“Now, more than ever, the accounting profession needs to reimagine. That means looking beyond chaos to find opportunity in a new and better normal.” — AICPA Spring Council 2020 “Reimagine” video. These extraordinary times are only matched by ...
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How to break the mold and go beyond tax and more...




How to break the mold and go beyond tax

IStock_73233617_XXXLARGE“Now, more than ever, the accounting profession needs to reimagine. That means looking beyond chaos to find opportunity in a new and better normal.” — AICPA Spring Council 2020 “Reimagine” video.

These extraordinary times are only matched by the extraordinary work CPAs in tax are doing. More than ever, CPAs provide services that they wouldn’t have envisioned even a few months ago.  

As CPAs working in tax, you aren’t just maintaining the status quo. You’re the go-to advisers for your clients and are expected to:

  • Have all-encompassing knowledge on new tax laws, the latest tax developments and legislation.
  • Help navigate economic relief measures that the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted, including dealing with payroll, employee benefits, employee staffing, business loans, disaster recovery and bankruptcy laws.
  • Focus on tax planning strategies related to business losses, tax credits, tax benefit comparisons, state and local taxes and other tax opportunities.

Clients are also asking you to provide non-conventional services such as:

  • Assisting with loan applications
  • Advising on retirement plan distributions and loans
  • Evaluating business risks
  • Assessing business contingency and continuity plans
  • Evaluating cybersecurity and information technology systems

Although you might not have previously considered offering new services, you have helped your clients and community through this crisis. With a strong foundation of tax knowledge and business acumen, you inherently have the background and experience necessary to extend yourself to be advisory-centric.

When we move past the pandemic, a lot of CPAs still will provide tax compliance and tax planning services. But the conventional tax practice can evolve. CPAs have proven they can be the central network for advisory services and strategic business partnering in tax, financial planning, forensics, valuation and technology. It’s a natural fit.

Reimagining roles beyond those of a tax adviser only strengthens your value to existing and prospective clients.

To evolve your own practice, focus on those advisory-centric skills you’ve used in the past month. Look for more insights with the AICPA body of resources that are available to get you to the next level in tax advisory, forensics and valuation services, personal financial planning and information technology.

Also, consider enhancing your value and earn a credential to reinforce your strong service offerings. You’ve been offering non-conventional services in this rapidly changing and tumultuous environment, so why not keep doing it, but better?

Minh Graham, CPA, Lead Manager — Association of International Certified Professional Accountants

 

3 ways to stay marketable during an economic downturn

Shutterstock_248781739These are tough economic times, with unemployment levels at a record high. It’s an unsettling situation, but there are steps you can take today to future-proof your career. On a recent Go Beyond Disruption podcast, Beth Berk, recruiter for the finance and accounting profession; and Clar Rosso, the Association’s EVP of Engagement, Learning and Innovation; shared three things you can do to stay marketable during an economic downturn.

1. Invest in yourself

We’ve all heard about disruptive technologies and how they’re changing our job requirements. According to the World Economic Forum, these are the top skills you’ll need to perform most jobs in 2022:

  • Analytical thinking and innovation
  • Active learning and learning strategies
  • Creativity, originality and initiative
  • Technology design and programming
  • Critical thinking and analysis
  • Complex problem-solving
  • Leadership and social influence
  • Emotional intelligence
  • Reasoning, problem-solving and ideation
  • Systems analysis and evaluation

This list drives home the fact that as technology reshapes accounting and finance, CPAs will need different skills. Stay ahead of rapid change by taking time to upskill. This is an important part of making yourself valuable to current and future employers.

Almost overnight, COVID-19 accelerated the transformation of many businesses and firms. It will certainly change hiring practices and the type of employees they seek.

For example, organizations that adopted new technologies — like robotic process automation — are better equipped to minimize disruption from the virus. As businesses emerge from pandemic mode, they’re going to focus on how to minimize future disruptions. Employees who can understand, implement, use and train other staff on new technologies will be in demand.

Data analysis skills are also becoming critical. Using insights gleaned from data to pinpoint where a company is today — and where they need to go tomorrow — will make you invaluable to organizations trying to navigate their way through the pandemic and beyond. As Rosso stated, “There is a huge performance gap between what CEOs of organizations expect, want and feel their organizations need to do around data and what’s actually happening.”

ENGAGE2020, our largest event for the accounting and finance profession, offers many opportunities to pick up new technology skills, hear the latest guidance around COVID-19 and more. ENGAGE is an all-virtual format this year, designed in three distinct parts. The ENGAGE kick-off event offers complimentary CPE to all in June. The main event in July offers additional CPE opportunities.

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2. Market yourself within your current organization

“For those waiting to get recognized or promoted, now is not the time to be humble or shy,” Berk said. When she asks people seeking her help if they’ve looked for a new position internally, most say no.

