prospects. Integrated Reporting is intended to better meet the needs of 21st century business and investment communities, by reflecting not only past performance but also information about future prospects, and by taking a more concise and connected approach to communicating such information. Integrated Reporting also focuses the organization on how it can improve its performance by breaking down traditional, internal silos.

Interest in Integrated Reporting appears to be building as strongly in the accounting profession as it is in the business community. CPAs in industry can play a key role in introducing Integrated Reporting to their organizations not only in preparing integrated reports to help providers of financial capital (e.g., investors and lenders) and other stakeholders (including employees, customers, suppliers and others) gain a clearer understanding of the business, but also in improving the organization’s performance. CPAs in public accounting may see an opportunity for providing consulting services with respect to Integrated Reporting implementation and report preparation.

The International Integrated Reporting Council recently released a proposal, the Consultation Draft of the International <IR>Framework, which lays out the core concepts of Integrated Reporting and the Guiding Principles and Content Elements for preparation of an integrated report. Comments are due to the IIRC by July 15.

Please join the AICPA for a webcast, Integrated Reporting: The Next Step in Corporate Reporting, to be held 2 to 4 p.m. ET on May 20, which will explain the Integrated Reporting <IR> Consultation Draft and what it means for organizations. Learn more about Integrated Reporting.