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Taxes' impact on smoking rates? What a drag
2007-08-13 04:29:00
Photo by J.L. Trinh If you're searching for the perfect incentive to quit smoking, look no further than your wallet. According to this USA Today report, heavy smoking-related taxes are resulting in significant drops in the consumption of tobacco products in the United States. Quoting from the article: "The amount of decline in smoking is directly tied to the size of the tax increase. Cigarette sales fell 18 percent in North Carolina last year after the tax was raised in two steps to 35 cents from a nickel. The tobacco-growing state resisted higher cigarette taxes until 2005. Elsewhere: "Connecticut has increased its tax to $1.51 from 50 cents per pack in 2002. Since then, per capita consumption of cigarettes has fallen 37 percent. "New Jersey raised its tax to $2.40 from 80 cents in 2002. Smoking has dropped 35 percent. "California raised its cigarette tax to 87 cents per pack in 1999 but hasn't changed it since. Smoking is down 18 percent since the tax increase....
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Are we mortgaging our future?
2007-08-11 12:00:00
The stock market has been taking a beating lately, and many experts are blaming sub-prime mortgages. These risky mortgages -- which typically have less-than-favorable terms and are often given to home-buyers who have credit problems -- were all the rage a few years ago when home prices were rising rapidly. According to the Wall Street Journal, "delinquencies stayed low at first because U.S. home prices were rising at a rapid clip, and borrowers who fell behind on payments were able to simply refinance their mortgages." But as home prices have dropped and the housing bubble threatens to burst, more and more borrowers are unable to keep up and are defaulting on their loans, and the banks that gave them the money have been left holding the bag. That, in turn, has left investors nervous. According to this National Public Radio report, overseas banks that have invested in "U.S. mortgage-backed securities" are experiencing big losses, and that is sending stock prices plunging throug...
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What customers of CPAs really want
2007-08-10 12:25:00
I recently came across this list of suggestions from the book, The Trusted Advisor, by David Maister, Robert Galford and Charles Green. I found them in Ron Baker's book, Measure What Matters to Customers . These suggestions are the most common suggestions that customers say they want from their professional relationships: Make an impact on our business; don't just be visible. Do more things "on spec" (i.e., invest your time on preliminary work in new areas). Spend more time helping us think and develop strategies. Lead our thinking. Tell us what our business is going to look like five or 10 year from now. Jump on any new pieces of information we have so you can stay up to date on what's going on in our business. Use our data to give us an extra level of analysis. Ask for it; don't wait for us to give it to you. Schedule some off-site meetings together. Join us for brainstorming about our business. Make an extra effort to understand how our business work...
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Sarbanes-Oxley: A corporate cure-all?
2007-08-09 21:52:00
There doesn't seem to be much middle ground when it comes to the Sarbanes-Oxley Act: You either love it or hate it. Commentary tends to fall into one of two camps: (a) SOX  has helped corporate America by re-establishing trust in our markets in the years since Enron; or (b) SOX has hurt corporate America through its huge complaince costs, in terms of both time and money. You can file this Wall Street Journal op-ed piece under (a) above. In "Sarbox Was the Right Medicine," author Thomas J. Healey -- a retired Goldman, Sachs & Co. partner who served as assistant Treasury secretary under President Ronald Reagan -- says Sarbanes-Oxley is exactly what the business world needs. "The last five years have made it irrefutably clear," Healey writes. "Sarbanes-Oxley is a textbook case of how regulation should ideally work in a democracy: A scandal is addressed through strong legislative reaction, followed by fine-tuning by relevant agencies (in this case, ...
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The future of business: 'Smart' is out; 'intelligence' is in
2007-08-08 22:45:00
Edie Weiner Let's gaze into our crystal ball for a moment and ask this question: What does the future of business look like? In a recent column titled, "The Next Big Thing," Bay Street Group's Rick Telberg says it looks ... well, smaller. Telberg cites a new report from Intuit and the Institute for the Future that predicts "a new economy increasingly composed of micro-businesses led by a much more diverse bunch of entrepreneurs." In Telberg's plain English, the report says small businesses will be "popping up by the millions, all of them in need of someone who knows accounting, finance, payroll and other aspects of business management and administration." That's the good news for CPAs. The bad news is that the very role CPAs play in the future may change dramatically. That's according to Edie Weiner. She's president of a "futurist consulting group" called Weiner, Edrich, Brown, Inc., and she spoke to a group of state CPA society representatives in Scottsdale, Ariz....