“Networking or getting to work with people in other departments comes in handy,” Berk said. “You get to know other people and demonstrate your value to a different group. Sometimes a move to another department or team is a win-win for the company.”

How do you set yourself up for a career move inside your own organization?  Here are some tips:

  • Raise your hand and ask to take the lead on a project or stretch assignment that’s outside your day-to-day role.
  • Offer to train staff in an area where you’re an expert.
  • Suggest ways to improve workflows and processes.
  • Create a task force or committee to address internal issues.
  • Share your ideas and volunteer to implement them.

According to Berk, you shouldn’t overlook incorporating your personal interests, hobbies or volunteer activities when thinking about how to help at work. “Sometimes bringing that part of yourself to an organization helps you get noticed and get that promotion because someone saw a different side of you that they didn’t get to see on the job,” she said.

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3. Promote yourself effectively

If you’re unemployed or seeking a new career opportunity, a few simple tips will help you shine:

  • List your specific software skills on your resume. Berk observed that employers look for those skills, yet candidates often forget to list them.
  • Since recruiters often find candidates via LinkedIn, make sure your LinkedIn profile is up to date and aligns with your resume.
  • Display digital badges you’ve earned. Note credentials, designations and certifications.
  • Read the job postings you’re interested in pursuing. Incorporate keywords in your resume (if applicable to your experience) for better SEO when employers’ applicant tracking systems (ATS) scan your resume. Check out the Association’s Global Career Hub to see job listings and more tips for your job search.

Here’s one final piece of advice from Rosso to help you market yourself: “Find your sweet spot. Do what you love, what you’re good at and what drives value in the marketplace.”

While the current market downturn is hard, if you follow these three tips you will be prepared to take your career in the direction you choose. Hear more of the conversation in Go Beyond Disruption podcast.

Association Staff 

 

7 areas to consider when evolving your tax practice

IStock_59008810_XXLARGEThere’s no question that this was a tough tax season. And, with the tax deadlines delayed until July 15, it isn’t over. In our recent Tax Section survey, 60% said COVID-19 had an enormous effect on tax season. Practitioners noted the top three pain points related to assisting with the Paycheck Protection Program (PPP), understanding new legislation and guidance and struggling with ambiguity in the relief.

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Mainly due to necessity, tax practices significantly changed in 2020 to adapt to the current environment. In a webcast about the evolution of the tax practice, Brandon Lagarde, CPA, JD, LLM, and Jan Lewis, CPA, shared ways their firms try to think differently during this strange time. Here are some key points:

Get up to speed on legislation and evolving guidance.

Information was flying around at a rapid pace during the past few months when CPAs are normally hunkering down and knocking out a lot of work. Clients were anxious and calling their CPA more than ever. Emails were racking up. Firms were trying to make decisions about stay-at-home orders and how that affected working at the office. Timely absorption and dissemination of information were crucial.

Here are some ideas to get yourself, your staff and your clients up to speed:

  • Read the law. No, it’s not a summer fiction novel, but by reading the actual legislation, you can identify the gaps and questions.
  • Communicate often with your clients; consider providing a snapshot or client letter to discuss the highlights of the new laws and encourage them to contact you to discuss their specific situation. There are many client-facing resources on AICPA Tax Section’s coronavirus tax resource hub.
  • Consider hosting webcasts for staff and clients on important aspects of the law. Zoom, GoToWebinar and WebEx are some of the popular options but do research to find your best option. Webcasts explain information quickly and efficiently. Be sure the information is dated because it changes rapidly.
  • Another similar option is to record quick videos on topics. When you get client questions, you can direct them to a video rather than explaining for the 100th time how to calculate payroll costs for a PPP loan.

Automate workflow systems and remote working.

If your firm wasn’t set up and ready for a remote work environment before this tax season, the last few months have probably been tough. Once the dust settles, it’s a good time to consider firm processes and documenting them appropriately. Consider these questions:

  • Is your practice operating in the cloud or does it use a virtual private network (VPN)?
  • Does your firm have an automated workflow system?
  • Is there a client portal for secure information transfer?
  • What manual processes in the firm’s workflow can be automated?

Billing policies

Now may a good time to revamp your billing policies. Try noodling on a few of these ideas:

  • Does your practice accept credit cards or have a way to pay via bank transfer?
  • Would a subscription-based model help with cash flow for both the firm and clients?
  • Have you considered providing an alternative for clients to pay in installments?
  • Are you frequently contacting clients to gauge if they are having issues paying you or other service providers? Working out payment plans early is always preferred.

Manage remote employees.

Many people likely dabbled with working from home before COVID-19, but the stay-at-home orders made it a necessity. Many factors led to working from home during this time to be different, but there were employees who likely thrive in this environment. This could be a good time to formalize staff policies for remote working. That includes communicating clear expectations, frequent check-ins (consider video check-ins) and adding flexibility for different situations. 

