INSIGHT Magazine - Winter 2011 - Practice Management Special Issue

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THE MAGAZINE OF THE

Exploring the issues that shape today’s financial world g icpas.org/insight.htm

take a step in the

right directionA practice management special issue

Year 2020 in FocusStrategize for Succession Software Solution Providers to KnowMeet Big Risks Head OnSave Energy to Save on CostsBecome a Social Media GuruGet to Know an Attorney Alternative Investments Reborn

11INSIGHT_Winter_12_9FNL:INSIGHT 12/9/11 2:40 PM Page I

1 800 803 8367© 2012 Robert Half. An Equal Opportunity Employer. XXXX-XXXX

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1.800.803.8367 1.800.803.8367 © 2012 Robert Half. An Equal Opportunity Employer. XXXX-XXXX

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© 2011 Robert Half. An Equal Opportunity Employer. 0911-9011

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32 2020 VisionBy Derrick LillySmall accounting practices are facing a world of change. Are you thinking ahead?

38 The Elephant in the RoomBy Deborah LaneSuccession is a top priority for today’s CPA firms. So why aren’t they planning for it?

42 The Software PrincipleBy Clare FitzgeraldA range of powerful yet simple and intuitive applications keeptoday’s accounting practices humming.

10 Tax Decoded The Audit Hour, Pt. 2By Keith Staats, JDHow to survive an audit—and challenge the results if you have to.

12 Forensics Insider The Social AccountantBy Brad Sargent, CPA/CFF, CFE, CFS, Cr.FA, FABFAJust how public is your social media-savvy accounting staff?

14 Retirement Advisor The Last MileBy Mark J. Gilbert, CPA/PFSA how to for advisors working with clients 12 months out fromretirement.

16 Capitol Report Your Cooperation RequiredBy Marty Green, Esq.How will registered tax return preparer requirements impact you?

18 Investing In With the OldBy Carolyn Tang KmetIncreased transparency and decreased investor qualifications arejust some of the factors fueling the return to alternative investments.

22 Risk Take Your Own MedicineBy Kristine Blenkhorn RodriguezDespite the fact that CPA firms advise clients on risk management,many don’t take their own recommendations to heart.

26 Liability A+ TeamBy Christine BockelmanWhen accountants and attorneys join forces, clients feel the service difference.

28 Bottom Line Energy SaverBy Selena ChavisCut your utility bill today for increased ROI tomorrow.

30 Social Media Follow, Friend, ConnectBy Dana KayeHow to grow your firm in the social media age.

4 First WordA message from the Illinois CPA Society’s President & CEO.

6 Seen & HeardNews bytes, sound advice and practical business tips.

46 Classifieds

46 Advertiser Index

48 Volunteer NewsThe latest from the Illinois CPA Society’s CPAs for the Public Interest.

www.icpas.org /insight.htm

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INSIGHT MAGAZINE

Publisher/ICPAS President & CEO Elaine Weiss

Editor-in-Chief/Director of Publications Judy Giannetto

Creative Services Director Gene Levitan

Creative Services Manager Rosa Garcia

Publications Specialist Derrick Lilly

National Sales & Advertising Angie VanGorderYGS Group, 3650 West Market Street, York, PA 17404 P: 800.501.9571 x176 F: 717.825.2171 E: [email protected]

Circulation/Member Services Director Carl Siska

Editorial Offices: 550 W. Jackson Blvd., Suite 900Chicago, IL 60661

ICPAS OFFICERS

Chairperson, Robert E. Cameron, CPACameron, Smith & Company PC

Vice Chairperson, James P. Jones, CPAEdward Don & Company

Secretary, William P. Graf, CPA Deloitte & Touche LLP

Treasurer, Daniel F. Rahill, CPA, JDKPMG LLP

Immediate Past Chairperson, Sara J. Mikuta, CPAWifpli LLP

ICPAS BOARD OF DIRECTORS

Edward J. Hannon, CPA, JD, Freeborn & Peters LLP

John A. Hepp, PhD, CPA, Grant Thornton LLP

Geralyn R. Hurd, CPA, Crowe Horwath LLP

Paul V. Inserra, CPA, McClure, Inserra & Co., Chtd.

Leif J. Jensen, CPA, Leif Jensen & Associates Ltd.

Kathleen M. Kedrowski, CPA, Navigant Consulting

Michael J. Maffei, CPA, GATX Corp.

Elizabeth A. Murphy, PhD, CPA, DePaul University

Michael J. Pierce, CPA, RSM McGladrey Inc.

J. Bradley Sargent, CPA, Sargent Consulting Group LLC

Edward H. Stassen, CPA, Golden County Food Holdings Inc.

Reva B. Steinberg, CPA, BDO USA LLP – Retired Consultant

Thomas L. Zeller, PhD, CPA, Loyola University of Chicago

INSIGHT is the official magazine of the Illinois CPA Society, 550 W. Jackson, Suite 900, Chicago, IL 60661, USA. Its purpose is to serve as the primary news and information vehicle for some 23,000 CPA members and profession-al affiliates. Statements or articles of opinion appearing in INSIGHT are not necessarily the views of the Illinois CPA Society. The materials and information contained within INSIGHT are offered as information only and not as prac-tice, financial, accounting, legal or other professional advice. Readers are strongly encouraged to consult with an appropriate professional advisor before acting on the information contained in this publication. It is INSIGHT’s poli-cy not to knowingly accept advertising that discriminates on the basis of race, religion, sex, age or origin. The Illinois CPA Society reserves the right to reject paid advertising that does not meet INSIGHT’s qualifications or that maydetract from its professional and ethical standards. The Illinois CPA Society does not necessarily endorse the non-Society resources, services or products that may appear or be referenced within INSIGHT, and makes no representa-tion or warranties about the products or services they may provide or their accuracy or claims. The Illinois CPA Society does not guarantee delivery dates for INSIGHT. The Society disclaims all warranties, express or implied, and as-sumes no responsibility whatsoever for damages incurred as a result of delays in delivering INSIGHT. INSIGHT (ISSN-1053-8542) is published four times a year, in Spring, Summer, Fall, Winter, by the Illinois CPA Society, 550 W.Jackson, Suite 900, Chicago, IL 60661, USA, 312.993.0393 or 800.993.0393, fax: 312.993.0307. Subscription rates for non-members: $30 US, $40 Canada and international addresses, $42 Mexico. Copyright © 2011. No partof the contents may be reproduced by any means without the written consent of INSIGHT. Permission requests may be sent to: Publications Specialist, at the address above. Periodicals postage paid at Chicago, IL and at additionalmailing offices. POSTMASTER: Send address changes to: INSIGHT, Illinois CPA Society, 550 W. Jackson, Suite 900, Chicago, IL 60661, USA.

FIRST WORDTechnology allows us to create a world tailored to our specifictastes and interests, whether in music, news and everything inbetween. These are, for all intents and purposes, our “comfortzones”—the places we know and in which we feel secure andfree from today’s clutter and information overload, so we canfocus on what we consider truly useful.

Often, ICPAS members build their professional comfortzones around the CPA designation, only to fill it with otherswho share the same specializations—audit, tax or corporatefinance, for example.

But our membership base is actually a diverse group, and opportunities will be missed bynot wandering beyond the familiar to make valuable new connections. No matter yourspecialty, if your business is large or small, public or private, there’s insight to be gainedfrom each other.

Recently, for instance, the Society took a closer look at small practices through a series offorum discussions (turn to our feature on page 32)—a group that accounts for 19 percent(approximately 4,700) of ICPAS members. Understanding what’s happening within thissegment is important to the profession generally and to you specifically. For starters, it’sreassuring to know that this group is optimistic about the future. What’s more, it recog-nizes the need for change. Becoming more niche-focused, improving the integration ofbusiness practices with technology, and developing a progressive workforce are top-of-mind for this group. Of course, reinvigorating and promoting the CPA image is also justas important to this group as it is to all of us.

To accomplish our mutual goals, we need to build upon what we’ve learned from thisgroup by connecting with each other. By being a part of the ICPAS LinkedIn Group, forinstance, you can start thought-provoking discussions. Or you can get live assistance andshare ideas through The Network—a database of volunteer experts—or through our staffsubject matter experts, our in-house information and research staff, or our member forums.And don’t forget to stay in-the-know by reading our eNewsletters: Practice Advantage[www.icpas.org/practiceadvantage.htm] for public practice news, Capitol Dispatch[www.icpas.org/capitoldispatch.htm] for the latest regulatory and legislative updates,NewsFlash [www.ccflinfo.org/newsflash.htm] for corporate leaders and CareerSpace[www.icpas.org/careerspace.org] for career and hiring news specifically geared towardsCPAs and “the people who hire them.”

Step out of your comfort zone, broaden your perspective and get connected. You’ll bepleasantly surprised by what it adds to your personal and professional success.

A MESSAGE FROM THE ILLINOIS CPA SOCIETY PRESIDENT & CEO

Elaine Weiss

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SEEN HEARDNEWS BYTES, SOUND ADVICE AND PRACTICAL BUSINESS TIPS&

3.5% expected average increase in 2012 starting salaries for financeprofessionals & accountants. Source: Robert Half 2012 Salary Guide

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Turnover Rates Set to RiseEmployee turnover is expected to increase world-wide during the next five years, according to a RightManagement [right.com] global survey of more than2,000 internal and external recruiters, HR execs andhiring managers from 17 countries and more than20 industries. Fifty-nine percent of North Americanrespondents, 58 percent of Asia-Pacific respondentsand 41 percent of European respondents expecthigher turnover, compared to only 14 percent glob-ally who anticipate a decline in turnover. In a separ-ate survey of North American workers, greater opp-ortunity for advancement is the number one prioritysought by employees in their next position (27 per-cent), followed by better management (21 percent),a more flexible work environment (21 percent), bet-ter compensation (17 percent) and less work pres-sure (14 percent). 8

Employees Pose Threat to Mobile SecurityDespite the fact that organizations devote significant resources to protecting theircomputer networks, employee practices still pose heightened risks to security. A Deloitte[deloitte.com] poll surveying nearly 1,200 US IT and business executives found that 40percent are unaware of whether their organizations have strategies, policies, proced-ures or controls in place to enforce mobile security. What’s more, nearly 29 percentbelieve there are unauthorized PDAs, tablets, or a combination of both, connecting totheir enterprise Intranet and email servers. And nearly 87 percent feel that theircompany is at risk of a cyber attack originating from a mobile security lapse.

IT is Top CFO PriorityA survey conducted by Robert Half ManagementResources [roberthalfmr.com] reveals that US CFOsare most likely to commit resources and capital tonew or upgraded IT systems (35 percent) in 2012, inaddition to developing new products and servicelines (21 percent), introducing new locations (14percent), and pursuing mergers and acquisitions (11percent). Organizations need to prioritize invest-ments and staffing resources carefully, says RobertHalf, which offers advice on the four most commonIT investment pitfalls:One: Cutt ing corners. Moving too quickly andbeing overly cost-conscious in the beginning stagesmay backfire if later upgrades are needed.Two: Addressing the wrong problem. Makesure the actual system is the issue before launchingan upgrade or new implementation. Three: Overlooking the worst-case scenario.Consult a subject matter expert so you understandthe full scope of the project and identify potentialblind spots; then adjust plans accordingly.Four: Relying too heavily on internal staff.Stretching employees too thin can lead to errors,delays and lower morale.




SEEN&HEARD

90.4 million Number of US individual investors who owned

mutual funds in 2011 (2.6 million less than in2010). Source: Investment Company Institute

FINRA Urges: Maximize Your 401(k)!According to the Financial Industry Regulatory Authority’s [www.finra.org]recent study, nearly 30 percent of all US workers do not contribute enoughto their 401(k)s in order to receive their full employer match, and anastounding 43 percent of younger workers (20-29 years old) are failing tocontribute enough to earn the full match available to them. What’s more,an earlier study showed that 40 percent of employees making less than$40,000 a year fall short of earning their employer's full match.

CR Reporting on the Global AgendaKPMG’s [www.kpmg.com] International Survey of Corporate ResponsibilityReporting 2011 reviewed the reporting trends of each of the GlobalFortune 250 (G250), as well as 3,400 companies worldwide, representingleaders in 34 countries and 15 industry sectors. The survey found that 95precent of G250 companies have undertaken corporate responsibility (CR)reporting, while the 100 largest companies (N100) in each country haveincreased reporting by 11 percent since 2008—to 64 percent overall.What’s more, nearly half of the G250 companies report a gain in financialvalue as a result of their CR initiatives. Despite the absence of a regulatoryglobal sustainability reporting standard, the drive for consistency andaccessibility to quality data has led 80 percent of the G250 and 69 percentof N100 companies to use the Global Reporting Initiative SustainabilityReporting Guidelines as the go-to standard.