More About: Business , Intelligence , Smart , The Future

Make your employees want to stay
2007-08-07 22:22:00
We've spent a bit of time recently talking about unique recruitment strategies for talent-strapped organizations. (See this post ... and this one, too.) Today, let's talk about retention. According to this Robert Half International report, employers are rolling out the red carpet for top accounting talent these days, often in the form of higher salaries and enticing benefits. In fact, states the report, "in a survey of 1,000 hiring managers, 21 percent said the inability to offer competitive compensation was a key obstacle to hiring qualified workers." So what can smaller, resource-poor companies do to compete for top talent? The report suggests that you "tout the advantages of your work environment" by emphasizing things like your office's family-like atmosphere, advancement opportunities, and little or no travel. Equally important, though, is the ability to keep your employees stocked with the latest technology and resources that can help them do their jobs. "For today...
More About: Employees , Make , Stay

Top 6 outcomes of managing people and how to get them
2007-08-06 12:00:00
A recent study by Cornell's Center for Advanced Human Resource Studies and The Gevity Institute outline the top six outcomes for businesses (or firms) that you receive from managing people better. My friend, Mark Koziel at the AICPA's PCPS referred me to this report. The top six outcomes for small and mid-size businesses (and CPA firms) are: Commitment to the company -- loyalty Job involvement -- the willingness to go above and beyond Adaptability -- the willingness to learn new skills Helping behaviors -- teamwork and pitching in when other are overloaded Customer orientation Knowledge sharing According to the study, companies and firms receive these outcomes from focusing on three key areas: Employee selection Retention and job satisfaction Managing performance All three are customized based on the firms' management philosophy and business strategy. In other words, they are aligned with the firm's vision, mission and values. By the wa...
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Saving for retirement? Don't make these eight mistakes
2007-08-05 12:00:00
Through comprehensive financial literacy efforts and the Feed the Pig campaign, CPAs from coast to coast are preaching the wisdom of saving for retirement and making sound financial decisions. Just as important, though, is not screwing up. With that in mind, the Maryland Association of CPAs and the American Institute of CPAs offer these "Eight Retirement Saving s Mistakes to Avoid." Steer clear of these missteps and you might just find yourself on easy street. Not starting early enough. Poor asset allocation. Underestimating your life expectancy. Misjudging your ability to continue working. Not rolling over your retirement savings when you change jobs. Borrowing against your retirement fund. Focusing on your nest egg too much. Not consulting with a CPA. Get details on each of these mistakes here, then tell us: What's the best retirement advice you've ever received?
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FIN 48 and independence: Does one impact the other?
2007-08-04 12:00:00
Regulators have determined that performing certain non-attest services can impair a CPA's independence. Recently, though, the question has been raised: Do FIN 48 services apply? FASB  Interpretation (or FIN) 48 is titled, "Accounting for Uncertainty in Income Taxes," and it presents many daunting tasks for tax professionals and their clients alike. According to the AICPA, many CPAs have begun asking whether they can help attest clients in applying  FIN 48 without hurting their  independence, "given the potential complexity of the judgments that the client must make or approve in connection with such services. " The short answer is "yes." The AICPA's Professional Ethics Executive Committee has decided that CPAs can assist clients in applying FIN 48 "provided the (CPA) is satisfied that the client understands the reasons why a specific tax position does or does not meet the more-likely-than-not (MLTN) threshold and the basis for t...
More About: Independence , The O , Epen

10 rules for strategic innovators
2007-08-03 13:04:00
Have you ever experienced the thrill and satisfaction of building something new from an idea or inspiration? Have you ever taken the risk of trying something new? The "10 Rule s for Strategic Innovators" will increase your success rate and confidence in starting to work on that next innovation. I promised to continue sharing some of the great ideas that come from my summer reading in an earlier post. This post is about 10 Rules for Strategic Innovators, by Vijay Govindarajan and Chris Trimble. (Actually, I forgot to include this book in my original list.) This book is for anyone who has started a new venture, division or business inside an established business or, as the authors would say, strategic experiments that target untested markets. I saw author Chris Trimble at one of my favorite, must-attend conferences, the Association Digital Now in Orlando (see my earlier post). You can watch highlights from that speech by clicking this link. What I really liked is the way h...