Planning for the rest of 2020’s paid time off (PTO)

Mental breaks and vacations are important. It may be challenging to plan a vacation in this time of the unknown. But if employees do not take paid time off, the end of the year may roll around with some of them having a lot of “use-it-or-lose-it” PTO hours. December can be a busy time for year-end planning, and it isn’t a good idea for employees to take three weeks off in December to use their PTO. Consider asking staff to plan for time off between now and the end of 2020 based on the best knowledge available.  

Plan for contingencies and getting back to the office.

Your firm may have had an emergency plan in place before the outbreak of COVID-19. If so, kudos are in order. If not, now would be a good time to create a plan. Consider all the steps necessary to maintain business operations and a rapid response plan to deal with any situation. As businesses start to reopen and establish a new normal, consider surveying employees to determine their specific concerns and needs. Be sure to think about the risks associated with bringing employees back to the office.

Business advisory services

As tax professionals, you likely know more about Small Business Administration (SBA) loans than you ever thought you would. Given this difficult economic environment and all the uncertainty surrounding small businesses, clients need CPAs now more than ever. Have deep conversations with your clients about their needs. Guide them during difficult conversations related to cashflow planning. Now may be the time to consider adding client accounting services (CAS) since it is so important to make decisions with reliable accounting data.

It’s a wrap, or is it?

All things considered, you’ve weathered the past months and still have more to do. Adjusting to this new environment of running your practice will be a challenge. But, with a little strategic planning and organization, you can continue doing great things for the rest of the year.  

April Walker, CPA, CGMA, Lead Manager — Association of International Certified Professional Accountants

 

Another step closer to evolving CPA licensure

GettyImages-609799244On Wednesday, May 20, we took a big step toward propelling the CPA profession into the future.

If you read the blog posts I wrote in JanuaryMay and July of 2019, you’ll be familiar with CPA Evolution — a joint effort of the AICPA and the National Association of State Boards of Accountancy (NASBA) to design and implement a new approach to CPA licensure.

Our goal is to transform the CPA licensure model to recognize the rapidly changing skills and competencies the practice of accounting requires today and will require in the future.

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In January 2020, I shared how NASBA and the AICPA are proposing a core + discipline model for CPA licensure.

In this proposed model, all candidates would be required to demonstrate knowledge of a strong core in accounting, auditing, tax and technology. Then, each candidate would choose a discipline in which to demonstrate deeper skills and knowledge. Regardless of discipline, this model leads to full CPA licensure, with rights and privileges consistent with any other CPA. You can learn more about our proposed CPA licensure model at EvolutionOfCPA.org or by watching the video below.

On May 20th, AICPA’s Board of Directors recommended that the AICPA Council vote on a resolution supporting the CPA Evolution initiative. I’m thrilled to share that Council overwhelmingly voted in support of advancing the initiative.

This is great progress toward our goal of positioning the CPA profession for continued strength and relevance in a constantly evolving business environment. I would like to thank the Board and Council for their leadership and guidance since the inception of this initiative.

Pending conversation in June at the NASBA regional meetings with state board of accountancy members, NASBA’s board of directors will consider a companion vote of support this summer. If that occurs, we will move forward with implementing the new licensure model, with the goal of launching a new CPA Exam by January 2024.

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I want to say thank you to all of you.

Back in 2018, we began reaching out to stakeholders from across the profession asking for feedback on evolving CPA licensure. Since then, we’ve heard from more than 3,000 of you — CPAs working in firms of all sizes across the country; CPAs working in business and industry; members of the accounting academic community; volunteers; students; technology experts; state CPA society leaders; state boards of accountancy; and more.

It’s clear that you all are passionate about our profession and keeping it strong for decades to come.

We’ve come a long way since we shared an initial concept for CPA licensure in 2018, and your input shaped the licensure model NASBA and the AICPA proposed to Council.

Thanks to you we were able to develop a model that will position the profession well for the future.

As we look forward to the NASBA regional meetings and the NASBA board of directors vote this summer, I have never been more excited to be a part of this profession. I am hopeful that we’ll gain the support we need to continue moving forward with evolving CPA licensure. Regardless of the outcome, we will always continue to support the CPA profession and work toward its continued success.

Susan S. Coffey, CPA, CGMA, EVP — Public Practice, Association of International Certified Professional Accountants

 

Cyber criminals are finding ways to steal your digital dollars

Shutterstock_778558450The cryptocurrency market — such as bitcoin, ethereum and others — has taken hold in the financial world, with the market now worth more than $200 billion and growing daily.

With so much money at stake, it’s no surprise that bad actors find new ways to use the system to their financial advantage. In 2019 alone, an estimated $4.26 billion in cryptocurrencies was lost due to hacks, cybertheft, scams, misappropriation or insider fraud, up about 250% from 2018.

