January 2016 AKCPA Newsletter

AKCPA Board President, Josh McIntrye, and Executive Director, Crista Burson, in the AKCPA's new office located at 2600 Cordova Street, Suite 211 in Anchorage.

President's Message

JANUARY 2016

Happy New Year! Looking back at 2015, it was definitely a year of change at the Alaska Society of CPAs. During the year, we brought on a new executive director, changed locations, and we saw the attest hour requirement for CPAs go away. These were all things that had been in place for decades. I can see a lot of good coming from each of these changes. We have an amazing executive director, Crista Burson, who is continuing the wonderful job that Linda Plimpton was doing, and also building new connections and making new things happen. Our previous lease expiring gave us the opportunity to better match the size of our physical location with our needs, and also reduce the cost which provides flexibility for the organization. The change in the attest hour requirement brought Alaska in line with most of the United States. Over the years I have known a number of CPAs who moved to Alaska and could not get their license because Alaska held on to this law. Now rather than worry about where and how to get 500 hours of attest experience, people in this situation can focus their time on things more relevant to their career.

A significant change that we are going to face is the demographic of our profession. I have mentioned this before in newsletters, and in my address at our annual meeting last year. Rather than just sitting back as things change, my preference is to look for opportunities to make changes easier, and to see how to make the most out of every situation. In the June 2015 newsletter I wrote about John Rodgers looking for someone to whom he could transition the chairmanship of Tax Committee. One of the functions of the Tax Committee is to create a legislative tax guide for our Alaskan legislators to help them understand the proper tax treatment of the various payments that they receive from the state. This year, John plans to work with students from UAA’s accounting program who are enrolled in income tax. This will benefit everyone involved. John will have others to help him get the work done, and the students who work with John will have the opportunity to learn from his experience and apply concepts learned in college to the real world. Working together will create an atmosphere where new ideas and new ways to get the job done can surface.

Much like the situation with the Tax Committee’s legislative handbook, there are opportunities for everyone to work with others in mutually beneficial ways and create situations where brilliant new ideas flourish. If you take it upon yourself to find opportunities to be exposed to new ideas, to freely share what you know, and are willing to work differently than in the past, you will find yourself flourishing too. My sincere hope is that 2016 is a wonderful year for everyone who reads this, and that all of us find the opportunity and blessings that come from the change in our lives during this new year.

 Josh McIntyre

American Institute of CPAs Proposes Expanding Joint Venture with CIMA

Legendary investor Warren Buffett has a saying: “Someone’s sitting in the shade today because someone planted a tree a long time ago.” This quote underscores the importance of anticipating and preparing today for the opportunities and challenges of tomorrow.

The CPA profession has a long history of doing just that. The AKCPA and the American Institute of CPAs (AICPA) currently are working on a wide variety of initiatives to enhance the relevance and vibrancy of the profession far into the future. These initiatives include programs to promote the value of CPAs as trusted business advisors, enhance audit quality, broaden the definition of attest, help firms identify and remedy issues during A&A engagements, evolve the Uniform CPA Exam, attract the next generation of talent, and meet the information and educational needs of members in public accounting, business, government and specialized services.

Approximately 50 percent of most state CPA society and AICPA members work in businesses of all sizes and ownership structures.  In response to the needs of these members, the AICPA formed a joint venture with the Chartered Institute of Management Accountants (CIMA) in 2011. CIMA is the world’s leading and largest professional body of management accountants. Founded in 1919, CIMA represents more than 227,000 members and students operating in 179 countries, working in industry, commerce and not-for-profit organizations. In January 2012, the two organizations launched the Chartered Global Management Accountant (CGMA) designation. The number of CGMA designation holders is now more than 150,000 worldwide, with over 50,000 in the U.S.

Now, the AICPA and CIMA are beginning a conversation with their respective members about a proposal to integrate their operations, strategy and management through a newly formed association. The AICPA would continue to serve members and protect, promote and grow the CPA profession. The new association aims to maximize efficiencies and provide a broader platform for further enhancing advocacy, promoting public and management accounting on campuses and with employers and clients, and developing new research and educational offerings. According to Arleen Thomas, CPA, CGMA, AICPA Senior Vice President-Management Accounting and Global Markets, “A presence in Europe will dramatically increase our ability to advocate for members on international matters that are increasingly impacting the U.S. securities system. In addition, the proposal would enable the profession to achieve even greater influence domestically and internationally and broaden the appeal of accounting to the next generation of professionals.”

