November 2013 Newsletter
Bethe Davis, Linda Plimpton, John Rodgers, Amy Cooper and Lance Bodeen
AICPA Fall Meeting of Council
President's Message
“Good is the enemy of great.” ~
Jim Collins
My husband and I recently found out that one of our good family friends has been diagnosed with multiple sclerosis. She is 32. She is in the early stages of going through multiple tests that will help determine a prognosis and her medications. We are very hopeful that, while she now has a chronic disease, with the early diagnosis and good medication that she will continue to have a great quality of life.
I was at the AICPA Fall Council meeting the day I received the news. Bill Balhoff, the new chairman of the AICPA Board of Directors, was installed that day. That last day of Council began with a breakfast hosted by his state society, Louisiana, and an introduction of Chairman Balhoff. His state executive director described him as having “joie de vie” – a passion and enjoyment for life. The Council meeting ended with his remarks on the upcoming year.
His remarks centered on passion and quality – quality of our members, our profession and the work we do to serve the public. He discussed several steps the AICPA has taken to improve the quality of the people and the work of our profession. He announced the AICPA’s new Center for Plain English Accounting, a new resource that will be under PCPS. It will be “a one-stop, technical resource for small to midsize firms looking to cut through complexity and provide the best possible accounting and auditing services for clients.”
Another issue he discussed was one of special interest to me – the work the AICPA is doing in conjunction with academia to develop an accounting advanced placement high school class. If we can start early with providing quality accounting education, the benefits will be long-term and pervasive in the profession. It is the hope that within two to five years, the College Board will approve the AP course. State societies will be called on to do two things: encourage high schools to provide the AP Accounting class then encourage universities to accept the credit for the class.
He ended his speech with a quote – “Good is the enemy of great.” We have to take the passion we have for our work and continue to be quality and provide quality work. We cannot just be complacent.
As I reflected on Chairman Balhoff’s remarks about quality and passion, in the back of my mind was the news of my friend’s diagnosis. And my reflections on his comments and the thoughts on my friend were warring with each other for preoccupation. The inspiration provided by Chairman Balhoff was tempered by the shock of my friend’s diagnosis.
I realized that while the two seem at opposition, there was something similar I could take away from that day. We have an obligation to provide quality work to our clients, employers and the public – quality work based on integrity, solid core competencies and passion. But we also have an obligation to focus on the quality of our personal lives and our relationships with family and friends. We never know what the day will hold. All we get is the now. I know that my friend also has a real enjoyment for life and as she comes to terms with her diagnosis and prognosis, she will face whatever obstacles with a passion for life, surrounded by friends and family. Let us celebrate the now by taking advantage of the moment and make sure that quality and passion are interwoven throughout all facets of our lives and that we all strive to capture that “joie de vie.”
Report from AICPA Fall Council Meeting
By John Rodgers, CPA
I’ve just returned from the AICPA Fall Council Meeting and there’s a lot to report on. The discussions focused on many of the usual topics such as the future of the CPA and developing the next generation, tax reform and more.
The meetings started with interesting discussions on diversity and increased global competitiveness in the industry. Currently there is a very low percentage of diversity in the CPA industry with an AICPA movement to change that. Dr. James Johnson (UNC Kenan-Flagler Professor of Strategy & Entrepreneurship Director of the Urban Investment Strategies Center) was one of the guest speakers and gave a great discussion on the six disruptive demographic trends that are emerging from the 2010 census that will have a tremendous impact on politics, government issues and even the accounting profession.
- The South Rises - Again: Between 2000 and 2009 the US population has grown by 24.8 million people. Of that, 51.4% is in the south followed by the West at 32.7%, Northeast at 6.5% and Midwest at 9.4%. Texas has the largest share of the growth in the South claiming 30%.
- The “Browning of America”: The non-Hispanic white population has declined from 75% of the population in 1995 to 65% in 2009. The growth in the US is driven by minorities. With an estimated 300,000 to 400,000 illegal immigrants annually over the past two decades. Today, an estimated 11.5 million unauthorized immigrants reside in the U.S. In 2011, the U.S. foreign born population by race led by Hispanic at 46.5%, Asian at 24.7 and white at 18.8.
- Marrying Out is “In: Inter-racial marriages are adding to the browning of America. These “out-marriages” are up 14.6 % of new marriages in 2008 compared to the 6.7% in 1980.
- The Silver Tsunami is about to hit - “Graying of America: The first baby boomer turned 65 in January 2011. Now there are 79 million baby boomers exiting the workforce over the next 20 years. The retired are going back into the workforce which means there will be four generations in the workforce.
- The End of Men: Women have had a steady upward movement in gaining education, closing the wage equality with 67% of women being the bread winners or co-bread winners in the household. Today, three times as many men of working age do not work at all compared to 1969. This decline in men in the labor market is due to skills mismatches, disabilities and incarceration.