“With traditional money in our banking system, there’s a paper trail, a record of transactions,” said Mark DiMichael, CPA, CFF and forensic specialist with expertise in cryptocurrencies. “With cryptocurrencies, there is no paper trail. You can move large amounts of money without having to carry around a duffel bag of cash. It could be carried on a thumb drive or sheet of paper.”

That lack of a paper trail gives scammers more opportunity to embezzle funds, rip off investors or steal cash. Still, forensic accountants and financial investigators are finding new ways to track and trace cryptocurrency transactions and reduce the fraud opportunities.

What are cryptocurrencies and why do people use them?

Cryptocurrencies offer the facilitation of digital transactions without government interference or oversight. Bitcoin, the first cryptocurrency, was created in 2009 by Satoshi Nakamoto — a still unknown person or persons — as a system of money by the people, for the people. Cryptocurrencies are held in “wallets” that can take the form of a software application, a hardware device or a physical piece of paper. Cryptocurrency transactions are visible on a public online database or “blockchain.” The blockchain shows the cryptocurrency in account numbers called “addresses,” which are often a complex string of about three dozen numbers and letters.

The currencies are based on blockchain technology, and those who create — or mine — new blocks are rewarded with cryptocurrency for their work. Blockchain is largely presumed to be completely secure. It uses a distributed ledger system that essentially requires all participating networks to agree to any new inputs, and previously recorded transactions cannot be altered. Once created, cryptocurrencies can be used to pay for goods or services or traded on exchanges like any other currency.

DiMichael says that building a block is like baking a cake. Once it’s baked, you can’t go back to add more sugar. Similarly, once information is added to a block, it cannot be altered or deleted, unless all participating networks agree.

How are cryptocurrencies used in fraud schemes?

Still, the nature of cryptocurrencies and their complex cyber ecosystem offer ample opportunity for bad actors to engage in criminal enterprises or take advantage of others.

Some of the more prevalent cryptocurrency fraud scams are:

  • Investment and Ponzi schemes — As with other securities, perpetrators of these schemes dupe individuals into investing in non-existent cryptocurrency funds or cryptocurrency-backed securities. They may also try to enlist investors into mining operations to create new cryptocurrency and claim to use funds to purchase expensive, high-power computer systems capable of building blocks in exchange for cryptocurrencies.
  • Embezzlement — The QuadrigaCX case is perhaps the most notable incident of cryptocurrency embezzlement, as the exchange manager stole investor funds to support a lavish lifestyle. The scheme unraveled when the perpetrator reportedly died while on a three-month vacation in India, taking the passwords to the digital wallets with him. Investigators question whether the money was ever invested in cryptocurrencies.
  • Phishing — Cryptocurrency wallets are only as secure as the passwords protecting them. Through phishing scams, fraudsters trick individuals into sharing passwords, which allows access to cryptocurrency wallets to steal funds.
  • Ransomware — Hackers are increasingly targeting computer systems for takeover and offering access back only upon a ransom payment. In most cases, the hackers demand payment in cryptocurrencies to avoid being traced or arrested.

Once a person has taken another’s cryptocurrency, little  can be done to reclaim it, says DiMichael. The funds can be routed to a variety of wallets, moved to another country, run through a laundering service or cashed out into fiat currency.

Beyond theft and scams, some individuals try to use cryptocurrencies to hide funds from the government and others.

Tax fraud is perhaps the most prominent example. The IRS announced in 2014 that it would tax cryptocurrencies as property, and added a question for tax year 2019 about whether individuals transacted in any cryptocurrencies that may be taxable. Still, some believe they can use cryptocurrencies to hide income and funds.

Divorce lawyers are also reporting more spouses try to hide funds in cryptocurrencies to prevent having to share with their soon-to-be ex-spouses.

How can forensic accountants investigate cryptocurrency fraud?

Forensic accountants and other financial investigators are learning new tricks to better track cryptocurrencies. Clustering is a technique in which an investigator analyzes the blockchain to determine which addresses are connected.

“It’s a long, slow process,” DiMichael said of clustering. “Once you know a person’s wallet address, we can start to see the flow of money. But, it’s possible for savvy cryptocurrency users to break the trail.”

Rather, DiMichael and others warn people involved in cryptocurrencies to stay ahead of relevant fraud schemes to avoid having to track down and find stolen money. 

Learn more about schemes used to defraud cryptocurrency investors, as well as the limited regulations around cryptocurrencies and tips for how to “follow the money” in a cryptocurrency exchange. The AICPA’s Forensic and Litigation Services (FLS) Fraud Task Force’s latest Eye on Fraud report, Cryptocurrencies: Forensic techniques to meet the challenge of new fraud and corruption risks, discusses the variety of schemes used to defraud investors and what CPAs and forensic accountants need to be aware of as this new market emerges.

Association Staff