TREND SPOTTER:Renewable Energy in High DemandAccording to the latest research from Grant Thornton’sInternational Business Report [www.grantthornton.com],unrest in the Middle East and North Africa, and itsimpact on oil prices, has driven increased support forgovernment investments in renewable energies. In theUnited States (41 percent) and globally (44 percent),businesses are more likely to support increasedgovernment investment. What’s more, 55 percent ofglobal respondents said they would accept higherenergy costs in the short term in order to reduce relianceon oil and have more stable prices in the longer term.


We need you at the table.

Serve on an Illinois CPA SocietyAppointed Committee or Task ForceUse your skills, knowledge and leadership to help govern andguide the work of your Illinois CPA Society.

From developing new member services, to upholding qualityassurance standards, to responding to technical issues, yourservice helps to enhance the value of the CPA profession.

Committee & Task Force service is open to all Illinois CPASociety regular and affiliate members. Positions are limited and all requests may not be able to be accommodated.

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Project2:Layout 1 12/9/11 3:33 PM Page 6

The Audit Hour, Pt. 2How to survive an audit—and challenge its results if you have to.

By Keith Staats, JD

TAX DECODED


So, the day has come. An auditor is sitting in your officesreviewing paper and electronic documents to determine theaccuracy of state tax returns. At some point, he or she willrequest information that may seem irrelevant, unnecessary orunduly burdensome. So how should you respond?

First, know that you have the right to push back if you feelthat these requests are inappropriate. Requests to reviewsource documents that form the basis of the tax returns, how-ever, are apt.

You have the right to ask the auditor to justify his or herinformation requests, and the auditor should be able toexplain the reasoning behind those requests and how theyrelate to the audit. If you disagree with the auditor’s explana-tion, you should request a consultation with the auditor’ssupervisor. Do not, by any means, simply ignore or refuse tocomply with information requests without first negotiatingwith the auditor—unless you’re prepared to deal with thepotential consequences.

If you can’t or won’t produce the documentation request-ed, the auditor can take whatever position he or she wishesto, with the justification that the taxpayer provided no infor-mation to disprove it. Remember that the introduction of anaudit assessment in an administrative hearing or in courtestablishes the revenue department prima facie case. It’s thenup to the taxpayer to rebut the tax department’s assessment.

What’s more, if you decline to provide the requested information, Illinois sales and usetax law provides that the Illinois Department of Revenue is authorized to demand the doc-umentation in the form of a “60-day letter.” This letter requires the information to be pro-duced within 60 days of its issuance, and if not produced, the taxpayer can’t produce itat a later stage in the audit process or in any subsequent litigation. If you receive a 60-day letter, or an auditor is contemplating issuing one, it’s critical to consult with an expe-rienced Illinois tax professional to craft a response.

When the auditor is done gathering information, he or she should advise you of any poten-tial tax deficiencies, and discuss what additional evidence or information could be providedto address any concerns. As a matter of practice, it’s always best to resolve as many issues aspossible during the audit as opposed to waiting until an assessment is issued. If discussionswith the auditor aren’t fruitful, again, don’t hesitate to involve the supervisor. Of course, con-sulting an experienced tax professional at this stage may be money well spent.At the audit’s conclusion, the auditor will provide a set of audit work papers, and theIllinois Department will provide a notice of proposed tax liability (sales and use tax) or pro-posed deficiency (income tax). In Illinois, a taxpayer has 60 days to determine whether tofinalize the proposed assessment as agreed and pay the tax; finalize the audit as unagreedand have the auditor issue a protestable notice of tax liability or deficiency; or seek a review

Keith Staats is a senior manager of

Grant Thornton’s Chicago-based State& Local Tax practice, having previouslyserved as general counsel of the IllinoisDepartment of Revenue. In this capacity,Keith was involved in the development oftax policy, the evaluation and review oftax-related legislation, and the over-viewof tax-related litigation.


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of the audit by the Department’s Informal Conference Board (ICB) priorto the protestable assessment being issued. Whether to go to the ICB isa critical decision to make.

Taxpayers should keep in mind that because the ICB review is a pre-assessment review, the Department retains the right to raise issues notraised by the original auditor. As a result, it’s possible that a proposedaudit assessment could increase. An analysis of such a possibility is animportant factor in determining whether to seek ICB review. For thepurposes of the review, taxpayers may represent themselves or be rep-resented by any person they choose (including an accountant).

Prior to the hearing, the ICB case is assigned to a conferee, who dis-cusses the case with the taxpayer or representative, and who has theauthority to request additional information. A hearing before the ICB isthen scheduled. These hearings are informal, are not recorded, andallow the taxpayer or representative to present arguments to the Boardand answer any additional questions.

At the hearing’s conclusion the conferee will review the argumentsand information presented, and will make a recommendation to theBoard. The taxpayer also has the opportunity to offer the ICB a dispo-sition or settlement offer. These offers can be made at any time,although if an offer isn’t made prior to the hearing, it should be madeshortly after its conclusion. Notice of the intent to make an offer shouldbe given to the conferee as soon as the determination is made.

Upon receiving the ICB decision the audit division will issue a finalprotestable notice of tax liability or notice of deficiency. A taxpayer thenhas the option to either protest the assessment without paying the taxand seek an administrative hearing before the IDOR’s AdministrativeHearing Division, or pay the tax, penalty and interest under protest(under the Protest Monies Act) and go directly to Circuit Court.

icpas.org/insight.htm | WINTER 2011 11

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The Social AccountantJust how public is your social media-savvy accounting staff?

By Brad Sargent, CPA/CFF, CFE, CFS, Cr.FA, FABFA

FORENSICS INSIDER


Every new auditor is told this cautionary tale: Twofirst-years are out of town for a client audit. After thefirst day’s fieldwork, they retire to a local wateringhole. Well-intentioned first-year A tells well-inten-tioned first-year B, “Hey, did you get a chance to lookover the bank recs? They are unbelievably bad. I haveno idea who’s in charge of reviewing them, but theymust be incompetent!” From there, fueled by strongspirits and weak judgment, the two accountants spendthe next 20 minutes discussing their unfavorable opin-ions of the client. Unbeknownst to them, the client’sCFO (who they didn’t meet) is sitting at the next tableand overhears the entire conversation.

Nowadays, this tale is so dated that trying to share itwith Millennial accountants would be futile. The newspin would read more like this: A staff auditor arrives atthe client site for fieldwork. After a brief tour of thefacility, she prepares to get to work. But first, armedwith her smart phone, she tweets (@beancounter),“Client has NO SoBe Cherimoya Punch! Mr. Coffee???Get real.” To add flavor to her insights, she takes aquick snapshot of the client’s Mr. Coffee machine in thebreak room (client’s name prominently displayed in thebackground) and posts it along with the tweet. Her BFF,a cost accountant at a private firm, loves this and poststhe text and picture to her Facebook account. One of

the BFF’s 578 Facebook friends sees the picture and adds some dynamic video effects andmusic, and suddenly “Mr. Coffee sings I Hate This Place” is on YouTube and going viral.

Now, those of you who need help interpreting this last paragraph should just stop read-ing. For the rest of you, this is as likely to happen as the example referencing staff in the bar.

The client’s grandson spends all day running continuous feeds on YouTube, includingtracking mentions of grandpa’s business. He thinks that “Mr. Coffee sings I Hate ThisPlace” is the bomb and can’t believe how cool grandpa has suddenly become. Grandsontexts mom, sending the video along with “G-pa is way cuul!!” Eventually, someone showsthe client (aka grandpa) the video and after a very brief investigation, the culprit is iden-tified. The accounting firm acts swiftly and within its legal bounds (as any employerwould) to summarily terminate the staff member in question for causing the organizationand the client untold embarrassment and potentially bad public relations.

Seems straightforward enough, right? Not so fast. Kenneth A. Jenero, Esq., National Business Development partner for Holland & Knight's

Labor, Employment & Benefits Practice Group, leader of the practice group's Healthcare &Life Sciences Team, and co-leader of the practice group in the firm's Chicago Office, offersthis insight into the legal ramifications: “One area in which social media is rapidly emerg-ing as a major source of litigation is under the National Labor Relations Act (the "NLRA").Many employers—union and non-union alike—have been hit with unfair labor practicecharges filed by employees who were disciplined or discharged for social media commu-nications about the employer's employment policies, supervisors or business practices. In

Brad Sargent is the managing

member of The Sargent ConsultingGroup, LLC., specializing in forensicaccounting and financial investigation.He is a frequent lecturer on the topic offorensics and fraud, and is chair emer-itus of the American Board of ForensicAccounting. A member of the ICPASsince 2002, Brad also serves on theSociety’s Board of Directors.


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most cases, the communications are con-sidered by the employer to be derogatory,defamatory, disloyal or otherwise inappro-priate. Several of the cases involve the useof profanity or highly unflattering com-ments when describing the employer or itssupervisors. To the employer's great sur-prise and dismay, many of these commentsare considered ‘protected activity’ under theNLRA. And the affected employees are enti-tled to reinstatement to employment withfull back pay.”

Perhaps you’re ahead of the curve onsocial media and have instituted a progres-sive workplace social media policy. How-ever, the National Labor Review Board’s(NLRB) general counsel has stated that,"Most of the social media policies thatwe've been presented are very, very over-broad. They say you can't disparage or crit-icize the company in any way on socialmedia, and that is not true under the law."

Jenero explains that, “Examples of overlyrestrictive rules include those prohibitingthe posting or discussion of wages or bene-fits; ‘gossip’ about the company; ‘disparag-ing, ‘derogatory,’ ‘inappropriate,’ ‘harmful,’or ‘untrue’ statements about the employer

or its supervisors or managers; disrespectful,rude or offensive conduct; discussionsabout ‘company business;’ and pictures inany media which depict the company inany way.”

According to Jenero, another growingarea of concern in social media is the useof background information gathered dur-ing the hiring process. The Equal Employ-ment Opportunity Commission (EEOC) isnow focusing on employer use of socialmedia in all types of employment deci-sions. And, in fact, employers may run therisk of trampling an employee’s rights byusing social media as an investigative ormonitoring tool.

James F. Hendricks, Esq., partner at Ford& Harrison LLP, focuses on assisting man-agement with labor matters before theNLRB. He also defends employers incharges before the EEOC, the US Depart-ment of Labor and various state agencies.He puts the social media issue in theseterms: “With the explosion of social mediawebsites (Facebook, Twitter, LinkedIn, etc.),both employers and employees need to bealert to the ever-changing landscape ofwhat is and isn't allowable as jeopardizing

employment relationships. Employers maynot want employees griping or trashing thecompany about terms of employment, butthe NLRB is scrutinizing discipline byemployers for employee postings on theirindividual accounts. There have only beentwo decisions by administrative law judgeson discipline of employees for such post-ings, one against the employer and oneupholding the termination of an employee.Employers need to recognize the issues andbe aware of this government’s review ofcompany policies, rules and discipline inthe social media arena, particularly non-union employers who are not aware of theNLRB's jurisdiction.“

One thing everyone agrees on is the rapidgrowth of social media, for both personaland professional use. Social media is theplace to share your “message;” the criticalissue is how to manage that message andthe people in your organization.

Step carefully through this virtual mine-field. Consult your attorney if you have spe-cific questions and embrace the “public”face of your accounting staff; don’t ignorethis reality until it’s too late.


The Last MileA how to for advisors working with clients 12 months out from retirement.

By Mark J. Gilbert, CPA/PFS

RETIREMENT ADVISOR


A recent national survey indicated that 14 percentof US workers don’t plan to retire. Undoubtedly, therecession and weak economic recovery, coupled withfalling home values and investment account balances,has caused that number to increase since 2008. How-ever, this also means that more than 8 in 10 US work-ers still expect to leave full-time employment at sometime in their lives.

And so, with that fact in mind, I’ll share my advicefor dealing with the select number of your clientswho are less than 12 months away from retirement(individuals I like to refer to as ATRs or “About toRetire” clients).

For ATRs, that 12-months-or-less period is the lastpush to financially prepare for retirement. It’s the lastmile in the marathon, so to speak. A great finish won’tsignificantly impact everything else they’ve done up tothis point, but it will put them in the right frame ofmind for retirement. So encourage them to increasetheir savings and investment contributions, begin toscale back their lifestyle expenses where possible, andthink like a retiree.

Here are some other ways to help your ATR clients:

Update financial plans. For ATRs, the goal isto develop a plan for financial distribution. In myexperience, this type of plan is easier for clients at this

stage of life to get their hands around and to take ownership of. The projections are morerealistic and there are fewer variables outside of their control. By encouraging them todevelop this plan, you’ll be helping them better understand their finances and commit totaking control of their financial lives in retirement.

Introduce the Social Security Administration (SSA). Help your clientsunderstand whether to elect to receive benefits as early as age 62 or to defer to as late as70. The SSA website [www.ssa.gov] offers a wealth of information about computing ben-efits, elections and administrative matters. SSA personnel in local SSA offices are trainedto help ATR clients understand their options. That said, it’s best to independently com-pute a client’s projected Social Security benefit, especially if he or she is eligible for abenefit based on a spouse’s work record. Seek out a Social Security expert to help in thisarea if you need to.