The number of male college graduates hasn’t changed for 35 years. Studies have shown:
i. 193,000 more women get their associates degree
ii. 244,000 more women get a bachelors degree
iii. 134,000 more women get a masters degree
iv. 1,400 more women get a doctorate
6. Cooling Water from Grandma’s well…and Grandpa Too: Due to the graying of America and lack of jobs for men there has been a dramatic increase of grandparent led households. More grandparents are raising kids and they are much younger. Between 2001 and 2010 the number of children living with grandparents increased by 26.1% or 1 million.
Sal Khan with Khan Academy was in attendance at this year’s conference. Sal is a dynamic man with an amazing vision to give free education around the world. For those of you that are unfamiliar with Khan Academy, it is an online site that provides free tutorials and resources for students, teachers, parents, really anyone. The site is available to anyone and covers topics such as math, science, economics and more. The mission of Sal is to offer a free world class education to anyone anywhere.
Sal began this unique concept of education when tutoring his cousin in math. He was demonstrating the math concepts using Yahoo Doodle notepad and posted the video of his training on YouTube in 2006. The online video became hugely popular and by 2009 he quit his job as a financial analyst to focus on developing his online YouTube channel, Khan Academy. In this short period of time, his videos have been viewed more than 283 million times. His philosophy to accelerate learning for students of all ages has grown Khan Academy in over 200 countries, in 30,000 classrooms, 9,000,000 unique monthly users with 1,200,000,000 problems answered through the site. His first video that he created in 2006 used to tutor his cousin is still being used today.
Khan Academy just launched a partnership with Bank of America to help people master the basics of personal finance. This information can be located at www.bettermoneyhabits.com. For more information on Khan Academy they can be found at www.khanacademy.org.
Barry Melancon, President and CEO of AICPA, and other AICPA staff provided an insightful update on what the AICPA is working on for members. It included tax reform discussions and the tax reform positions of the AICPA which includes correcting for 1099, revising the due dates for tax returns, penalty reform, identity theft and more.
Identity Theft continues to be a hot item and a major issues influencing tax administration. Currently there are over 450,000 cases in the IRS. That’s a 78% increase over FY12 and continues to grow. There were 1 million suspicious returns suspended by the IRS just this filing season. To date the IRS has spent $328,000,000 on identity theft efforts in FY 2012. The AICPA is clear on their positions to help combat this which includes having one point of contact at the IRS, enhance the civil penalties for offenders, clarify access to the Death Master File and expand scope of truncation through legislation and regulations.
Update on the requirement for municipal advisors to register with the SEC through the Dodd-Frank Act. Under this new requirement, accountants will not have to register if the accountings services they are providing include audit or attestation services, preparation of financial statements or are issuing letters for underwriters. Tax advice was not included in this change.
There was a discussion on the expansion of the ERISA fiduciary definition and the concerns of lack of reach or control by the Department of Labor. AICPA feels this challenges independence. The AICPA’s position is that the rule should state that only qualified individuals prepare valuations for benefit plans and that these individuals would follow recognized valuation standards.
At the meeting the AICPA provided the documentation and framework for the new Financial Reporting Framework for Small and Medium Sized Entities. The FRF for SMEs outlines the framework for Non-GAAP reporting options. It details targeted disclosure requirements, options to allow financials to be targeted to the user’s needs, simplified consolidation model, historical cost measurement basis and more. For more information or to download the document go to http://www.aicpa.org/InterestAreas/FRC/AccountingFinancialReporting/PCFR/DownloadableDocuments/FRF-SME/FRF-SMEs-Framework.PDF
The Pathways Commission – National strategy for the next generation of accountants discussed the final report and the seven recommendations to develop future CPA’s. Some of the recommendations include items like integrating accounting research into accounting courses and programs, develop multiple options for degrees in accounting, engage the accounting community to define the body of knowledge that is the foundation for accounting in the future, increase student access to masters programs, and to enhance the benefits of high school accounting education. To read the entire report the link is below.
http://commons.aaahq.org/groups/2d690969a3/summary
If you would like any further information on the conference or items discussed in this report please feel free to email or call me direct. I would be happy to forward you the conference material.
Best regards,
John Rodgers, Council Member
November News Article
I attended the CPA/SEA President Elect Conference and the American Institute of CPAs (AICPA) Fall Council meeting in mid-October.
I was very cynical about attending the respective Conferences because of the National Issues being discussed and the relevance to Alaska.
It is very apparent that I should have embraced this opportunity. It is remarkable the amount of leg work done by the AICPA to further our profession.
This article will identify a few of the AICPA initiatives and advocacy for our profession.
#1- Financial Reporting Framework for Small and Medium Sized Entities (FRF for SMEs):
The AICPA has been very active in educating banks on the benefit of FRF for SMEs versus the traditional U.S. GAAP Financial Statements.
No matter your stance on this new accounting framework, it has brought about action at the Federal level.