Unwavering Commitment to the CPA

“Our strategy is built on the power of ‘And,’” said Barry C. Melancon, CPA, CGMA, AICPA President and CEO. “The AICPA would continue to maintain an unwavering commitment to the CPA, promote high standards for ethics and quality, and protect the public interest and the core values of the CPA profession. What we would gain through this new association with CIMA is the further professionalization of management accounting. Financial reporting is stronger when we drive quality in both public and management accounting.”

Trends Driving Need for Evolution

The CPA profession has a history of anticipating – and adjusting to – changes in market demands. The profession has grappled with and developed solutions to address increasing complex technology, specialization, and evolving business structures; these drove such evolutionary steps as the computerization of the CPA Exam, non-CPA firm ownership and the adoption of cloud computing solutions.

Current trends and challenges on the horizon have been carefully assessed by the AICPA as part of its ongoing strategic planning process. With record membership numbers and the CPA reputation at the highest level, the AICPA believes that the time is right to pursue a proposal that will better enable the profession to tackle such factors as:

• The growing worldwide talent shortage and associated demand for ever higher levels of specialized knowledge and services
• Significant demographic and generational shifts
• The increasing number of accounting graduates bypassing professional affiliation and the associated commitment to a professional code of conduct
• The shift of economic growth toward Asian and emerging markets
• The greater international mindset of today’s graduates and the overall trend toward more international connectedness and interdependencies
• Regulatory impact coming from Europe and other parts of the world that are affecting businesses in the U.S. 
• The need for finance professionals, facing an increasingly competitive job market, to differentiate themselves from their peers and demonstrate greater strategic management and business partnering skills

Benefits of the Proposal

This is a win-win for AICPA members – they keep everything they currently have and as a result of this proposal, the AICPA can provide expanded resources with broader perspective, especially on international business issues that are increasingly impacting CPA firm clients. In particular, the AICPA cites the gains in advocacy that could be realized when speaking on behalf of more than 600,000 current and next generation accounting professionals. The association of the AICPA and CIMA would form the most influential body for the accounting profession, within the U.S. and globally, advocating on tax, audit, financial reporting and other issues important to members.

“We are supportive of the direction the AICPA Board is recommending,” said Josh McIntyre, AKCPA Board President. “The changes this profession faces today are greater than ever. To preserve our relevance and stature, the profession needs to embrace change and consider innovative ways to better anticipate, reflect and lead. The work between the AICPA and CIMA has contributed greatly to the professionalization of management accounting, and that is much needed today. The proposal would bring together the entire accounting profession and extend the influence of a CPA-led accounting profession in the U.S.”

What’s Next?

Gaining member insights into the AICPA and CIMA evolution is critical to helping the Institute’s governing Council determine its next course of action. Council will assess member feedback and consider authorizing a member ballot in the spring. Moving forward would require a vote by members, with a majority of those voting supporting the proposal. CIMA has a similar requirement and timeline.

Members are encouraged to visit aicpa.org/horizons to find out more about what they could gain from a deeper relationship with CIMA and provide feedback on the proposal.

Member Spotlight - Rebecca Martin

Click here to read AKCPA President-Elect, Rebecca L. Martin's article, Building A Sole Proprietorship Through Networking, published in the AICPA's December 2015 edtion of The Practicing CPA. 

IRS IP PIN Mailing Information 

Due to an error, taxpayers are receiving Identity Protection PIN letters with an incorrect year listed. Taxpayers and tax professionals should be advised the IP PIN listed on the CP 01A Notice dated January 4, 2016 is valid for use on all individual tax returns filed in 2016.

The notice incorrectly indicates the IP PIN issued is to be used for filing the 2014 tax return when the number is actually to be used for the 2015 tax return.  The IRS emphasizes the IP PIN listed on the CP 01A notice is valid for the 2015 returns. Taxpayers and their tax professionals should use this PIN number for 2015 tax returns, which the IRS will begin accepting from taxpayers starting Jan. 19, 2016.

The IRS apologizes for the confusion and any inconvenience.

FAQ:

When were the CP01A notices mailed?

The notices are all dated January 4, 2016 but were mailed in late December. Taxpayers are receiving these now through mid-January.

What does an IP PIN do?

An IP PIN helps the IRS verify a taxpayer’s identity and accept their electronic or paper tax return. When you have an IP PIN, it prevents someone else from filing a tax return with your SSN. 

If a return is e-filed with your SSN and an incorrect or missing IP PIN, our system will reject it until you submit it with the correct IP PIN or you file on paper. If the same conditions occur on a paper filed return, we will delay its processing and any refund you may be due for your protection while we determine if it’s yours.

Does this issue affect anything else involving the IP PIN process?

No.