October 2012 Newsletter
President's Message
Bethe Davis
I recently participated in a panel at UAF that allowed a group of students to ask professionals about their career and choices. Some of the questions I was asked made me reflect on my own choice of a public career, and the future landscape of public accounting in Alaska. When I read about the future of the profession as it relates to projected work and staffing, the news is good for me as an employee but maybe not so good for the partners out there. According to a CPA Trendlines July 2012 article on accounting employment, “two-thirds of CPAs in all sectors of the accounting profession are enjoying better business than last year”, and “there’s still not enough staff to handle the added work. Seven in 10 CPAs across the profession cite the potential shortage of next-generation CPAs as a serious, looming issue”.
In a recent conversation with Melody Schneider, member of the AICPA’s Private Company Practice section and longtime multileveled participant within our state society, a recent AICPA survey found that accounting students are ranking entrepreneurship opportunities very highly in their list of attributes they look for in firms. The AICPA’s new focus on the trusted advisor concept and skill sets, and the vast array of specialization areas, indicate the profession of public accounting is evolving. It is up to us to be able to communicate, accommodate, and facilitate the diverse opportunities that can be available within a firm structure to attract and maintain the best and brightest. According to the U.S. Bureau of Labor Statistics, only a quarter of all accountants worked in the accounting services industry in 2010. Many of the remaining 75% likely started in public and transitioned to private, indicating there is a lot of lost opportunity in an industry that is short of the needed staffing.
According to US News & World Report, accounting is ranked number 21 in US News Best Jobs 2012. While not the highest rank, combined with the employment rates, and compared to other majors it is attracting more students recently. According to H. Charles Sparks, Director of UAF accounting program, they have yet another large group of graduating seniors this year and the highest membership in the accounting club that he can remember. Discussing the recent accounting recruitment week with a local partner garnered the comment that “this was the best group of strong interviewees he can recall”. News like this indicates the talent is out there waiting to be recruited and developed… but we must strive to retain some of that talent in public accounting and reduce the 75% going to private, especially now.
Smaller (and sole practitioner) public accounting firms in Alaska are in the same boat as the rest of the country. Many have a structure of older or aging partners that are looking to either retire or severely cut back over the next 5-10 years and may not yet have either the number, or quality of staff in place to support this. Additionally, they may not feel very secure that the right staff will be available when the day comes. In part, this may be due to the traditional “up and out” focus of burning and churning staff followed by some firms for staff’s early career years, and transition to management level work in private in the later careers years. It may also be an issue of the boomer population’s perception of their own mortality. The “40 is the new 30” youth culture mindset of denying age may yet come home to roost. From my own reading it appears that, nationally, an appalling number of firms may have no real plan at all, and may not have the necessary staff in place should they develop one.
Does your firm have a top structure that is aging and looking at a transition in the near future? Does it have a practical plan in place with good methodology for identifying, recruiting, and maintaining top talent for the long haul? Are your partners willing to consider a slower, gradual move to retirement- perhaps part-time positioning to allow for graceful transitions? Is there another firm that is a good fit you could transition into with the idea of then transitioning out into retirement?
According to the 2011 Cambridge Business and Economics Conference’s “Accounting for the Costs of Recruiting and Training” the costs of recruiting and training a new staff member can be in excess of 200% of their annual salary. While I think that is on the high side for Alaskan Firms, I could be wrong. In any case, it is a significant investment to make in any economy. It makes sound economic sense to focus on retention and longevity by early identification and cultivation of leadership potential, offering more diverse opportunities to encourage and develop entrepreneurship and longevity within the firm structure, in conjunction with your development of long range planning. When was the last time you looked at your long range plan?
AKCPA – Financial Literacy Committee
Josh McIntyre, Chair
A couple years ago Linda Plimpton called to ask if I would be interested in chairing the Society’s Committee on Financial Literacy. Having served on the committee in the past, I agreed. The Committee is tasked with improving the financial understanding of people within our state. This is obviously not something that we will one day achieve and be able to quit and move on to something else. It is a continuous process of raising awareness throughout our state utilizing various methods and forums.