This AICPA initiative lit a fire for the Financial Accounting Standards Board (FASB) to put an advisory body, the Private Company Council (PCC), to work jointly with the FASB and “mutually agree on a set of criteria to decide whether and when alternatives within U.S. Generally Accepted Accounting Principles (GAAP) are warranted for private companies. Based on those criteria, the PCC will review and propose alternatives within U.S. GAAP to address the needs of users of private company financial statements.”
The PCC can drive authoritative change for private companies under U.S. GAAP, which in my opinion, makes a lot of sense for those that prepare and use U.S. GAAP financial statements.
The National Association of State Boards of Accountancy (NASBA), who came out strongly against the non-authoritative FRF for SMEs, would embrace any authoritative change brought by the FASB relevant to U.S. GAAP.
#2- The Pathways Commisson:
The Pathways Commission, which is a joint project between the American Accounting Association and the AICPA was formed recently to be active in promoting higher education. The current initiative is putting Advanced Placement Accounting Courses in high schools across the United States. It will give us the necessary exposure to introduce our profession earlier at the secondary education level. This is a great initiative and I will do what I can to help promote this in Alaska.
#3- Mandatory Auditor Rotation:
The AICPA has been active in the legislation that there was no mandate on changing auditors in the United States. This legislation has already passed the U.S. House of Representatives. The AICPAs stance is that consistency is critical for producing the best quality audits.
#4- CPA Brand:
The AICPA has been actively involved internationally to ensure that the CPA brand endures. This is critical to the U.S. CPAs because of recognition. We are in a global environment now and the brand needs continued protection for its importance to the accounting profession.
#5- CPA Retention and Cultural Diversity:
The AICPA has identified that while accounting students are graduating from college in record numbers that CPA Firms retention has been a very large issue. The issue is especially important for retaining minority CPAs as the percentages identify the lack of minority CPAs and CPA candidates staying in the profession. The AICPA has put an emphasis on retention and especially on retaining minority CPAs to maintain diversity in our profession. Whether you like it or not, “Father Time” hits everyone and there needs to be enough CPAs to replace the current CPA practitioners.
The AICPA brought in James Johnson, Ph.D., professor at the University of North Carolina, Chapel Hill, to address the ethnic changes going on in the United States. I have attached the article in the Journal of Accountancy which provides a synopsis of Dr. Johnson’s presentation on the six disruptive demographic trends .
The main thing I took out of his presentation is that current United States citizens need to re-think their position on immigration and minorities in the United States.
The numbers bear out that there are not enough workers in the United States to maintain financial stability to its baby boomers who began “reaching age 65 on Jan. 1, 2011, and will continue to do so at a rate between 8,000 and 10,000 a day for 19 years, according to differing estimates.” The United States needs a population base that can help participate in the financial stability of our baby boomers.
Based on current birth rates, Hispanics are the only race increasing its population base in the United States. The numbers are staggering as all the other races are either just replacing themselves or are not producing enough offspring to offset themselves. By the numbers, there will be cultural diversity across the United States, so embrace it.
I apologize for any duplication to John Rodgers article on the AICPA Fall Council, but wanted to give my opinion on a few of the AICPA initiatives. I would also like to say a large “thank you” to the Alaska Society of CPAs membership for allowing me this opportunity to represent Alaska.
Thank you.
Lance Bodeen
AICPA Professional Liability
Insurance Program
We are proud to announce that we are teaming up with the AICPA to spread the word regarding the value of the AICPA Professional Liability Insurance Program.
If you haven’t already considered the AICPA Program, here are a few reasons why you should:
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More than 25,000 CPA firms have placed their trust in the AICPA Professional Liability Insurance Program.
Small firms with three or fewer professionals: Please visit www.cpai.com/URL to access the online application and purchasing process. You can obtain a free, no-obligation quote in just minutes, with the option to purchase online with a credit card. If you have questions, please call 1-800-221-3023 and mention that you are affiliated with the Alaska Society of CPAs.
Mid-sized and large regional firms: Please call Amy Massaro at 1-800-221-3023 for more information. When you call, please inform Amy that you are affiliated with Alaska Society of CPAs.
SENIOR ACCOUNTANT
(FULL OR FLEX TIME)
F. M. Strand & Associates, P.C., a local CPA firm in Anchorage, Alaska, is looking for a motivated experienced candidate to join our team of professionals dedicated to excellence in the growth and success of both our clients and employees. Applicants should have at least two years of public accounting experience and a CPA certificate (or be in the process of obtaining one). Visit our website at www.fmstrandcpas.com for more details.
The position available relates to both financial statement and income tax services primarily for construction clients. A flex schedule can be mutually agreed upon to accommodate children in school.
We work with a wide variety of clients who require organization, technical skills, and effective communication. Our team leaders enjoy training and developing the staff, researching and resolving complex accounting and reporting matters, and taking ownership in the firm’s continuing success. Rapid advancement to ownership in the firm is possible. No overnight travel is required.
Competitive salary and benefit package is available depending on experience.
To be considered for this position, please submit a cover letter and resume to fmstrand-cpas@att.net.
