Archives for March 2010

CPA Associates Adds New Member Firms

CPA Associates International, Inc. admitted four new member firms:

Trout, Ebersole & Groff, Lancaster, Pa., (16 partners, 80 total personnel);

Altieri, Gaona y Hooper, S.C., Puebla, Mexico (five partners, 70 total personnel);

FTW & Partners CPA Limited, Hong Kong (seven partners, 90 total personnel); and

Protasio Guerra y Asociados, S.C. of Tamaulipas, Mexico (two partners, 18 total personnel).

KPMG Names New Chairman / CE of U.S. Firm

New York-based KPMG LLP has named CEO, John Veihmeyer chairman and chief executive of the U.S. firm for a five-year term, beginning June 10.

Veihmeyer succeeds Timothy Flynn who will focus on his role as chairman of KPMG International. Flynn served as chairman of the U.S. firm since 2005, and chairman of KPMG International since 2007.

Henry Keizer was also elected as deputy chairman and COO, for a five-year term.

IGAF Worldwide and its Norway Member Firm Celebrate 2010 Olympic Games

IGAF Worldwide and its Norway member firm Svindal Leidland Myhrer & Co. will long have reason to celebrate the 2010 Olympic Games in Vancouver, British Columbia. Firm partner Bjorn Svindal watched jubilantly as his son, Aksel Lund Svindal, skied his way into the record books, with three medals for his home country. Aksel won silver in the men’s downhill and took gold in the men’s super-G, besting Americans Bode Miller and Andrew Weibrecht, and rounded out his trio of medals, taking bronze in the men’s giant slalom.

Svinda’s success in the 2010 Olympic Games is even more poignant because it is a majestic comeback following a crash in 2007 that threatened to remove him from the sport.

In addition to his Olympic medals, he has won five World Championship medals, four World Cup discipline titles and 13 World Cup races. Bjorn Svindal is his son’s biggest fan, and he attends most of his races. The NBC official Olympics Web site features an excellent biography of the skier and a video interview with his father, including footage that shows him watching his son ski to gold, at www.nbcolympics.com/news-features/news/newsid=259167.html.

CPA Sues Craigslist Over Online Smear Ads

A Queens, N.Y., CPA is suing Craigslist after two ads accused him of wrongdoing.

Accountant Leo Kehoe says it will take $4 million to even the balance sheet after he was anonymously smeared on Craigslist March 5, the New York Post reported. He is seeking $1 million in damages for each of the two counts against Craigslist and each of the two counts against whoever posted the ads, court documents say.

One ad on the site was headlined, “CPA FRAUD ALERT! (BEWARE OF CROOK),” and went on to say Kehoe “has been associated with TAX EVATION and falsifying records . . . Warn everyone you know.”

The posts have since been removed; in their place are glowing reviews. According to the article, Kehoe has been licensed as a CPA in New York since 1991 and state records show has had no disciplinary action against him.

Wanted Team Player: Leave Your Ego at Home

Top executives around the world agree egoism tops the list of reasons why team’s don’t work, according to the Study on Teams released by Egon Zehnder International, a global executive search firm. In fact, the study findings indicate that 71 percent of U.S. executives (59% overall) believe that egoism and hidden agendas on the part of individual team members are among the biggest obstacle to effective teamwork.

A total of 848 top executives from major corporations, small and medium-sized businesses in more 11 countries, including the U.S., Germany, UK, and India among others, were asked to examine the effectiveness of teams.

Not only do egos hinder a team’s performance, excessive focus on internal processes instead of on results was cited as the second biggest barrier to effective teamwork (43% in US). The third obstacle was poor definition of responsibilities (36% in US).

“Our findings confirm what many of us experience in different ways every day,” said Greig Schneider, co-leader of the Leadership Strategy Services practice, Egon Zehnder International. “Creating a high performance team is much more complicated than assembling a group of excellent individuals,” he added.

Additional highlights from the study include:

Corporate Rewards

Nearly two thirds (59%) of executives worldwide indicate that egoism/hidden agendas on the part of individual team members are the largest obstacle to effective teamwork. The number was the lowest in Norway (42%) and the highest in the U.S. (71%).