After reviewing the efforts of the committee in the past, and meeting with current committee members, we decided to utilize the tools that the AICPA created through the 360 Degrees of Financial Literacy program. You can view their website at www.360financialliteracy.org, or by clicking “Financial Literacy” under the Public tab on the Alaska Society’s website. We also decided the best way to get information to receptive audiences would be to participate in existing events rather than trying to create our own events from the ground up. On October 20 we will be participating in the United Way’s Financial Fitness Fair. Information about the event is available at www.liveunitedanchorage.org/events.
We are working on ideas for future events, including Eagle River’s Bear Paw Festival next summer. As a committee, we hope to learn and improve our ability to effectively reach the public after every event we participate in. If you do not regularly use the 360 Degrees of Financial Literacy website I encourage you to do so, and to let others know about it as well.
Additionally, if you have ideas for our committee, or interested in volunteering please contact me at jmcintyre@mcc-cpa.com, or Linda Plimpton.
Nomination requests for Officers & Directors 2013-2014
Article 16 of the Bylaws requires the Nominating Committee to give each member an opportunity to advise the committee of his or her preference for each of the offices for the coming year. While the results of such preference balloting are not binding on the committee, the results are tabulated and considered.
Following is a listing of your 2011 - 2012 Officers and Directors:
Past‑President.................................................................Marja Beltrami
President..........................................................................Bethe Davis
President‑Elect...............................................................Amy Cooper
Treasurer.........................................................................Lance Bodeen
Secretary.........................................................................Cathleen Hahn
Directors continuing their term ......................................Rita DelaTorre
Josh McIntyre
Steven Pence
Completing second year of two year term.....................Jason Bontrager
Briget Lujan
Rebecca Martin
Hagelbarger directors:
Completing:
Third year of three year term..........................................Mark Schneiter
Second year of three year term.......................................Jane Lanford
First year of three year term........................……………Tracy Hartung
NOMINATIONS ARE REQUESTED FOR THE FOLLOWING OFFICES:
President-elect_______________________________________________
Treasurer ( 1 year)____________________________________________
Secretary (1 year)____________________________________________
Director (3 for 2 years) _______________________________________
_______________________________________
_______________________________________
Hagelbarger Directors (1 for 3 years -___________________________
Please return this form to the Alaska Society of CPAs, Inc., 341 West Tudor Rd. #105 Anchorage, Alaska 99503 by November 19, 2012. Attention: Nominating Committee or email nominations to akcpa@ak.net.
The AICPA Continues to Voice Concerns about Private PTIN Directories
Many AICPA members have received emails from companies that are publishing and promoting a list of persons who have registered with the IRS for a preparer tax identification number (PTIN). These companies have purchased the Service’s PTIN list, which is permitted under the Freedom of Information Act (FOIA). Last year, the AICPA had numerous conversations with IRS staff questioning the appropriateness of the specific data items that the IRS released, such as mailing addresses, email addresses, and phone numbers. We also suggested that the IRS: (1) provide an opportunity for preparers to “opt out” of the release of some or all of the personal and business information; and (2) adequately communicate with PTIN registrants about the disclosure of their information.
The Service did re-visit its FOIA releases and made some changes to partially restrict some of the data being collected from PTIN holders to protect their privacy. First, the IRS now permits tax return preparers to list either a physical address or a P.O. Box as the “business address” when registering or renewing their PTIN. Second, any valid email address can be provided to the IRS as long as the PTIN holder regularly checks the email address for PTIN communications. These changes provide the PTIN holder with the ability to stop the release (under FOIA) of a tax return preparer’s home address or of an email address that the preparer does not want made public.
The current directories of PTIN holders are private, commercially oriented ventures and are not endorsed by the IRS. The Service does have plans on setting up some type of “look-up” data base of PTIN holders tentatively scheduled for opening sometime after the close of the upcoming tax season in spring 2013.
Because much of the PTIN list and data is publicly available under FOIA, legal action by the IRS or others is unlikely. Nevertheless, we have raised questions with the Service about the possible misuse of, or confusion about, the use of the PTIN data. The IRS is reviewing the matter and is considering appropriate action.
We will keep the AICPA membership informed about any further discussions we have with the IRS, as well as any follow-up actions the Service decides to take in reaction to these private PTIN directories.