Understand your client’s retirement benefit options. Clients may haveto make choices about 401(k)s, profit-sharing, defined benefits, deferred compensation,employee stock options, company stocks, “net unrealized appreciation” opportunitiesand retiree medical benefits. Recognize that conventional wisdom may dictate with-drawing all available funds as soon as possible, but that each client situation is unique

Mark Gilbert is a principal in thefirm of Reason Financial Advisors, Inc.His 25-plus years of finance and acc-ounting experience includes 13 years inpersonal financial planning. An ICPASmember since 1982, Mark currentlyserves in the IA/PFP Member ForumGroup and on the Structure & Volun-teerism Committee.


and demands a specialized approach. En-courage your clients to share as much infor-mation about their benefits as possible, anddevelop cohesive recommendations that areboth tax smart and financially responsible. Inevaluating possible alternatives, a financialdistribution plan (described above) can bevery helpful.

Don’t forget about Medicare. Ifyour ATR clients are near or at age 65, helpthem to understand the Medicare programand their costs. They should also realize thata supplemental medical insurance policy canhelp to cover those medical expenses notpaid for by Medicare.

Understand retirement stages.Keep in mind that there are multiple phasesof retirement—an early period (start of retire-ment to age 75), a middle period (age 75 to85) and a late period (beyond age 85). In theearly years of retirement there may not besignificant changes in a client’s lifestyle aslong as he or she is healthy. However, astime goes by, certain lifestyle activities mayfall by the wayside and the costs of theseactivities correspondingly will fall. That said,they may well be replaced by increasedmedical or care costs.

Change the investment mindset. Inmy opinion, ATR clients should invest theirportfolios more conservatively now that theyare in distribution mode. Certainly, it’s appro-priate for these clients to invest somewhataggressively in order to meet future inflationand tax costs. But many ATR clients have accu-mulated wealth over a period of time duringwhich they were comfortable with taking onhigher-than-average investment risks. Theymay find it difficult to dial down the level of riskjust because they’re approaching retirement.

However, the biggest risk to investing tooaggressively is that clients may need to drawdown on investment assets precisely at atime when values are down due to a weakstock market. Help your clients to under-stand that, in early retirement, it’s a betteridea to invest more conservatively. As timegoes by, it’s appropriate to invest moreaggressively because they’re investing for ashorter time horizon.

Check back with me for my spring columnin which I’ll share more advice on how tomanage the financial needs of clientsapproaching retirement.


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11INSIGHT_Winter_12_9FNLC:INSIGHT 12/14/11 12:03 PM Page 15

Your Cooperation RequiredHow will registered tax return preparer requirements impact you?

By Marty Green, Esq.

CAPITOL REPORT


Internal Revenue Service Commissioner DouglasShulman announced the Registered Tax Return Pre-parer Initiative at the beginning of 2010, with themulti-phase implementation of four elements: Pre-parer Tax Identification Numbers (PTINs), Circular230, continuing education requirements and testing.The goals of the Initiative are to enhance complianceand elevate ethical conduct amongst tax preparers.For the record, licensed CPAs must comply with thePTIN requirements, but are exempt from continuingeducation and testing requirements.

The IRS issued final regulations in September2010, requiring paid tax return preparers to obtainand use a PTIN starting with tax returns preparedafter December 31, 2010. The IRS recently releasedIRS Notice 2011-80 to provide preparers with addi-tional clarification and guidance, namely that PTINsmust be renewed on a calendar year basis via anonline PTIN application or by completing paperForm W-12. The required fee ($64.25 for 2012) mustbe paid between October 15 and January 1.

A great deal of discussion also has evolved aroundhow applicable the PTIN requirements are to non-signing preparers. Since each firm’s and non-signingpreparer’s circumstance is different, I encourage youto carefully review IRS Notices 2011-6 and 2011-80.

Simply, non-signing preparers who assist in thepreparation of substantially all or more of a tax returnor claim must register for a PTIN. However, they areexempt from the competency exam and continuing

education requirements if the individual is supervised by a Circular 230 practitioner; thesupervising Circular 230 practitioner signs the tax return or claim; the individual isemployed by the tax preparer’s CPA firm or other recognized firm; and the individual passesthe IRS-required tax compliance and suitability checks (when available).

Alternatively, the IRS also has provided for provisional PTINs to prevent disruptionof the 2012 filing season. Individuals who are not attorneys, licensed CPAs or enrolledagents and who don’t prepare or assist in the preparation of substantially all or moreof any tax return or claim for refund covered under the Form 1040 series may applyfor a provisional PTIN (the Registered Tax Preparer Exam will cover the 1040 series).Individuals who obtain a provisional PTIN may retain it until December 31, 2013, butit must be renewed annually and continually maintained.

Many of you have asked me how these new requirements relate to the 2012 CPAlicensure requirements (which I covered in the summer issue). In short, the 2012 CPAlicensure requirements are separate regulatory requirements.

Marty Green is vice president ofGovernment Relations for the IllinoisCPA Society. He previously served asexecutive assistant attorney general forIllinois Attorneys General Lisa Madiganand Jim Ryan, and as director of theGovernor's Office of Citizens Assistanceand assistant to the Governor for PublicAffairs, both under Governor JamesEdgar. A graduate of Western IllinoisUniversity and Saint Louis University LawSchool, Marty is a practicing lawyer andmember of the Illinois Bar.


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Licensed CPAs, attorneys, enrolled agents, enrolled retirementplan agents and enrolled actuaries must comply with the PTIN andsuitability requirements but are exempt from annual continuing edu-cation and competency examination requirements. The registeredtax return preparer requirements don’t change the way the IRS treatsregistered CPAs; Circular 230 has always required CPAs who prac-tice before the IRS to be licensed CPAs, and only licensed CPAs areconsidered “CPAs” by the IRS. Registered CPAs are treated as regis-tered tax return preparers with limited practice rights, and all testing,compliance checks and annual continuing education requirementsmust be satisfied.

The IRS is still working on issues relating to fingerprinting require-ments, which currently apply to provisional PTIN holders and regis-tered tax return preparers. At this time, attorneys, licensed CPAs andenrolled agents are exempt from the requirements.

The AICPA and other state CPA societies continue to work togetherto provide the IRS with comments and guidance on the implementa-tion of the Registered Tax Return Preparer Registration Initiative. TheIllinois CPA Society has added a dedicated page on the subject,which you can access at www.icpas.org/PTIN. This page includesFAQs on Requirements for Tax Return Preparers, articles from theICPAS Practice & Procedures Committee, and PTIN News.

I suggest that you review the IRS requirements and FAQs in theirentirety. In the meantime, we will continue working with the AICPA,fellow state societies and the IRS to ensure the CPA credential is rec-ognized throughout the process and to provide you with the mostcurrent resources available.


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Modern portfolio theory espouses the need to manage volatility through investmentdiversification. Traditionally, investors carried this out by investing in companies of vari-ous sizes. The thinking was that if large- and mid-cap stocks were down, small-cap stockswould go up. Over the past few years, however, an overall market downturn has seenincreased correlation in these asset classes.

“Many years ago, diversification was typically sought through a combination of large-cap, mid-cap and small-cap US equity investments, developed international equity,emerging market equity, fixed income and real estate,” explains Scott Warnock, co-founder of financial advisory team Aspinwall Executive Consulting. “Unfortunately, withthe exception of fixed income, all of those asset classes had five-year correlations to thelarge-cap US stock market north of 75 percent.”

In other words, portfolio diversification through traditional assets was no longer work-ing. Investors were no longer experiencing a narrow, managed range of return outcomes,and instead were exposed to the very volatility they were looking to avoid.

“It was at this time that the majority of investment professionals realized that the oldmeat-and-potatoes asset classes such as stocks, bonds and real estate were too closelycorrelated with one another to provide meaningful benefits of diversification,” saysAlexey Bulankov, CFP, with McCarthy Asset Management. “Like a couple that have beenmarried a long time, they start to resemble each other too much in many respects.”

As a result of this increased volatility within traditional portfolios, alternative invest-ments made their way from the margins to the mainstream. “From 2002 to 2007, it wasrelatively easy to raise money from investors and performance was good,” recalls RonenSchwartzman, founder and CEO of Ten Capital Advisors LLC. Back then, he says, thenumber of hedge funds reached as high as 10,000.

And then, in 2008, everything plummeted. The hedge fund industry had its worst per-formance year, with the HFRI (Hedge Fund Research Indices) index losing 19 percent.“Many hedge funds lost money and therefore failed to provide hedges or absolute returnsto their clients,” Schwartzman explains. “Fraud events such as Madoff and Stanford, as

INVESTING

In With the OldIncreased transparency and decreased investor qualifications are just some of the factors fueling the return to alternative investments.

By Carolyn Tang Kmet





well as the managers that gated their fundsand prevented redemptions or side-pock-eted investments, didn’t help the overallalternative space, and as a result manyhedge funds were closed.”

Today, however, investor interest in alter-native investments (hedge funds, venturecapital, commodities, managed futures, cur-rencies and even wine) is again on the rise.

John T. Hague is a partner with McGladreyand Pullen LLP. He is also the firm’s nationaldirector of the Alternative Investments andBrokerage Group. He says that alternativeinvestments often provide investors withaccess to new or different markets, strategiesand investment types, diversification ofinvestments to manage market risks, higherreturns, reduced volatility and geographicexpansion. “The markets have been quitechoppy and unpredictable recently, andinvestors are seeking stable returns withlower market risks,” he explains.

“I think what’s driving this evolution is adesire to find something newer and betterthan traditional stocks, bonds, CDs andtraded REITs,” remarks Adam Koos, CFP,founder and president of Libertas WealthManagement Group. “Investors are sick ofmaking and losing their hard-earnedmoney. In the face of what could turn intoa brand new recession, they want safety indiversification and yield, and somethingthat doesn’t correlate with the traditionalinvestments they already own.”

Schwartzman describes a recent trend:Investing in smaller, emerging managers.“The prop desks at the large banks trainedsome of the best hedge fund managers,” heexplains. “Now that the banks are closingtheir prop desks as they are not allowed totrade any longer, more talented investorsare leaving to start their own funds, andsome will join existing hedge funds.”

Schwartzman also believes these emerg-ing managers are being lured into the alter-native investment market by attractive 2-percent management fees and 20-percentperformance fees. (He notes that these num-bers are general; some managers chargemore while others charge less.)

Demand for alternative investments cer-tainly is growing, “We’ve started to see moreretail alternative investment products hit themarket in the form of mutual funds andETFs,” says Koos. He notes that the downsideto this, however, is the ease with which lesssophisticated investors can enter the market.Traditionally, alternative investments wereonly accessible to high net-worth individualsand institutional investors with large sums of

money due to minimum capital contributionrequirements and government regulations.Since minimum requirements have dropped,investors who have $250,000 liquid networth can now enter the arena.

Additionally, different types of institu-tional investor are going the alternativeroute. “Endowments, foundations, trustsand not-for-profit organizations have eitherentered or increased their investment allo-cations,” Hague points out. “Once taboofor these entities, there’s a perception thatthe industry is now professionally managed,regulated and socially acceptable.”

Furthermore, increased transparency inthe alternative investment industry haspaved the way for increased investment dol-lars. Several years ago investment advisorstended not to display or disclose their propri-ety trading strategies. “However, increasedregulatory scrutiny, the onset of more com-petition and the desire to raise investmentcapital has led to more transparency thanever before,” Warnock reports. “Many man-agers, who in the past operated as a ‘blackbox,’ providing no insight into the portfolio’smake-up, are now providing many moredetails to potential investors, and due dili-gence teams are reviewing their strategies fornew investments.”

Transparency is certainly a key factor forinvestors exercising their fiduciary duties,and as most alternative asset managers areenhancing their reporting and valuationprocesses, documents such as the Interna-tional Private Equity and Venture Capital(IPEV) Valuation Guidelines are on the rise.

“For example, best practice is evolvingfor alternative asset managers to use anexperienced third-party valuation expert tovalidate valuation estimates and therebyenhance transparency to investors,” saysDavid Larsen, managing director in theAlternative Asset Advisory practice of Duff& Phelps, and a resident in the firm’s SanFrancisco office.

Warnock adds that the institutionalizationof alternative managers has driven trans-parency even further. “Many alternativeinvestment managers now have extremelywell-developed back offices, risk manage-ment personnel, compliance departmentsand more,” he explains. As a result, commu-nication with investors has increased, andadvisors and due diligence officers havebetter access to portfolio managers thanever before.

“Certainly, the combination of moreproduct offerings, fee compression, lowerinvestor qualifications, the institutionaliza-tion of alternative managers and more

transparency should lead to growth of thebroader alternative investment industry,”Warnock comments.

However, David Nanigian, PhD, an assis-tant professor of investments at The Ameri-can College in Bryn Mawr, Pa., feels it’s dif-ficult to determine transparency’s ultimateimpact on the growth of the alternativeinvestment market. “On the one hand, anincrease in transparency may positivelyimpact growth due to the alleviation of infor-mational asymmetries regarding diversifica-tion of portfolio holdings and the funds’selectivity in capital allocation,” he states.“On the other hand, it may negativelyimpact growth due to ‘copycatting’ amongstindividual investors.”