Almost half (41%) of respondents indicate that excessive focus on internal processes rather than on results is a key obstacle to achieving an effective team. This number was the highest in Italy (54%) and the lowest in the Netherlands (33%). In the U.S. 43 percent of respondents indicated this was an issue.

More than a third (34%) of all respondents indicate that a problem with decision making is a barrier to achieving a successful team. This number was the lowest in the U.S. (21%) and the highest in the Netherlands (58%).

Almost one third (29%) of executives worldwide said poor definition of the common goal was an obstacle to a successful team (34% in the U.S.) This number was the lowest in Switzerland (13%).

22% of overall respondents cite the inability of team members to handle conflict as a major obstacle to forming a team. The number was the highest in Australia (31%) and the lowest in Italy and Norway(10%).

Free Guide for CPAs – “How to Talk to Your Clients about Sales and Use Tax”

CPA firms are well-positioned to take the lead in helping guide their clients through the complicated, time-consuming, and resource-intensive world of sales tax compliance and management, according to a new, free guide authored by Geni Whitehouse, CPA.CITP.

“Sales tax is an increasingly important source of revenue for states experiencing massive revenue shortfalls, so now is the time for CPA firms to start talking to their clients about their increased audit exposure”

The just-published “How to Talk to Your Clients about Sales and Use Tax” asks CPAs to put themselves in their clients’ shoes to help them address the challenge of complying with sales tax rules in an environment of heightened audit risk.

Underwritten by SpeedTax, a Software-as-a-Service sales tax solution provider, the guide outlines 5 steps that firms should take to begin addressing their clients’ sales and use tax needs.

“CPA firms, now more than ever, have an opportunity to be proactive in helping their clients minimize audit risk, reduce overhead and streamline processes associated with state sales tax compliance,” said Gregory Rosser, CPA, and Executive Director of State & Local Tax at Grant Thornton. “Geni’s new guide helps firms walk through the steps of determining first the scope of services they will offer, and secondly how to promote them to current and potential clients. This is timely advice for firms that have decided to take action.”

“Sales tax is an increasingly important source of revenue for states experiencing massive revenue shortfalls, so now is the time for CPA firms to start talking to their clients about their increased audit exposure,” said Whitehouse. “Many sales tax-related tasks are too complicated and time-consuming for the average business owner – and yet they have no choice but to stay in compliance. I wrote this guide in hopes that more firms would start having meaningful discussions with their clients. Clear communication will ultimately help clients address their sales tax headaches, while helping firms deliver on their promise to be a ‘trusted advisor’.”

“How to Talk to Your Clients about Sales and Use Tax” is available now for download at: www.speedtax.com/sales-tax-resources.

Five Questions to Ask Clients Today

By Rick Telberg

Busy season may be hectic and the hours may be long, but if you’re not making time to get to know your clients better, then you’re missing an opportunity that may not come again for another year. By then, a competitor may have beaten you to the punch.

Many accountants, auditors and tax professionals don’t realize how much busy season is, in fact, “opportunity season.” You have your clients’ undivided attention. They should have yours.

Beyond the routine tax preparation and tax planning, beyond the reconciliations and check marking, you need to be using client face-time to explore their greater needs and goals and your firm’s performance and opportunities. You can access the entire article here.

What’s New for CPAs in Office 2010

Microsoft has updated one of the most important tools in the accountant’s tool kit, Microsoft Office. This article describes the features in the new versions of Excel, Word, Access, PowerPoint and Outlook that are likely to be most important to CPAs when Office 2010 is released in June.

Each module of Office 2010 has received updates to features and improved ease of use. Although many of the changes from Office 2007 are subtle, the theme is one of easier access to many common functions—with buttons consolidated into single menus and the number of steps necessary to accomplish certain tasks greatly reduced, improving productivity. If you don’t want to wait for the retail release to try out the new features, a fully functioning beta version of the software is available free from Microsoft at microsoft.com/office/2010.

You may read the entire article prepared by the Journal of Accountancy for the full details.

FASB, IASB Ready Comprehensive Income Requirements

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) reached some key agreements in Feburary to finalize a proposed new approach for explaining income information to investors.

The two boards reached some verbal agreements in their joint project on how companies would be required—or in some cases allowed—to present information in a “statement of comprehensive income,” a new financial statement that would replace the existing income statement.