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New employees? Get 'em while they're young
2007-08-02 20:33:00
Given the profession's talent shortage and the demand for new CPAs, recruitment and retention are red-hot issues these days. In an earlier post, we examined one unique strategy in which employers develop ongoing relationships with top students and their professors. The hope is that those relationships will blossom into a recruiting edge for employers who do it right. Expanding on that idea is "CPAs: The Next Generation," an article by Accounting Today Associate Editor Alexandra DeFelice. It's a strategy that could be especially beneficial for smaller firms, DeFelice writes. "Even small firms without big budgets can focus on recruiting at the local level, especially if they start the process when the students are still impressionable sophomores," she states. "By the time they have their diplomas in hand, most grads already have made up their minds as to where they want to work, according to Ed Nusbaum, Grant Thornton’s CEO and executive partner. Investi...
More About: Employees , Young

Second Life recruiting now a virtual reality
2007-06-23 18:57:00
People have been conducting business in the virtual world Second Life for some time. Now, they've begun hiring employees there, too. A recent Wall Street Journal article by Anjali Athavaley explains how Microsoft, Verizon, Hewlett-Packard and Sodexho Alliance, among others, took part in a recent virtual job fair to learn how to recruit new talent through Second Life . "The phenomenon of recruiting on Second Life began with smaller, more progressive companies that already used the site to market their products,"  Athavaley writes. "These companies occasionally recruited Second Life users who visited their buildings. Now, other employers are inviting prospective hires who have never used Second Life to show up in their virtual world and meet with their avatar recruiters." The process isn't without its problems. Topping the list is learning to how navigate your way through a virtual interview -- teaching your virtual self how to sit and finding appropriate ...
More About: Reality , Virtual Reality , Recruiting

You've graduated. Now what?
2007-06-23 00:56:00
Photo by chispita_666 Summer's here ... time for college graduates to take their last breaths of free air before joining the workforce. They've already received an earful of advice from their commencement speakers, but now it's time for America's CPAs to chime in. Rick Telberg recently surveyed CPAs from coast to coast in search of the perfect start-of-career advice, and he found a lot of it. Among the insightful nuggets: 86 percent of respondents say "the ability to relate to people and to get along with others" is the most important skill to bring to the workplace. From Peter Frank, of Dumfries, Va.: “Never take training for granted. Get the most out of it. Get your CPA early and go after your master's in tax or business. Treat your clients as you would want to be treated. Learn from your mistakes.” From Cheryl Solze of Colorado Springs: “You need to like working with people in order to be a good CPA. It's not all about numbers.” And from Matthew Pl...
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Texas jumps on mobility bandwagon
2007-06-21 19:28:00
Photo by Phineas H It just got a bit easier for CPAs to do their jobs, and more help may be on the way. According to the Texas Society of CPAs, Texas has passed legislation that allows CPAs with substantially equivalent qualifications to practice in Texas without notice or license.  The law is effective on Sept. 1, 2007. Texas is the seventh state to adopt such mobility legislation; it joins Ohio, Indiana, Missouri, Tennessee, Wisconsin and Virginia. (Out-of-state CPA firms that perform audits on Texas companies still must have a Texas license.) Mobi lity -- or a lack thereof -- has been a painful thorn in the profession's side for some time now, so this is great news to practitioners everywhere. In a recent Journal of Accountancy article, Scott Voynich, chair of the AICPA's Special Committee on Mobility , summarized the problem: "Smaller firms don't have the resources to be certain they are in compliance with every state's requirements," Voynich wrote. "Th...
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Accounting standards: Convergence creeps closer
2007-06-20 17:13:00
We may be a step closer to seeing one global set of accounting standards. The SEC is seeking comment on a proposal that would allow foreign companies that trade on U.S. exchanges to file their financial statements using International Financial Reporting Standards , rather than U.S. generally accepted accounting principles (GAAP). The plan is "a significant next step in the road toward a single set of globally accepted accounting standards," said SEC Chair Christopher Cox. According to CFO.com's Sarah Johnson, Cox claims such a move "will cut filing costs for foreign companies and encourage more companies to raise capital in the United States." Meanwhile, WebCPA reports that "the SEC will, in the upcoming months, issue a concept release to float the idea of giving U.S. firms the choice of reconciling in the international rules. That may lead to regulators eventually giving U.S. filers a choice between GAAP and IFRS." What do you think? Is it time for financial reporting ...