Schwartzman understands the need fortransparency, but says it should be taken incontext. “If a long/short equity manager isinvested in 60 different securities, I don’tneed to know all of them; I care about his top5 or 10 positions—the ones that drive theperformance for the fund.”

Schwartzman also points out that if youhave enough capital, then having a sepa-rately managed account “gives you 100-per-cent transparency and the ability to fire themanager whenever you want.”

Warnock warns that while many goodproducts will be created, there are many oth-ers that are sure to miss the mark. Further,alternative investments tend to be illiquid,which will cause some investors to shy away.“Liquidity is a major concern with alterna-tives, so investors need to ensure that the liq-uidity features of a specific product matchestheir needs,” says Warnock.

On top of that, “Many investors had nastysurprises in the financial crisis when manyfunds exercised their rather esoteric author-ity to suspend redemption requests or onlypartially honor them,” says Dr. Nanigian.

In light of such outcomes, Nanigian urgesinvestors to exercise due diligence whenconsidering alternative investments. “Youshould bear in mind that the high reportedaverage returns should be taken with agrain of salt due to voluntary reporting stan-dards,” he says.

Warnock boils it down: “Alternativeinvestments present an opportunity forinvestors to diversify out of traditionalequity holdings. However, investors mustbe careful to understand what they areselecting as alternative exposure in portfo-lios ensure the product provides the bene-fits common among alternative invest-ments, and is not another traditional offer-ing in disguise.”


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It’s the age-old conundrum of the shoemaker’s children having no shoes. Many small tomidsized accounting firms dispense excellent advice to their clients regarding appropriaterisk management. Yet, when pressed, a good number will admit they haven’t spent thesame amount of time and energy applying risk management principles to their own firms.

Joe Wolfe, assistant vice president of risk control for CNA, the firm that has underwrit-ten the AICPA’s professional liability insurance program for more than 17 years, sees riskmanagement as always important, but particularly so in tough economic times. “Profes-sional liability within the accounting industry is a cyclical business. When the economydeteriorates, malpractice claims usually rise,” he explains.

While good risk management covers the gamut, Charlie Cullinan sees two major areasof current concern due to the faltering economy and newer Public Company AccountingOversight Board (PCAOB) standards. A professor of accounting at Bryant University, Smith-field, RI, Cullinan cites client portfolio decisions and internal process as key right now.

“In 2004 and 2005 we saw accounting firms shedding a lot of clients due to Sarbanes-Oxley [SOX], mainly due to resource constraints to reduce risk exposure. Now the econ-omy is bad and firms are again taking on larger, more profitable clients who come withmore than their fair share of risk. These firms are hungry in a lean economy but not nec-essarily wise,” he explains.

Gary Eisen’s Frankfort, Ill. firm, Kolodziej, Eisen & Fey, was one of the many that shedclients after SOX passed. “SOX caused us to stop doing audits. We had small clients andsmall prices, not big clients and big prices, so the additional insurance cost was not worthit for our firm.”

Eisen says he still gets calls for audit work but, “It’s becoming hard to even find peopleto refer clients to because so many smaller firms have gotten out of the audit business sim-ply because it is an unaffordable risk.”

In terms of internal process, Cullinan cites engagement quality reviews as key. “Anengagement quality review partner is supposed to be signing off on audits. This PCAOBstandard took effect for all fiscal years after December 15, 2009. You also need that qual-ity review partner as a safety measure to protect the firm.”

Even if a firm reviews its portfolio of clients and ensures appropriate checks through-out, Cullinan stresses it’s simply not enough. “If your employees are critical thinkers ratherthan checklist lovers, your firm will be better off. Checklist lovers will miss what isn’tspelled out for them. Critical thinkers will usually catch a red flag the first time around.”

When most CPAs think risk management, they think audit. However, CNA’s Ellen Van-DeLaarschot, a risk control director, says the assumption that most accounting claimsalleging failure to detect fraud arise from audit engagements just isn’t accurate. CNA’s2010 claims data shows that about half of such claims originated from audit engage-ments, while the remaining arose from accounting, compilation, review tax and consult-ing engagements.

“We don’t just look at frequency,” says Wolfe. “We also look at the severity of the claims.Historically the tax area has produced the most claims. Audits, however, have produced themost severe claims, which are costly to litigate and settle. In an economy such as this one,auditors need to be really, really careful because occurrences like bond defaults and under-funded pension plans become more commonplace and can lead to claims from bondhold-ers and pension plan beneficiaries. There’s more to watch out for.” 8

RISK

Take Your Own MedicineDespite the fact that CPA firms advise clients on risk management, many don’t take their own recommendations to heart.

By Kristine Blenkhorn Rodriguez


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Many accounting firms are likely to experience push back fromclients if the report includes a paragraph about the entity’s ability tocontinue as a going concern, says VanDeLaarschot. “Clients don’twant issues with loans or debt covenants, which may affect theirability to obtain financing or issue bonds if lenders and bondingcompanies see the going concern paragraph in the report. But we tellour policyholders, ‘If you think you need to include it, include it,’”she explains.

“Many firms think they can’t be sued if they don’t include the goingconcern paragraph,” Wolfe adds. “But even in a compilation, there isguidance under SSARS to consider the issue and include this if neces-sary. There likely are third-party users who will claim reliance on thefinancial statements. So, this is a consideration in compilations as wellas audits and reviews.”

Often, it’s the basics that trip up accounting firms. “The biggest issuethat comes up over and over again is inadequate documentation ofclient communication,” says Wolfe. “Any time a CPA engages in com-munication with a client it needs to be documented in writing. Even ifit’s just a quick phone call, you need to get down the substance of theconversation and in sufficient detail so that a disinterested third partycan decipher it.”

Engagement letters are another area of lapse. “A lot of CPAs stilldon’t use them,” says VanDeLaarschot. “Or they’re too general, so thescope of services is unclear and they run into trouble down the road.”

As technology changes the way many professional services firms dobusiness, it should also change their risk management practices. Cul-linan references an extreme example, the resignation of BDO Limited(the Hong Kong-based affiliate of BDO International) as auditor ofShanghai-based China-Biotics in June 2011. BDO cited irregularitiesthat were likely “illegal acts,” among them a suspected fake bankwebsite. “The good news is the auditor wasn’t fooled,” says Cullinan.“But 20 years ago this wouldn’t have been an issue. The web hasmade it all the more complicated.”

Also as a result of changes in technology, Wolfe sees more firmsentering the cloud-computing arena. “Most of them read the articlesabout increased flexibility and applications at your fingertips and theyjump.” Which is fine, he says, as long as it’s an educated jump. “Makesure an attorney looks at the agreement before you sign off,” headvises. “If the vendor you contract with gets bought out, who willmaintain your firm’s data on that server? Most agreements includeindemnification and ‘hold-harmless’ clauses to shift the vendor’s liabil-ity, so be careful what you sign.”

Online client portals are becoming de rigueur and are another areafor caution, says Wolfe. “Many clients don’t sign the portal agreement,which makes it hard to enforce the terms and conditions of use.” Thatdoesn’t bode well for the accounting firm, he stresses. If you have inter-national clients, it muddies the waters even more due to varying pri-vacy and security laws around the globe.

As with all things in life, preparation is the key. “Ensure there‘sadequate supervision of staff, as well as adequate training. And putsome stopgap measures in place,” Wolfe advises. “We see most mal-practice claims stem from tax season. A little risk management over-sight goes a long way. We see it every day.

“Risk management is a cultural thing, even though most firm own-ers don’t see it that way,” Cullinan adds. “We’re seeing more from thePCAOB that strongly emphasizes a firm’s culture and how partners arecompensated. It needs to be embedded in everyday operations.”



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1 2 3 4 56 7 8 9 10 11 12

1 Please consult your tax advisor for more information.2 www.disabillitycanhappen.org/chances_disability/causes.asp

Underwritten by: Hartford Life Insurance Company, Simsbury, CT 06089. The Hartford® is The Hartford Financial Services Group, Inc., and its subsidiaries, including issuing company Hartford Life Insurance Company. All benefits are subject to the terms and conditions of the policy. Policies underwritten by Hartford Life Insurance Company detail exclusions, limitations, reduction of benefits and terms under which the policies may be continued in force or discontinued. d/b/a in CA Seabury & Smith Insurance Program Management Group Policy Form SRP-1311 A(5066) AR Ins. Lic. #245544, CA Ins. Lic. #0633005 50830 ©Seabury & Smith, Inc. 2011

5Real-Life Illnesses & Injuries That Can Stop Your Income

You’re not immune from the financial

impacts of a disability just because you

have a “desk job.”

Take a look at five common medical

conditions that are already preventing

other professionals from earning

an income2:

1. Cancer

2. Back injuries

3. Diabetes

4. Heart attacks, heart disease

and stroke

5. Joint, muscle and connective

tissue diseases

Your income is too important to leave unprotected. Take a

closer look at the ICPAS-sponsored Disability Income Plan today.

How long would your savings last

if your paychecks stopped tomorrow? ?

Your income means more than the numbers written on your paycheck. That’s because your financialfuture is generally based on your ability to earn an income.

But what if a serious car accident led to back injuries? Or your doctor diagnoses cancer and prescribes an aggressive course of radiation and chemotherapy? Or the sudden headache is really a stroke that leaves you unable to work as a financial professional?

They’re all real-life scenarios. And they could easilymean the end of your ability to earn a paycheck as a financial professional.

Without a steady income, how long would your family be able to pay rent or take care of the mortgage?What about car payments? Credit card bills? Utilities like electricity and the phone? What happens to yourchildren’s college education?

Those everyday expenses don’t disappear just because your paycheck stops.

That’s why ICPAS sponsors the Group Disability Income Insurance Plan. Unlike disability coverage offered through an employer or counted as a “businessexpense” if you own your own firm, benefits through this special program for ICPAS members are generallypaid tax-free.1

Plus, the plan can deliver up to $10,000.00 inbenefits every month if you can’t work as a financialprofessional. (Many other disability plans only paybenefits if you can’t work in ANY job.) Think of it asICPAS’s way of helping you protect your earning poweras a specially trained financial professional.

Ready to find out more about the ICPAS-sponsored Group Disability Plan?

Call Toll-Free 1-800-503-9230 or visit us online at: www.personal-plans.com/ICPAS



Imagine this: You own a boutique CPA firm and decide to clean up the books a little forone of your best clients, who is going through a divorce. So you run an adjustment that addsa couple of hundred thousand to the client’s earnings for the year. Nothing wrong with that,right? Who doesn’t like a little extra money? In this case, your client. Your diligent house-keeping just added an additional $200,000 to his earnings, and now his legal team has tobattle the judge to prove it isn’t actual income.

Oops. Here’s what should have happened: You should have told the client to check with his

attorney before you touched any of the books. The adjustment in this situation could prob-ably have waited another year or so.

“Accountants can get into trouble when they go into unchartered territory, or areas thatare specialized niches,” explains Christiana Zouzias, CPA, a forensic accountant and litiga-tion specialist who is the principal of her own Chicago-based boutique practice, Zouzias &Zouzias Inc.

For accountants in smaller practices without in-house counsel, consulting attorneys arecrucial, she says. Consider the seemingly benign example of negotiating a lease. It may seemstraightforward enough to run the numbers and read the terms—you are a CPA after all. Butyou’re not an attorney, which means you may miss some pretty important details.

“Landlords, especially those of a larger building, will put in the lease that they can moveclients at any time at the landlords’ cost. An accountant might say okay, that’s fine as longas the landlord is paying. But a lawyer would argue that this is a qualitative factor. You mighthave an office overlooking trees right now, but with these terms the landlord could moveyou to an office overlooking a parking lot,” Zouzias explains.

Then there’s every CPA’s worst nightmare: Being censured or barred from practice. “The regulatory environment CPAs are currently operating within is very technical,”

says Carlton Marcyan, CPA/CFA, an attorney at Lake Forest, Ill.-based Schiller DuCanto& Fleck LLP. “In many instances the accountant doesn’t even realize that he or she issubject to regulation.”

LIABILITY

The A+ TeamWhen accountants and attorneys join forces, clients feel the service difference.

By Christine Bockelman


Let’s say your firm doesn’t deal with pub-lic companies. It might be safe to assume,then, that you wouldn’t have to deal with thePublic Company Accounting OversightBoard (PCAOB). Wrong again.

“If your client is a broker-dealer, then you,his accountant, may certainly be subject tothe PCAOB,” Marcyan explains.

To avoid getting into trouble, Marcyan rec-ommends having good legal counsel contin-uously monitor cases and readily at hand toclue you in on new rules and regulations.“You need to have legal counsel to remindyou and your firm of potential risk and howto avoid it,” he says.