The idea is to provide a more comprehensive view of an entity’s income, in part to scuttle the almighty reliance currently placed on the “net income” figure that becomes the bottom line on existing income statements. The new statement is aimed at giving a more balanced view of not only profit-and-loss figures but also other comprehensive income, which reflects gains and losses that have not yet been realized. That often includes things like gains or losses on securities or derivatives, pension costs, or foreign investments and currency hedges.

Platt’s Perspective: Monitoring Your Online Reputation: The Good, The Bad And The Ugly

Imagine your reaction if your marketing director walked into your office on a Monday morning with a desperately worried look, closed the door, and said, “Tom, we’ve got a problem. A BIG problem.”

A few clicks of the mouse and strokes on the keyboard and you’re looking at a Web site that has multiple messages about your firm for any ‘net surfer to see: “Smith & Company sucks, don’t work with those jerks!”

Now imagine that the Web site was set up with the express intent of capturing negative comments about your firm – which now presents a central repository for any disgruntled present or former employee(s) and/or client(s) to pour out their feelings.

Is it fair? No. Is it legal? Yes. Well, for the most part. Internet security and privacy laws are woefully behind current advancements in technology, so there’s really nothing to prohibit online corporate bashing.

For years, IPA has shared insights on using the Internet to market your firm and recruit staff. The number of ways that the Internet can work in your favor is unlimited, and firms are discovering new methods all the time.

But the very qualities that make it great also create a dark side: openness, anonymity and instant global reach. You not only need to be aware of the risks, but also need to be proactively monitoring and managing them to protect your online reputation. As communities for disgruntled people increasingly populate the Internet, more and more firms encounter the presence of sites designed to encourage online venting by current and former staff and clients for anyone to see.

The S&Co. example above, while not a real firm, represents a clear and present danger. It’s been happening for years to corporations with sites such as www.disney-sucks.com, www.walmart-blows.com, www.discover-cardstinks.org and much worse.

An example that hits a little closer to home was the development of the Web site www.EYsucks.com, which went live last summer and is no longer an active site – a story in itself. The site was dedicated to pointing out unethical practices at Ernst & Young (E&Y). Press releases were frequently sent to news organizations to investigate allegations that surfaced on the [www.EYsucks.com] Web site.

Last summer, while writing about “Defense Domain Names,” a blogger noted E&Y recently purchased 209 different domain names to help protect itself from other attacks, covering multiple variations that combine “EY” or “Ernstandyoung” with other words that could be potentially negative to the firm.

Monitoring your firm’s reputation online is not just limited to Web sites aimed at your firm directly. Blog posts, Facebook posts, Tweets, comments in online articles, company review sites – all are mediums that can invite permanent negative press.

Some sites are specifically designed for people to vent, such as www.jobvent.com. Consider this comment posted by a staff person in an accounting firm shortly after tax season ended last year.

“The firm in some regards is good, and in others is terrible. First, the managers and staff are good competent people. However, the two managing partners are absolutely dreadful. One is grumpy, and the other has an over-inflated sense of accomplishment. There is no direction, no communication, no leadership, only thankless long hours working on client audits or taxes that are an absolute mess – which typically is the result of a partner not doing the job properly, and of course partners don’t get laid off.”

There are legitimate Web sites that invite users to review companies – positively or negatively – think Angie’s List or Yelp.com. It is always helpful to check these sites just to see what your clients are saying about you. Encourage loyal clients to share their positive experiences.

Or consider this rant, from an (obviously) disgruntled staff member in a posting that will be on the Internet forever.

[ABC Firm] is the place to be, if you accept the following conditions: I will cheat on my significant other and brag about it. I will pass blame on to others and throw people under the bus. I will sexually harass co-workers as I know [ABC Firm] will not fire me for this, and many managers and partners will slap me high five. I will disrespect and degrade all people below me simply because I am not smart but need to act as if I am better than you. I will brown nose the “in-crowd” so that I never have to do any real work, and I will therefore move up without actually deserving it. If you are able and willing to meet these conditions, then you will fit in perfectly at [ABC Firm]. You will be welcomed with open arms and a bottle of booze.

This is a serious risk management issue that firms need to address.

The processes for managing your firm’s reputation is similar to the processes for protecting against identity theft: minimize the risk, monitor your credit, and if a breach occurs take the appropriate action to recover.