More About: Accounting , Convergence , Closer , Converge

Attention, CPAs: This ethics proposal applies to YOU
2007-06-19 16:02:00
Photo by justinbaeder A new exposure draft from the Professional Ethics Executive Committee has potential implications for all CPAs. Read on ... The PEEC has proposed a new Interpretation 102-7, "Other Considerations: Meeting the Objectives of the Fundamental Principles." The interpretation is part of Rule 102, "Integrity and Objectivity," of the AICPA's Code of Professional Conduct. The PEEC has also proposed a new "Framework for Meeting the Objectives of the Fundamental Principles," which is related to Interpretation 102-7. "The proposed framework provides guidance to members when faced with making decisions on ethical matters that are not explicitly addressed by the Code of Professional Conduct," says the AICPA, "and (it) applies to all members — members in public practice as well as those not in public practice (including members in business and industry, government and education)." Read the exposure draft in its entirety, then make sure to submit your comments be...
More About: Proposal , Attention , Lies , Plies

Dad: The $10 billion man
2007-06-17 19:52:00
We love you, Dad ... and here's the receipt to prove it. Consumers will spend about $10 billion on Father's Day gifts this year, according to the National Retail Federation. That's an average of $98 per person -- nowhere near the nearly $140 each person spent on Mother's Day gifts this year, but still about $10 more than last year. The most popular gifts for Dad? According to the NRF, they are: a special dinner out (43 percent), apparel (37 percent), gift card (30 percent), electronics (18 percent), sporting goods or leisure items (14 percent), tools or appliances (14 percent), and home improvement items or garden tools (12 percent). A final note: We all know that more phone calls are made on Mother's Day than on any other Sunday of the year, but did you know that, historically, more collect calls are made on Father's Day than on any other day of the year? Talk is cheap after all ...
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Outsourcing is in: Here's how to do it right
2007-06-14 23:12:00
Photo by Kieran Lynam No matter what you think about outsourcing, you can't argue that it's here to stay. According to the International Association of Outsourcing Professionals, about $6 trillion in outsourced business is done worldwide each year. "And it’s not just an option for Fortune 500 companies," writes Rick Telberg. "It’s been estimated that outsourcing by small businesses in the United States will become a $25 billion market by 2009." Not outsourcing yet? Sit tight, says Telberg -- you soon will be. He offers tips on how to do outsourcing right. The secrets are to (a) determine where outsourcing fits with your strategy, (b) evaluate what can be outsourced, and (c) closely monitor your outsourced activities. Still, many businesses are concerned about legal and ethical issues surrounding outsourcing. This Journal of Accountancy article addresses many of those issues. And while we're at it, here are some more outsourcing-related resources that might be h...
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Attention, accountants: Get certified and earn more
2007-06-13 22:00:00
Photo by zacksphoto We've always known that it pays to be a CPA, but now we have proof. A new salary survey released by the Institute of Management Accountant s shows that certified accountants -- those holding the CPA, Certified Management Accountant (CMA) or Certified Financial Manager (CFM) certifications -- earn about 27 percent more than their non-certified peers. The average 2006 salary of certified accountants was $102,393, compared to $80,738 for those without certifications. The difference in total compensation – salary plus other incentives like bonuses and profit sharing – was even higher: $123,662 for certified accountants, compared to $94,191 for non-certified accountants. Download the survey in its entirety. "The positive effects of certification run both ways," said IMA board Chair William L. Brower Jr. "First, to the organization, which gains a highly qualified professional, and second, to the individual, whose investment in advanced training yield...
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Accounting enrollments continue to rise
2007-06-12 21:06:00
Towson is among those with higher enrollments.(Photo by Androfire) More good news like this and the CPA shortage could soon be history. Accounting enrollments at  Maryland’s four-year colleges and universities increased 12.3 percent in 2006, according to the Maryland Higher Education Commission. In its annual report, "Trends in Enrollment by Program: Maryland Higher Education Institutions," the MHEC reports that enrollments have now risen for five consecutive years. Among public universities, the University of Maryland University College reported the greatest increase, at 19.7 percent, followed by Salisbury University (15.9 percent) and Towson University (13.9 percent). Independent universities were led by Loyola College, which posted a 25.7 percent increase in accounting enrollments last year. Hang tight, employers: Looks like more CPAs are on the way. (Thanks, by the way, to the MACPA's Richard Rabicoff for alerting us about the report.)
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Relief granted for 'more-likely-than-not' effective date
2007-06-11 21:53:00
An important alert for tax practitioners: Last week, the AICPA urged the Treasury Department and the IRS to grant transitional relief for the "more-likely-than-not" provision that is included in the recently passed "Small Business and Work Opportunity Tax Act of 2007." The agencies apparently were listening. The IRS and the Treasury Department have released a notice that provides "guidance and transitional relief for the return preparer penalty provisions amended" by the tax law. According to the IRS, the transitional relief "will apply to all returns, amended returns and refund claims due on or before Dec. 31, 2007, including those returns, amended returns and refund claims filed pursuant to extensions to file due on or before Dec. 31, 2007; to 2007 estimated tax returns due on or before Jan. 15, 2008; and to 2007 employment and excise tax returns due on or before Jan. 31, 2008." Part of a larger Iraq war funding bill, the tax act includes a revision of section 6694 of ...