Consider your own estate plan. Have youthought about succession? Are you going topass the business, most likely the source ofyour net worth, onto your children whenthe time comes to retire? What if one ofthem doesn’t want to be involved in thefirm? How do you divide it up? What aboutyour partners?

“You get the very basics of successionplanning in your accounting classes andfrom studying for the CPA Exam, but it’s def-initely a specialized niche,” Zouzias exp-lains. “As a CPA, you want to be sure youhave picked up the phone and talked to anestate-planning attorney so you know aboutany possible complications.”

And that’s just one example. Small firmsand sole practitioners also have to face thelegalities of payroll taxes, hiring, and anonslaught of other key areas.

“Accountants tend to get so bogged downin the numbers that they don’t sit down toform a plan for themselves,” says Edward J.Schoen, Jr., PC, CPA and attorney, and thecurrent president of the Illinois Chapter of theAmerican Association of Attorneys/CPAs.“It’s a huge problem if you pass away, thereis a divorce, or anytime you have a businesswith someone else.”

Planning ahead and having on-call legalcounsel has great benefits for the overallhealth of your practice. “It’s usually a badidea to wait until the last minute to go to thedoctor with something that’s bothering you,”says Marcyan. “Suddenly, your doctor couldsend you to hospital where you find out thelittle thing that was bothering you is some-thing much more serious. These days inmedicine it’s about preventative care. Thesame is true for accountants. Stay healthy bydoing the right things in the beginning.Maybe you don’t need a lawyer today, butyou might need one soon.”

It’s better to already know a lawyer youcan trust than to have to scramble to findone—not only for your own legal needs, butalso for those of your clients. If one of themasks you for a legal recommendation, it’sgoing to look rather unprofessional if youcan’t suggest anyone.

“Having a list of referrals for your clientscan help to build your net worth,” Schoenexplains. “They will refer clients to you, youwill refer clients to them. It’s very beneficial.Clients call me all the time, saying theyhave a legal issue like divorce. Do I knowanyone? Yes, I know someone who does it.You lose some credibility as a professionalif you can’t name someone your clientcould call for help, or at least point them inthe direction of someone you trust.”

Start off with legal publications or contactthe Illinois Chapter of the American Associa-tion of Attorneys/CPAs, which has a listservconnected to all its members for easy accessto various specialists. Just be sure to narrowdown your search to attorneys with expertisethat fits your particular needs.

“In accounting there are lots of specialtieslike tax, forensics and auditing. The same istrue with attorneys,” Marcyan explains. “Andjust like accounting, you are always better offgoing to a lawyer with specific expertise.”

This is where networking comes in. If theattorney you regularly consult with doesn’tspecialize in an area where you need someadvice, say divorce, ask whom he or shewould recommend. Attend professionalassociation events as an easy means toaccess the social and professional circlesnecessary. Or access the Litigation ServicesConsulting section of the The NETWORK[www.icpas.org], a group of Illinois CPASociety members who have agreed to sharetheir expertise with fellow Society members.

“It’s always better to have a recommenda-tion from another accountant or someoneyou’ve met at a conference or networkingevent than to blindly pick someone out of thephone book,” says Schoen. Once you knowa few good attorneys, they will know a fewgood attorneys, and so on and so on.

Putting it all in bottom-line terms, Zouziasexplains that, “It would be such a shame tobe a boutique firm, providing white-gloveservice to your clients, holding their handsand spending a lot of time with them, andthen slip up because you didn’t consult anattorney on something you thought youcould handle yourself.”




When executives at Chicago-based accountingfirm Frost, Ruttenberg and Rothblatt, P.C. decided toundergo an energy audit, the end result was a 10-percent overall savings on the firm’s energy bill.

And while some small to midsized accountingfirms may feel that 10 percent isn’t worth the initialinvestment of hard-to-find time and money, savvyexecutives know that the ability to cut operationalcosts is absolutely crucial to success today. “Any-where you can reduce costs and still maintain a cer-tain level of service is extremely important in today’seconomy,” explains Jeff Singer, officer and directorwith Frost, Ruttenberg and Rothblatt.

As a firm that rents its office space, as many smalland midsized firms do, Frost, Ruttenberg and Roth-blatt is limited in what it can do to control energycosts from an infrastructure and equipment perspec-tive. However, Ira Holtzman, principal with LowerElectric, an energy consulting firm in Northbrook,Ill., points out that, as a deregulated state for electricand gas supply, Illinois companies are ideally posi-tioned to take advantage of competitive utility rates.

“We provide our clients with the necessary knowl-edge to choose the lowest-cost, highest-quality utility supplier possible,” Holtzmanexplains. “Companies have the ability to choose an alternate provider.”

Natural gas was deregulated in the 1980s and electricity in 1999. Electric rates, how-ever, were frozen until January 2007. After the freeze expired, rates increased substan-tially. This change in regulation also inspired the growth of companies like Lower Elec-tric, which represents retail energy suppliers of natural gas and electricity to offer com-petitive pricing. “If a company is with ComEd and paying 8 cents per kWh, we offer anopportunity for them to lock into a rate that will save them 10 to 30 percent,” Holtzmanexplains. “We shop against that 8 cents rate. One of the easiest things a company can doto save energy costs is pay less.”

Opportunities to save on energy go far beyond an energy audit, however. Peoples GasNatural Gas Savings Program, for example, provides business customers with the incen-tive to make energy-efficient improvements.

Through a partnership with ComEd, small businesses that use less than 60,000 thermsof natural gas and less than 100 kilowatts of electricity annually are eligible to receive: Freeonsite energy assessments, along with free installation of compact fluorescent light bulbs,efficient faucet aerators and showerheads, and vending machine controls, as applicable;financial assistance (up to 70 percent of cost) for steam trap repairs/replacements, boilertune-ups, programmable thermostats and furnace tune-ups; and rebates for the purchaseand installation of new boilers, furnaces, condensing unit heaters and water heaters.

“Using energy efficiency to produce a kWh or a therm is much cheaper than buildingnew production,” notes Paige Finnegan, senior program manager for the Peoples Gas &North Shore Gas Natural Gas Savings Program, implemented by Franklin Energy Services

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LLC. To this end, the program offers a small-business energy assess-ment, during which, “We go in and look at the low-hanging fruit—those low-cost strategies that can help to reduce energy use, such asbest practices for lighting or a furnace tune-up,” says Finnegan.“Those usually provide great return on investment in as little as 6 to18 months,” she says, “which is really compelling.” Higher-levelfacility assessments also are offered. These take major infrastructurechanges such as upgrades to windows and boilers into considerationand usually have much longer paybacks (5-plus years).

Awareness is the first step, says Finnegan. “Companies need assis-tance in thinking about where energy is being used and ways tomake changes without affecting employee productivity.”

Behavior changes, in fact, are one of the most basic ways toreduce energy costs. Peoples Gas Natural Gas Savings Programoffers these tips:

Optimize power by turning things off. For every 1,000kWh that is saved by turning things off, a company can save $100on its annual utility bill, assuming average electricity costs of 10cents per kWh. Lights, computers and other office equipment (suchas copy and fax machines) tend to have the biggest impacts.

Significant energy savings also can be achieved by simply verifyingthat power management settings are enabled on individual computersand monitors, forcing them to enter sleep mode after a specified periodof inactivity. Power management settings can cut a computer’s elec-tricity use roughly in half, saving from $25 to $75 annually per com-puter. In the case of equipment that can’t be turned off, companiesshould ensure equipment is set to the lowest energy-use level possible.

Furthermore, leaving items such as coffee pots, computer speak-ers and radios plugged in when not in use can make up roughly 10percent of an average electricity bill. Power strips are an easy way toswitch off all these energy wasters at the end of the day.

Beware of energy hogs. Looking beyond the cube, somepermanent fixtures of the office landscape can zap your energy sup-ply in a hurry. For instance, refrigerated vending machines typicallyoperate 24/7, using 2,500 to 4,400 kWh a year and adding to cool-ing loads in the spaces they occupy. Timers or occupancy sensorscan translate into significant savings since they allow the machinesto turn on only when a customer is present or when the compressorhas to run to maintain the product at the desired temperature.

What’s more, the average office water cooler consumes about 800kWh a year. Because much of this energy is from standby losses, asimple method of cutting energy waste is to attach a timer. Program-ming an office water cooler to operate only for 10 hours a day, 5 daysa week, can significantly reduce waste.

Monitor heating/cooling systems. Keep your thermostatsettings consistent during work hours—68 degrees in the winter and78 degrees in the summer. Replace or clean air filters, ducts andvents regularly to prevent your heating and cooling systems fromworking harder than they need to. Probably the simplest policy:Encourage employees to dress for the weather; add or remove layersbefore reaching for the thermostat.

Control the flow. You can safely lower hot water temperaturesin restrooms and employee lounges to, say, 110 to 120 degrees tosave on energy costs. Also, if you’re aware of the drip, drip, drip ofa leaky water fixture or toilet, make fixing the problem a priority.Inaction can waste gallons of water over a very short period.




There’s no denying that social media is the waveof the future, but the terms “tweeting” and “friend-ing” still make most CPAs cringe. From buildingyour client base to finding your newest hot hire,however, social media is a necessity for businessesin all walks of life—including accounting.

The daunting part isn’t understanding socialmedia’s indispensability in a business context; it’sunderstanding how you, specifically, as a CPA,should use it to best advantage. True enough, thereare millions of people using Twitter, Facebook andLinkedIn (and the numbers are rapidly growing), buthow do you connect with them? And how do youtransition your followers, friends and connectionsinto clients?

Content is the key to every social media campaign.Your tweets, your Facebook posts, your LinkedInpage, your photos and links, all will establish your“brand” and indirectly market your services. If yourfirm specializes in small-business accounting, forexample, post links to new tax exemptions for small-

business owners. If your firm focuses on nonprofits, showcase nonprofitorganizations on your Facebook and LinkedIn pages and post snippetsof advice to this market on Twitter. Demonstrate what you do and whyyou’re good at it.

Once you’ve established a strong social media presence, the nextstep is to interact with potential clients. Twitter allows you to performa keyword search, which will help you to locate users who share com-mon interests. During the first half of April, for example, everyone isposting about taxes. Run a search and you may find tweets such as,“Trying to figure out which meals can be considered tax deductions”or “Thinking I’ll need to file an extension on my taxes.” You canrespond, perhaps with, “If you’re self-employed, you can deduct anymeal where you took someone out and spoke about business” and “Ifyou owe money, don’t forget you’ll need to submit a payment.” Con-nect with neighboring businesses and your local chamber of com-merce on Facebook and LinkedIn. And connect with your existingclients and post to their walls so their friends see your input.

Sound like a lot of work? The good news is you don’t have to spendall day every day making your social media presence known. The mosttime-consuming part is actually setting up Twitter, Facebook andLinkedIn accounts. Once you have those, you need to dedicate only anhour or less a day to social media. Make it a part of your routine. Hoponline first thing in the morning or sign in during your lunch hour. Posta few items, interact with one or two people and find a new page to

SOCIAL MEDIA

Follow, Friend, Connect How to grow your firm in the social media age.

By Dana Kaye

Eight Tips for Social Media Success1. Observe first. Connect with other accountingfirms, etc., and see which posts pique your interest.

2. Be authentic. Don’t be afraid to use your ownvoice. And don’t use posts as sales pitches.

3. Have a conversation. Encourage interactionand discourse among your connections and followers.

4. Post at irregular hours. If you only post duringbusiness hours, you’ll only reach half your audience.

5. Use dinner party et iquette. Avoid talkingabout controversial topics such as religion and politics.

6. Focus. There should be a reason for each itemyou post. Avoid comments like “Happy Tuesday!”

7. Don’t worry about the terminology. If youdon’t know how to use hashtags, @ replies andphoto tagging, then simply don’t use them.

8. Mix it up. Post photos, link to articles and sug-gest other people to follow. If you want people torevisit your page, you have to keep it fresh.


Visit the ICPAS on Facebook, Twitter, LinkedIn and YouTube today!

“like.” That’s all it takes. You can also use websites like HootSuite(hootsuite.com) and software like TweetDeck (tweetdeck.com) toupdate your social media sites from one location, schedule postsahead of time, and monitor your searches, mentions and messages.

Once people find you or your firm on Facebook, LinkedIn or Twit-ter, they won’t necessarily call you for a consultation, but they’ll verylikely do some additional research. References and reviews play a keyrole in a person’s decision to hire you, so make sure your online plat-forms boast positive feedback.

There are dozens of review sites, but the primary ones are Yelp.com,LinkedIn, and the reviews tab on your Facebook page. The easiest wayto garner more reviews across these platforms is to offer your existingclients incentives to write a review of your services. You can offer afree consultation or a certain percentage off for every review they post,for example. If your clients have LinkedIn profiles or Yelp pages, youcan offer them a review swap. You could also host a contest; say, eachreview represents one entry to win tickets to a sporting event, a restau-rant gift certificate, or a complimentary tax return. Most people won’ttake time out of their busy schedules to write an online review unlessthey have an incentive to do so.

By regularly posting content to Twitter and Facebook, keeping yourLinkedIn content up-to-date, interacting with your online following, andbuilding a base of positive reviews, you will expand your social mediafootprint. People will find you with relative ease, your name recognitionwill increase, and you’ll reinforce your firm’s positive brand.

Featuring Innovative Sessions on: Innovating without Breaking the BankThe Latest Technology Trends and IssuesFinancial Reporting Changes Impacting Privately-Held CompaniesManaging Fraud RisksCash Management and Access to FinancingBecoming a Strategic Resource for your Company

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For more information or to register, call 800.993.0393 or visit www.CCFLinfo.org.

Reach out to NEW CLIENTS by listing your firm on the Illinois CPA Society’s FIND A CPA Directory.

Listing in this directory is FREE and abenefit only available to Illinois CPASociety members.

FIND A CPA DirectoryA benefit of your Illinois CPA Society Membership

Add your firm listing, visit www.icpas.org/CPAdirectory



2020VISION

Small accounting practices are facing a world

of change. Are you thinking ahead? By Derrick Lilly




“How we adapt and change will determinewhether or not we succeed in the future.”



A New LandscapeIf one word could sum up the forum participants’ outlook to dateit would be “optimistic.” Despite current headwinds, there’s littleto no doubt that small firms will be standing strong in 2020. Oneparticipant even predicted that, “Midsized firms will get squeezedout, resulting in more business for both small and large firms.” Infact, most participants expect their firms to either exist as they areor be more successful.

Anticipating marketplace improvements, forum participantspredicted that aggressive merger and acquisition activity would bethe key to growth for some, and the key to survival for others.

In either case, the landscape for small firms is bound to change,and those that remain dedicated to their small stature and mission,while also being committed to evolving with the times, will be ina good position to thrive. To do so, the successful small firm oftomorrow will need to think like a featherweight fighter: Be nim-ble, lean, adaptable and increasingly specialized.

“How we adapt and change will determine whether or not wesucceed in the future,” stresses Thomas M. McGreal, CPA, ofMcGreal & Company PC.

For starters, the mentality that small firms can do all things for allclients will become outdated. In fact, forum participants continuallystated that the unrelenting pace of change, glut of regulations andcomplexity of standards would force small firms to reassess theirabilities and services, and to move towards a niche model.

“You can no longer be all things to all people,” says MichaelRadencich, CPA/MST, of Trimarco, Radencich, Schwartz & MrazekLLC. “Small firms and sole practitioners will have to self-assess andfocus on what they do best. When you’re trying to do too muchyou become a jack-of-all-trades but a master of none.”

Simply put, “boutique” is replacing “big box,” and putting thisconcept into practice is how small firms are expected to outshinelarger firms and avoid competition over commoditized transac-tional services. Overall, participants predicted that focusing coreservices on top areas such as wealth management, M&As andforensics will prove most successful. Other high-ranking areasinclude business valuation, IT security consulting, litigation, regu-latory compliance and specialized tax planning.

A shift to “niche” may leave some clients wanting or needingmore, however.

“Our number one responsibility is to service our clients. Sinceall firms have limitations, it’s important to build a referral networkof highly regarded professionals inside as well as outside theaccounting profession to share expertise, ideas and business,”says Radencich.

The key word here is “sharing.” That doesn’t mean client-poaching, but rather connecting with the right partners to giveclients access to the breadth of services they may be demanding.

Ultimately, participants felt that a robust referral network wouldincrease value in their clients’ eyes and drive growth now and in theyears to come. Think: “The more you know, the more you grow.”

Teaming With TechnologyTechnology will continue to be another game-changer for smallpractices. As one participant emphasized, “Virtual is going to be big-ger than big.” And the pace of change shows no sign of slowing.

With the accelerating adoption of technologies like interactivewebsites, client portals, social media, cloud-computing, paperlessdocument management, video & teleconferencing, and othermobile solutions, small practices are realizing that fewer peoplecan do more work in less time.

In turn, we’re witnessing a departure from traditional hourlybilling. As small practices rapidly increase their efficiencies, “valuebilling” or fixed-price project billing is growing at an equal pace.According to forum participants moving in this direction, suchbilling models will become staples in small firm revenue growth.

Paul Ziliak, CPA, partner at xkzero, suggests that fixed-priceproject fees allow clients the comfort of knowing exactly whatthey are buying, how much they are paying for it, and if or whenthey’ll have to pay more. Additionally, firms can generate morerevenue; client retention should increase as they no longer fallvictim to “billing fatigue”; and staff will be more empowered andmotivated to perform.

“Our fixed-price model has been an undeniable catalyst forgrowth, and any small firm can implement these kinds of changesif they commit to a shift in thinking,” says Ziliak, whose ERP solu-tions consulting practice has seen consistent increases in rev-enues, profits, and staff and client retention since abandoning tra-ditional timesheets.

As the calendar year rolls over to 2012 and new economic challenges continue to surface, itʼs easy to get caught upin the here and now—and, for some, even Mayan doomsday prophecies. But if December 21, 2012 turns out to be justanother day of business-as-usual, a strategy for your small firmʼs future will become something of an imperative, albeit anoften overlooked one.

Since October 2010, the Illinois CPA Societyʼs Strategic Planning Committee has hosted a number of small practiceforums around the state. The objective of these Future of the Small Firm in 2020 forums is to gain invaluable insight intothe trends and challenges most likely to impact small firm partners and sole practitioners now and over the next 5 to 10years. Additionally, the forums help to identify the competencies and resources that will be needed in order to succeed.

As it turns out, despite todayʼs hazy conditions, predictions for the small firm of 2020 are abundant and bright.


Hourly timesheets aren’t the only thing beingscrapped. The progression towards paperless offices isa trend that many forum participants believe willbecome the rule rather than the exception.

“Getting rid of the paper has been a godsend forthe firms that have already done so,” says KathleenOrlando, CPA, of Kathleen Orlando and AssociatesInc. “Creating and storing searchable electronic doc-uments has led to space savings, cost reductions, bet-ter organization and a newfound ability to quicklynavigate complex files. It’s absolutely amazing.”

Security concerns, however, are a sticking point formany. CPAs can’t afford to jeopardize the “TrustedBusiness Advisor” label, and therefore many are slowto adopt emerging technologies that control sensitiveclient data.

But the simple fact of the matter is, no matter if con-fidential data is stored in-house or in “the cloud,” aCPA who is vigilant about maximizing security will beable to minimize risk. Participants pointed to dataencryption, security systems, password-protectionprotocols, and secure shredding solutions as only afew of the many ways CPAs can protect their data andreputations while transitioning to a more technologi-cally advanced practice.

The potential for revenue growth and increasedefficiencies simply cannot be ignored, especiallywhen technology is also aiding the rapid expansionof the client base. The ability to securely access real-time data anytime, anywhere with today’s mobiledevices in essence allows professionals to be avail-able to their clients 24/7—meaning borders and timezones no longer apply.

“Implementing mobile, networking and other vir-tual technologies gives the small firm a big opportu-nity to compete with large firms because the limita-tions of location are eliminated,” says McGreal. “I’mfinding that more of our clients are spread across thecountry. I’ll call some of my broker clients thinkingthey’re downtown at the Board of Trade when they’rereally remotely trading from their condos in Florida.”

Strategic StaffingIn a similar fashion, technology has a clear role inaltering the staffing landscape.

First, participants predict staff sizes will shrink orremain relatively unchanged. “Because of technol-ogy and how small firms are adapting to it, they don’tneed more people to take on more work,” saysMcGreal, adding that he doesn’t think his staff levelswill increase even though revenues and billablehours likely will.

Second, firms are expected to become more flexiblewith work arrangements than ever before. The practi-


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cality of mobile and remote access solutions accompanied byincreasing employee demands for greater work/life balance are driv-ing firms to reevaluate the effectiveness of traditional schedules andstructures—and, in turn, flexibility is becoming a significant recruit-ing and retention tool.

“Small firms are particularly well suited to accommodate telecom-muting employees and flexible schedules. It adds versatility andallows employees to remain productive even when they aren’t in theoffice,” says William J. Duffner, CPA, of Duffner & Company PC.“Allowing remote work and accommodating employees when emer-gencies or conflicts arise is also great for morale; they feel like theemployer is concerned about them.”

However, firms shouldn’t get too caught up in the mentality of, “Aslong as the client is taken care of, it doesn’t matter where you work,”cautions John W. Currier, CPA. “If remote work is excessive, the firmrisks having employees lose connections with co-workers andclients, and lack developing teamwork and interpersonal skills.”

Further concerns over managing, motivating and mentoring a sel-dom seen staff have many leaders on the fence, but, Duffner empha-sizes, “The fact of the matter is, employees can be as unproductiveor productive as they want whether they’re sitting in the office or intheir family room.”

To find a balance and mitigate abuse, Duffner suggests develop-ing a clear framework for measuring and monitoring offsite produc-tivity and accountability, and clearly communicating expectationsin relation to face-time with clients and the balance between onsiteand remote work arrangements.

Of course, most importantly, small firms need to recruit and retainstaff members who mesh with their culture and are committed totheir success. The challenge is preventing the emerging cracks in thetalent pipeline from impacting small firms. Besides a perceived short-age of new graduates, CPAs with one to five years of experiencearen’t bringing the skill sets to the table that firm leaders expect.

What’s more, the conflicting values and expectations of the dif-ferent generations inhabiting today’s workplace are presentingmore recruiting and retention challenges than ever before. Partici-pants overwhelmingly expressed struggles in finding and mentor-ing young professionals with the skills and character to succeed atthe partner level.

“The most difficult person to find out there is the one with a fire intheir belly, ready and wanting to go out and do something with theircareer,” explains Duffner. “We need more intuitive problem-solversand proactive candidates who want to move up and make partner.”

One roadblock to successful hiring and mentoring may be firmleaders themselves. “CPAs from the Baby Boomer generation andbefore take a lot of pride in ownership, having their names on theirdoors and business cards, and being defined by their careers. How-ever, Gen Y will not be defined by their work, and that just doesn’tcompute with our generations,” explains Brad Sargent, CPA, of theSargent Consulting Group, member of the ICPAS Board of Direc-tors, chair of the Strategic Planning Committee, INSIGHT Magazinefraud columnist, and moderator of the small practice forums. “It’svery hard for us to relate to that because it’s just not our way.”

In fact, Baby Boomer forum participants repeatedly stated thatthey’re at a loss with younger generations and are unable to con-

nect with them on a meaningful level. Yet they struggle to justifychanging their own set ways. More often than not, they measurethe value, productivity and character of young professionals againstthemselves and the norms and values of the Baby Boomer genera-tion; disappointment quickly ensues.

The truth is that common ground must be found in order to suc-cessfully move forward. Conformity stunts progression and the firmthat fails to evolve with future generations won’t have a future at all.Each generation needs to work smoothly with the other to masternew skills and identify ways to succeed as one team. After all, youngCPAs are the future of the profession—and their peers are futureclients. What’s more, they’ll be key players in many successionplans—a frightening fact for many Baby Boomers nearing retirement.

Struggles With Succession “I am my firm and my firm is me” is a sentiment shared by manysmall firm owners. The practices they’ve built through years of hardwork and sacrifice are their livelihoods. For many, they’re also theirticket to retirement.

Not surprisingly, participants vocalized that plans to pass off thereins or shutter their doors are hard to swallow, and most intend toput succession planning off for as long as possible. Unfortunately,delayed succession planning has its consequences and frequentlylimits options for a successful transition.

“You see yourself pushing 60 and thinking, ‘Well, we alwaysadvise our clients not to sell when they have to, sell before so there’stime to find the right people,’ but we aren’t even doing that our-selves,” said one participant (who prefers to remain anonymous).Like many of his peers, he and his partners are struggling to weighthe pros and cons of a sale or merger, or continuation of the firmunder new leadership. “There’s a lot to talk about. When we look atthe bullet points we really don’t know where to even begin.”

Other participants admitted to being in more challenging posi-tions. One closer to retirement shared that he didn’t have a plan orthe staff to take over his firm. In that situation, a quick sale hasappeal, but without the proper time to prepare, a “fair” offer couldbe hard to find.

“Most practitioners are guilty of thinking that their practices areworth much more than what people are actually willing to pay inthis market,” said another participant. “And none of us know whatfuture valuations will be.”

Many participants simply see themselves working in a reducedcapacity. Some say they’ll retire but remain a consultant to the firm.Others hope to remain an active employee with reduced hours andresponsibilities after being bought out. Then there are some whoplainly state that they’ll work heavily for as long as possible to sup-port family finances and to fund some sort of retirement when they’refinally unable to work any longer. Simply put, most are struggling tonavigate the path to a successful transition and comfortable retire-ment. (Turn to the next page for more on the topic of succession.)