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Will you be able to afford tuition in 2020?
2007-06-10 18:11:00
This week's Money Management tips focus on saving for college. In a nutshell, the message is this: If you have young children and haven't started thinking about paying for college, you'd better start. Let's use my daughter as an example. She's about to turn 5, which puts her on track to enter college in 2020. According to The College Board, the total cost of a four-year public university education in 2020 will be $160,341. If she chooses (God help us) a private university, the projected four-year bill will be $345,593. Which brings us to this week's tips: "Paying for a child’s college education when you've failed to save enough" offers advice on how to take advantage of various loans, grants, scholarships and payment plans -- and how not to pay for college. " "The pros and cons of 529 college savings plans" examines the good and bad points of these increasingly popular savings vehicles. You'll find more advice from CPAs about how to save for c...
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CPAs care (for Casey Cares Foundation)
2007-06-08 13:25:00
On June 7, the MACPA's New/Young Professionals Network (NYPN) held its annual charity event at Tom Mitchell's Golf Complex in Reisterstown and raised almost $5,000 for the Casey Care s Foundation , which helps critically ill children and their families in Maryland. Almost 60 young CPAs came out to play the "monster in the pines" course, donating their time and money to this important cause. You could feel the sense of urgency and pride in these young CPAs as they rallied to get a such a strong turnout. The event took on even more significance as the charity's headquarters in Arbutus burned down just a few days earlier. There was a genuine spirit of concern and urgency as these young professionals rallied their friends to help them. Every year, our NYPN group has selected a charity to help with its volunteer efforts. The group has identified volunteerism and helping the community as an ongoing and regular part of its strategic plan. These young professionals definitely h...
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Gadgets: Don't leave home without them
2007-06-07 04:34:00
Photo by Glutnix Cell phones, PDAs, laptops, digital recorders, iPods. They're all supposed to make a road warrior's life less stressful and more enjoyable, right? And they will ... as soon as you decide which of each device to buy. What we need is a tech Sherpa to guide us through this labyrinth of gadgetry. Meet Bob Jennings. The Jennings Seminars president has written a Journal of Accountancy article that offers tips on how to arm yourself with powerful yet affordable high-tech tools that will  help you get the job done on the road ... and won't weigh you down in the airport. He offers suggestions for choosing a computer, printer, scanner, Internet access, fax service, remote-access software and car-travel equipment. When you're done reading, you'll want one of each. I did, anyway. What's the one gadget you can't live without on the road?
More About: Gadgets , Home , Leave

The hunt for the elusive satisfied client
2007-06-05 06:38:00
Photo by -bast- How do you make -- and keep -- your clients satisfied? Tough question, especially for professionals like CPAs. While searching for an answer, it might be useful to ask, "What might cause a client to become dissatisfied?" Daniel Laufer, a CPA and an associate professor of marketing at Yeshiva University in New York City, takes a closer look in this article. In it, he boils down the main reasons for client dissatisfaction to this: Performance does not meet expectations. The article is an insightful look at what happens when expectations aren't met and how CPAs can remedy the situation. But what, exactly, are those expectations? Rick Telberg is on a quest to find the answer. He recently asked more than 2,000 finance and accounting professionals this question: What do clients want?  "The responses," writes Telberg, "indicate a general, if not unanimous, consensus: Client s want service. Lots of it. Now. And it better be good. ... and che...
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Integrity: The most highly valued leadership quality
2007-06-04 22:22:00
What trait above all others should a business leader have? Is it experience? Technical expertise? Effective communication? At least one group of professionals says, "None of the above." Nearly one-third of CFOs polled for a new survey say integrity is a successful leader's most important quality. That's not terribly surprising, given the emphasis that's been placed on ethics and integrity in the wake of Enron, WorldCom, et. al. Still, it's an important reminder of the significant role integrity plays in corporate America today. “History has shown the importance of integrity in all aspects of business, from managing assets to managing people,” said Paul McDonald, executive director of Robert Half Management Resources. “Corporate scandals of the recent past have underscored the need for sound corporate governance practices and transparency in financial reporting.” What trait do you value most in your leaders?
More About: Leadership , Integrity , Value , Quality , Ship