All in all, whether your firm’s path is nearing its end or justapproaching its first bend, you have to lay a lot of groundwork to suc-cessfully navigate the forks, bumps and detours in the road ahead.



the elephant in the roomSuccession is a top priority for today’s CPA firms.So why aren’t they planning for it? By Deborah Lane

In a recent WealthStar Alliance survey, 94percent of accounting firm partners namedsuccession strategy building as a top priority.Yet only 31 percent said they have a plan inplace—a statistic that’s particularly perplexinggiven the fact that, according to a 2011 surveyby The Rosenberg Associates, consultants tothe CPA profession, more than 60 percent ofCPA firm partners are over the age of 50.

What’s holding the process back?



“Most small and midsized firms spend all their time getting chargehours and working ‘in’ the business. Most firms figure the successionthing will simply take care of itself,” says Charles Hylan, shareholderwith The Growth Partnership, which offers marketing and skillstraining to accounting professionals.

“Most firms start succession planning when it’s too late. Succes-sion should begin three to five years before the partner leaves,”says Jim Metlzer, vice president of small firm interests for theAmerican Institute of Certified Public Accountants (AICPA). “Andin medium-sized firms, succession planning should start the daythey become partner.”

Quite frankly, says Marc Rosenberg, CPA, of The RosenbergAssociates, “Good succession planning is the same thing as goodpractice management. Since good practice management should bedone on day one, so should succession planning, even if your part-ners haven’t hit age 50 yet.”

There’s more than a lack of time at play, however. “Life changeis scary, especially in a one- or two-partner firm where you are themaster of your own domain. To some, retirement equals death.Accountants talk to their clients about retirement but they haven’tthought about it for themselves,” explains Joel Sinkin, president ofTransition Advisors, which recently teamed up with the IllinoisCPA Society to provide Project MATS [www.icpas.org/succession],a free, on-demand service for members in need of succession plan-ning help (see sidebar).

But succession isn’t solely about retirement. “What about theunexpected? What about the sudden death or disability of a part-ner? This can put a firm right out of business,” Metlzer warns.

“It’s like the Boy Scouts’ motto—be prepared. It’s as simple asthat. Things do and will change over time, but you need a startingpoint, even if it’s a practice continuation agreement with a fellowCPA or firm,” explains Robert Fligel, president of RF Resources,which specializes in M&A, partner search and consulting servicesfor CPA firms.

For those ready to focus on succession planning, here’s a basichow-to.

Groom Your SuccessorSuccession planning is “about leadership development programsand practices, especially mentoring programs, and effectiverecruiting and training,” says Rosenberg. “Firms need to makeproactive efforts to develop their staff members into leaders andfuture partners. Many CPA firm partners erroneously believe theirstaff either ‘have it or they don’t.’ They think back to when theywere young (if they can remember that long ago) and say, ‘no onehelped me become partner.’”

Ditch the stroll down memory lane and instead treat every newhire as a possible successor. “Train them throughout their careersand when they become managers they should have basic skills tobe an owner in the firm,” says Rita Keller of Keller Advisors, spe-cializing in CPA firm management.

“Continually give younger accountants more challenging work.Partners need to push down work and managers need to pushwork down. In most firms, partners are doing manager work andmanagers are doing senior work and seniors and below are look-ing for work,” she says.

A good managing partner transition starts three years from thedate the incumbent steps down. “Three years out, the firmannounces the new MP. Two years out, the new MP assumes per-haps half of the incumbent’s MP duties. And one year out, the new

MP takes on all of the incumbent’s duties, with the former MPassuming a MP-emeritus role,” says Rosenberg. “This three-yearperiod gives the incoming MP a nice period of time to reducehis/her client base to make time for his/her duties, and also givesthe new MP an opportunity to gradually assume the MP role underthe tutelage of the incumbent.”

Clients are truly the firm’s clients versus the partner’s clients,says Rosenberg. Clients should be “institutionalized.” In otherwords, they should be serviced by multiple firm personnel insteadof being joined at the hip to a specific partner. This makes a clientless likely to leave the firm if their key provider suddenly leaves.“Another nice thing about client institutionalization is that theneed for client transition efforts due to retirement, withdrawal orillness are greatly reduced because successors are automatically inplace,” says Rosenberg.

“Let the client get acclimated to the new person while you arestill there. Let the client see you working shoulder to shouldertogether,” Sinkin advises.

What’s more, have a specific plan that includes timetables andactions required, and get unanimous buy-in from the partnergroup. There must be a fair and rational process for bringing innew partners (ownership, buy-in, compensation, etc.), Rosenbergadds. The buyout plan should not come across to the younger part-ners as a Ponzi scheme (a plan in which younger people keep pay-ing money in with nothing left to pay out to them).

Take the Merger RouteFor many, though, the exit strategy is a merger. “Merger activity isat a record high,” says Metzler. The pace isn’t expected to slowdown between now and 2017; it will become a buyer’s market.

A merger, however, takes major orchestration. “Too many merg-ers are done because one firm ‘fell in love’ with another firm, orone firm has known the other for 20 years or more and fails to askthe right questions. Mergers that are done without asking the rightquestions and performing the requisite due diligence are eitherdoomed to fail or will be painful, at the least,” Rosenberg cautions.

What’s the key to merger success? Have a process from A to Zprepared, in writing. Before you talk to your first merger candidatedecide, again in writing, what the parameters of an ideal firm areand what the deal-breakers and non-negotiables are. If you’re asmaller firm merging with a larger firm, understand with crystalclarity what will be expected of you and how the success of themerger will be measured.

“A merger is not magic; it’s a lot of work, especially once thehoneymoon is over,” says Metlzer. “Don’t underestimate theimportance of cultural fit. How will you retain clients, what willbe the new firm’s service philosophy?” he asks.

Simply put, “If you are merging with a firm where the partnersdo not share your values, vision, strategies or process, it will mostlikely fail,” says David Bergstein, CPA, director of strategic rela-tionships for consulting firm CCH.

Ninety-five percent of the success is chemistry. “If that’s ques-tionable, look for a different merger partner. If in doubt or if youhave to compromise too much about any significant parts of thedeal, don’t do it,” Fligel stresses.

Assess Your Acquisition WorthAnother succession strategy is to sell the practice, which funda-mentally differs from merging since you won’t be working with thesuccessors for very long. Instead, your focus will be on maximiz-ing the sale price and payout you receive.



First thing, value your practice objectively by bringing in a thirdparty to give you a realistic assessment. “I find too often a lot ofego and emotion is poured into how one sees the value of one’spractice, and having an independent advisor can go a long way tobridging the gap between what an individual thinks their practiceis worth and what a third-party is willing to pay,” says Allan Koltin,CPA and CEO of Koltin Consulting Group in Chicago.

Consider, too, that for some period before the sale you’ll needto rein in investments and expenses, making the firm more prof-itable in the short-term, and therefore of greater worth to the ulti-mate acquirer, Koltin explains.

What’s more, “It helps to think of what your clients will do whenyou sell because most payout agreements relate to the ‘stickiness’of the clients. If clients leave the successor firm, your payoutdecreases,” says Bergstein.

First and foremost, put the plan in writing. At least once a yearrevisit the plan to see if the firm is on track with its objectives, andupdate the plan contents where needed. As part of the process,make accountability a priority.

“Even at firms that have plans for practice development, men-toring and management, there is little partner accountability. So

important succession-planning practices don’t get done becausethere are no consequences to partners who neglect their non-pro-duction responsibilities,” Rosenberg explains.

To address this issue, “I am seeing more firms put a clause intotheir succession-planning document that would penalize a retiringpartner for not ‘doing their part’ to successfully transition clientsand keep them at the firm,” says Koltin. “Clearly, attaching somedollars to succession (whether it is to current or future compensa-tion) will go a long way in getting a partner’s attention.”

It’s a daunting task—and it’s human nature to avoid dauntingtasks. However, the consequences of leaving succession to chancecan be devastating. “You risk having your firm fall apart and norevenue coming in when you retire. I have seen cases of sole prac-titioners not providing for their families because they didn’t havea succession plan in place. When they unexpectedly died, clientswere left to scatter because the staff was unprepared to deal withthe situation,” says Bergstein.

But what typically happens if succession isn’t addressed, Koltinwarns, is “a slow death, with the last person standing turning outthe lights on the last day of the firm’s existence.”

A reluctant retiree“What if a partner wants to continue working beyond the firm’smandatory retirement age and the firm is trying to get the retiringpartner to transition their clients to a younger partner?” asksKoltin. “You need a defined retirement date for partners. If thereis no mandatory retirement date (or at least a date by which to sellyour shares or equity interest), partners will continue working aslong as they want to.

A bumpy transition“Exiting partners can fail when it comes to transitioning their booksof business to young partners. Sometimes it could be the fault ofthe firm, in that it doesn’t have adequate service providers to takeover the partner’s book of business. More frequently, the retiringpartner has the mindset that no-one else can service the client as

well as they can and determines that no-one else in the firm canhandle the client from a succession standpoint. I’ve said to retire-ment-minded practitioners, ‘If you are hit by a car tomorrow orwon the state lottery, I guarantee you someone else in the firm (oroutside the firm) could step up and service the client.’ Bottomline—we’re all replaceable,” says Koltin.

A failure to mentorMost small and midsized firms allocate the lion’s share of the firm’sincome based on traditional production measures such as book ofbusiness and billable hours. Firms virtually ignore staff developmentand mentoring when setting their partners’ compensation, saysRosenberg. “It’s no wonder that partners don’t devote much time topractices geared to effective succession planning,” he adds.

FACTORS THAT COMPLICATE SUCCESSION PLANNING

Project MATS to the Rescue: The Illinois CPA Society and Transition Advisors have collaborated to create Project MATS (Merger, Acquisition, Transition and Succession), an on-demand service that provides advice, consultation, information, case studies and succes-sion services at no cost to ICPAS members. Vis i t www.icpas.org/succession today for more information on this service.




TheSoftwarePrinciple

A range of powerful yet simple and intuitive applications keep

today’s accounting practices humming. By Clare Fitzgerald

It’s a crowded, competitive field when it comes to practice management solutions, especially in therealm of tax software, invoicing and time-tracking, document management and data security. To standout, the following companies know that their products need to be simple, intuitive and easy to use—no matter how technologically complex or innovative their solutions are on the back end.

Always-on-the-go accounting and tax professionals need powerful, well-supported tools and secureaccess to client information anywhere, anytime, whether it’s late nights at home or busy days on theroad. Applications that help practices improve workflow, capture more billable hours and spend moretime servicing their clients are in high demand—and the options are endless.

Here are just a few.


TAX SOFTWARE

Drake Software [www.drakesoftware.com]

Drake Software is used by more than 30,000 tax professionalsnationwide, processes more than 15 million federal- and state-accepted returns each year, and has earned multiple Readers’Choice Awards from CPA Practice Advisor.

In addition to electronic filing capabilities, Drake features allfederal and state tax packages. The company also offers tax-plan-ning and compliance tools, document management and storage,business development tools and a “client write-up” accountingpackage. What’s more, Drake recently acquired the CopanionGruntWorx product line—a paperless tax workflow system.

“This is an important move for Drake,” states John Sapp, vicepresident of Strategic Development. “GruntWorx allows us torapidly expand our offerings into the cutting-edge documentautomation technology arena. This enables us to provide tax pro-fessionals with a true end-to-end paperless tax solution anddeliver extremely high accuracy rates.”

PitBullTax Software [www.pitbulltax.com]

PitBullTax Software is designed specifically for tax representa-tives handling IRS collection cases. According to Irina Bobrova,chief operating officer, PitBullTax is one of the few softwarecompanies currently catering to this niche.

“Handling IRS collection cases is very tedious and time-con-suming work, but our web-based tax resolution software isdesigned to help tax representatives prepare successful pack-ages,” she explains. “PitBullTax offers several tools that allow taxprofessionals to analyze a case and find out what possible reso-lutions exist for that scenario.”

PitBullTax Software is especially useful in preparing compli-cated cases such as an Offer in Compromise. The software cananalyze what a client may be eligible for, price the case andhelp the tax professional complete the necessary IRS forms.

“Our software guides tax professionals from A to Z and givesthem more control over their clients’ cases,” says Bobrova. Shenotes that PitBullTax empowers tax professionals who previ-ously might have shied away from IRS collection cases to takeon these lucrative engagements.

Some of PitBullTax’s product offerings include an evaluationtool that uses client financial information to determine a prelim-inary Offer in Compromise outcome and the most advantageouspayment plan; a workflow tool that provides 12 questions to helpusers identify the best course of action for each client's individ-ual set of circumstances; and a fee tax calculator that lists serv-ices used in IRS collection resolution cases and suggests a rangeof minimum and ideal fees for each.

TaxWorks [www.taxworks.com]

Focused on making tax preparation quick and easy, TaxWorks isa division of RedGear Technologies, a family of companies pro-viding tax, accounting and paperless office solutions.

Among TaxWorks’ many features is a web-based E-File Center,which enables users to print bank product checks and review aclient’s real-time status from any location with an Internet con-

nection; conduct real-time calculation to instantly view formtotals before printing; access a fixed asset manager providing 60methods to calculate depreciation; access a client managementinterface that includes a client database and client instructionletter; enjoy complete network compatibility so that all tax pro-fessionals in a firm can access a system simultaneously; andaccess to the TaxWorks Institute, an online library of tax researcharticles providing answers to tough tax questions.

TIME TRACKING, BILLING & INVOICING

FreshBooks [www.freshbooks.com]

Created to minimize billing hassles and allow users to easilytrack their time and billing online, FreshBooks, which has over3 million users, is a natural fit for accounting professionals—andmany of their clients.

Jody Padar, CEO and principal at Arlington Heights, Ill.-basedNew Vision CPA Group, suggests FreshBooks to clients as aninvoicing tool. “The reason it’s so great is because it’s so simple,”she says. “Clients can’t screw it up, and as the CPA, you canwatch what they’re doing and keep control of the back end.”

FreshBooks allows small businesses to easily create invoices,which can be sent via email with the click of a mouse. Once aclient receives an invoice, he or she can pay it online via PayPalor credit card. This means that small businesses can see exactlywhen clients receive, view and pay their invoices.

Office Tools Professional [www.officetoolspro.com]

Designed to help business owners streamline administration,Office Tools Professional boasts more than 10,000 users in theaccounting industry.

The software was developed by looking at the whole office asone unit, says President Michael Giardina. “Rather than just cre-ating an application to fulfill a need, we took a look at what wasgoing on in firms and how we could have a real effect on theirpractice management,” he explains.

Instead of flipping back and forth between folders and appli-cations, Office Tools Professional users can work from oneapplication to track documents, view their calendars, set upappointments, see what their staff members are working on,review project progress, and more. By doing so, Giardina saysOffice Tools Professional can save office staff a half hour to anhour per day in productivity.

“Owners and administrators love it because it’s so cohesive,”he says. “They can spend more time on client service and lesstime on administration.”

The company uses Microsoft technologies and offers practicemanagement resources such as project and time tracking, billingreports, digital notepads, real-time assignment review, activitylists, conferences and training courses, and more.

Credenza Software [www.credenzasoft.com]

Credenza Software’s guiding principle is to design software fromthe professional down, not the software up. “Our software pro-vides an organizational model for the way a professional prac-



tice runs,” explains Ron Collins, company president. “It organ-izes a CPA practice really tightly.”

Credenza expands Microsoft Outlook by adding practice man-agement resources. “So many people already use Microsoft Out-look, and our products add another layer of functionality. Youdon’t have to change; you just add,” says Collins.

Users can organize their calendar, tasks, email, documents,research, phone calls, notes, billable time, and more accordingto their client matter files or projects. Features such as the time-entry assistant flags anything not recorded as a time entry, ensur-ing users bill for all pertinent activities.

Credenza Basic is available for free while Credenza Pro is sub-scribed to on a monthly basis. The Credenza Pro upgraded ver-sion also provides integrated billing and the ability to share infor-mation with other users.

Wellspring Software [www.wellspringsoftware.com]

Wellspring Software makes “check printing easier, less expen-sive and more secure,” says company president Stu Neale. “Wehave a simple product, and service is our number one priority.You can have a great product, but if it’s not supported, it’sworthless. When people need service, they really need it, andsupport is really important to us.”

Wellspring’s PrintBoss software package started out withchecks but has expanded the distribution side of the printingprocess to enable customers to mail, email, fax and archive doc-uments. The software offers document distribution capabilitiesand prints checks or deposit slips anywhere on a network. Print-Boss also offers different interfaces that integrate and stay up-to-date with 38 accounting software packages. And it doesn’trequire any additional keystrokes.

“You only use the keystrokes required in your accounting soft-ware system, and like magic, your check appears in yourprinter,” says Neale.

DATA SECURITY

ShareFile [www.sharefile.com]

Efficient file sharing is critical for accounting practices, butmaintaining the security and confidentiality of those files is evenmore critical.

ShareFile allows users to create a custom-branded, password-protected space in which to easily and securely exchange busi-ness files with clients—eliminating the need to copy files to flashdrives and CDs. The ShareFile product includes a series of PowerTools for email, desktop and seamless software integration, andalso functions as a client portal, allowing users to post electronicversions of past tax returns and other data so their clients canaccess it at any time.

While ShareFile provides more than 30 customized industrysolutions, its ShareFile for Accountants offers secure file-sharingand storage solutions specifically for small to midsized account-ing firms (custom solutions also can be created for larger firms).

According to ShareFile for Accountants Director Laura Ivey,users can securely transfer files such as tax documents, Quick-Books files and Excel spreadsheets that are either too large or

too confidential to send by email. “Accounting firms need toprotect themselves and their clients, and our solutions allowthem to do that,” she notes.

Above all, says Ivey, customer support takes precedence atShareFile. All customers are assigned a dedicated account man-ager to assist them with training and support, and ShareFile cus-tomer support is also extended to clients of ShareFile customers.

eFileCabinet Inc. [www.efilecabinet.com]

eFileCabinet was founded 10 years ago by a CPA who noticedhow much time he and his staff spent going back and forth totheir file cabinets. Hoping to use that time more productively, hehired software developers to create a digital filing system for hisoffice. The software they developed ended up saving two hoursper employee per day. When requests for the software from otherCPAs started rolling in, eFileCabinet, a provider of enterprisecontent management solutions, was born.

Today, 60 percent of eFileCabinet’s clients are CPAs and otherfinancial professionals, says COO Jeff Coulter. “We offer manyfeatures at a competitive price point, giving small to mediumpractices the tools to compete with the big guys.”

eFileCabinet’s electronic document management solutions aredesigned to help organizations capture, manage and protect theirdata—eliminating the need for costly storage space. The com-pany offers tools for regulatory compliance, document retention,file versioning, and more, and its user interface is designed tomimic a real file cabinet. “Our software makes intuitive sense forthe people who are using it,” says Coulter.

eFileCabinet is offered as a traditional client/server-basedsoftware application and in an online cloud-based version. Thecompany is also developing a self-service model, which willenable users to do everything from installation to trouble-shooting themselves. “We want our users to be able to doeverything on their own, but we offer full support if they needhelp,” he adds.

Additional eFileCabinet product offerings include eFileCabi-net Desktop, an electronic document management (EDM) solu-tion to store and manage business documents; eFileCabinetOnline, a hosted EDM solution; SecureDrawer, a client portal/file sharing service; and Concentsus, an online back-up serviceto protect documents via a secure, online repository.

Papersave [www.papersave.com]

PaperSave provides users with all the benefits of a paperless officeenvironment, including faster and easier audits. “Accountants loveit when their clients use Papersave because the audits go so quicklyand so well,” says Holly Condon, VP of sales and marketing.

PaperSave enables users to store more than 200,000 documentsin 40 gigabytes—eliminating space constraints, reducing dataentry and allowing supporting information to be readily on handwhen needed. Financial transaction documents can be quicklydistributed and Papersave automatically matches documents.

Papersave operates two divisions: Papersave Pro is designed forlarger entities with more sophisticated content-management needsand offers seamless integration with Microsoft Dynamics and Black-baud; Papersave Plus is geared towards small-business solutions.




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making your life easier | www.CCFLinfo.org

upcoming events

corporatefinanceprofessionals

The Illinois CPA Society’s

executive educationThe Path to Good Governance: Managing the Intersection ofCorporate Governance, Risk Assessment/Management andStrategic LeadershipFebruary 9, 2012 | Chicago, IL

conferenceControllers ConferenceMarch 15, 2012 | Rosemont, IL

executive educationTax Planning and Reporting for a Privately-Held Companyand Its OwnersFebruary 22, 2012 | Chicago, IL


BUY OR SELL ANACCOUNTING OR TAX

PRACTICEPRACTICES FOR SALE:

Schaumburg Area CPA Practicegross $229K; Springfield Area CPAAudit Only Practice gross $200K;

Lombard CPA Practice gross$206K; Macomb Tax &

Bookkeeping Practice gross $76K;Peoria Tax & Accounting Practice

gross $407K; Rochelle CPA Practicegross $110K; Orland Park Tax &

Accounting Practice gross $404K;La Salle County Accounting & Tax

Practice gross $118K; KankakeeCounty CPA Practice gross $250K;

SE Missouri CPA Firm gross $750K.For practice details, call 1-800-397-

0249. Or, visit us atwww.accountingpracticesales.com

to inquire about availableopportunities and register for free

email updates.THINKING OF SELLING

YOUR PRACTICE?Accounting Practice Sales is the

leading marketer of accounting andtax practices in North America. Wehave a large pool of buyers, bothindividuals and firms, looking forpractices now. We also have theexperience to help you find the

right fit for your firm, negotiate thebest price and terms and get the

deal done. To learn about our risk-free and confidential services, callTrent Holmes at 1-800-397-0249 or

[email protected].

We are a 65 person full service CPA firm that would like to discuss purchasing and/or merging with your

firm. We have completed 15 such

transactions over the past 30 years. Please

contact me at [email protected] to begin building our

future together.Thank you, Earl Holtzman

Michael Silver & Company5750 Old Orchard Road

Suite 200Skokie, IL 60077

847 982-0333www.msco.net

Ready To Retire?

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Save Time Focus On Your Practice While We Sell It Custom Marketing Package Huge Database of Buyers More Personal Service

14 Years of Practice Sales Experience

NaabConsulting.comNaabConsulting.com

FREE ON-SITE CONSULTATION

(888) 726-6282(888) 726-6282

MERGER/SALES

ACCOUNTING OPPORTUNITY

Small CPA firm with many high

earning clients located in Buffalo

Grove looking to bring in a Junior

CPA for future partnership. My goal

is to possibly retire in approximately

10 years. Please respond only if you

have an established client base.

[email protected]

OFFICE SPACEfor RENT

200 S. Wacker Drive

Up to 4 furnished officesavailable with /without

secretarial space in attractivesuite of established law firm.

Great space with largewindows and abundant

natural light in a recentlyremodeled building. Perfect

for solo/small law firm oraccounting practice. Near

Metra and CTA trains, majorexpressways and court

houses. Full time receptionservices, conference rooms,

kitchen, and copier.Reasonable rent.

Contact:[email protected].



2011 CPA Day of Service a Great Success!

THE LATEST FROM THE ILLINOIS CPA SOCIETY’S CPAS FOR THE PUBIC INTEREST

VOLUNTEERNEWS

On September 23, 2011, more than 1,100 volunteers from 90 communities acrossIllinois made an impact on 159 organizations in need. Volunteers sorted andpacked food, cared for shelter animals, helped to raise funds and awareness forimportant causes, and assisted in the beautification of their communities, to namejust a few of the many activities from the day. Winners of our Photo Contest arefeatured here. To see the rest of the photo entries, visit the ICPAS Volunteer Chron-icles blog at www.icpasvolunteerchronicles.typepad.com.

FOR MORE INFORMATION on these and other volunteer programs, visit us online atwww.icpas.org/Volunteer.

Winter & SpringVolunteer

Opportunities CPAs are uniquely qualified to give Illinoisfamilies the helping hand they need duringthese challenging economic times. The Illi-nois CPA Society (ICPAS) has assembled avariety of volunteer opportunities to helpyou help others this tax season. (Tax prepa-ration experience is not required, and train-ing is provided.)

Military Tax Preparation Project: Servethose who serve our country by preparingfederal and state income tax returns fordeployed and recently returned soldiers inIllinois. The ICPAS provides orientationmaterials and IRS resources specific to mili-tary service.

Low-Income Tax Preparation: Make adifference in the lives of individuals andfamilies in Illinois by volunteering as a taxpreparer at Volunteer Income Tax Assis-tance (VITA) sites across the state.

Col lege Financia l A id Appl icat ionAss i s tance: Help students at ChicagoPublic Schools to find the funding they needto go to college by assisting them with thechallenging FAFSA form. ICPAS volunteers,in partnership with the Ladder Up organi-zation, will help students and their parentsaccurately navigate this important process.

Group Winner: E.C. Ortiz at Feed My Starving Children in Naperville

Individual Winner: Bill Bucki with the Knights of Columbus Spaghetti Dinner Fundraiser


POSSIBLE

DonateToday

MAKE THEIR SUCCESS

The CPA Endowment Fund of Illinois inspires, supports and rewardsaccounting students and young professionals through various scholarshipand professional development opportunities. Support the future of yourprofession. Donate today!

www.icpas.org/endowment.htm


NEW online one-stop-shop for small & mid-sized practitioners.

Connections and resources to help power your practice.

Quick answers to your questions on: Licensing and Registration Peer Review Requirements IRS Registered Tax Return Preparer Program Technical Topics, such as Accounting, Auditing, Tax,

Not-for-Profit and Government

NEW & FREE!

Solutions for practice management: Succession Planning Service Marketing Toolkit

Connections to people who can help: Staff Research Specialist NETWORK Volunteers Staff Subject Matter Experts ICPAS LinkedIn Group Member Forum Groups

Check it out today at...www.icpas.org/public


Documents

INSIGHT Magazine - Winter 2011 - Practice Management Special Issue