There are no stupid questions…

Sometimes we get so caught up in our own world we forget that not everyone is interested or has kept up with the changes that have taken place around them.  Some call and ask questions, but what is scary are the people who don’t know and don’t call.

As the Peer Review and Member Services Manager, I started my employment with SCACPA just about the same time that the SC Board of Accountancy mandated peer review for all firms in South Carolina that provided attest services (with the exception of SSARs 8 for management use only documents).  Letters were sent out, notices were posted on the SCACPA and Board of Accountancy websites, articles were written in newsletters, and firms that were not AICPA members began to enroll in peer review.

During that transition to mandatory peer review, hundreds of calls and emails poured in with questions from firms that had not participated in peer review.  That transition has not been without its growing pains because just over a year ago the AICPA made a major computer conversion from an AS 400 – DOS based program to PRISM (Peer Review Information System Management) a windows platform that is still evolving, being updated and changing even as I write this blog.

With all that being said since peer review only happens every three years, if it’s not your year for peer review, you may not be concerned about it, which is human nature.  As you may know, a lot of people don’t worry about their taxes until it gets to be the first of the year. Then it’s, “Oh my, it’s time to get all my stuff together and get it to my CPA shoe box in hand!”

Along with the computer conversion, AIPCA made changes to the peer review program for reviews commencing on or after January 1, 2009.  Some of the changes were significant.  For example, a rating of “Pass” is now the term used for a “clean” review.  If your firm is due to have a peer review the latter part of this year, or in 2012, don’t wait until you get your letter from me requesting your firm’s background information to begin preparing for your review. Instead, plan to attend the Upcoming Peer Review:  Is Your Firm Ready? course July 21, 2011 at the SCACPA office.  I don’t mind trying to answer your questions and will try to do so to the best of my ability, but Mark Hobbs, CPA does a much better job preparing you for the review process and what you can do in advance to be prepared.

It’s like the old saying, “There are no stupid questions, it’s only stupid if you don’t ask.”

Blogger: Glenna Minor, Membership and Peer Review Director, South Carolina Association of CPAs

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Does Your Firm Enjoy Flex Time In The Summer?

The busy tax season is over, the CPE crunch hasn’t yet started, and in these modern times, people are looking for flexibility in their work schedule. Everyone is looking for a better work/life balance, and in most instances younger people even rate a flexible work schedule as more important than a higher salary or better benefits. With summer traditionally being a slower times for CPA firms, will your firm be offering its employees some ease in how they get their hours between Memorial Day and Labor Day?

One approach is to go to a four day week, with the office closing on Friday, where employees work four 10 hour days to accomplish their work goals. Studies show that employee productivity and happiness is generally higher on this type of schedule. Another less tiring approach is to let employees work their 80 hours over two weeks, but they get one whole day within the two week timeframe off. This way, employees are able to choose if they want to come in earlier, take a shorter lunch break, or stay later to fulfill their hours. Employee productivity and happiness is higher with this type of work schedule also, because people are able to schedule personal appointments and long weekends without the hassle of having to take paid time off.

We want to hear from you: Does a summer flex schedule work for your firm, or is it something that should be considered? If your firm already offers employees flex time, how is it working?

Blogger: April Blake, Office & Member Services Coordinator, South Carolina Association of CPAs

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Strategic Thinking

Earlier this year I attended the annual conference of the SC Association of Nonprofit Organizations, which represents charities statewide.  Session topics carried a theme of succeeding in an era of change – and wow, we could all use a little help with that, right? One of the most engaging sessions I attended was led by Allison Black Cornelius [http://blackfishstrategies.org ] and it dealt with how to become a strategic thinking leader.

Allison gave us some tips for developing the strategic thinking ability as a leader or manager; they are:

  1. Think of strategic thinking like driving a car, always be alert to what’s going on around you and be ready to act;
  2. Commit to a practice of adult learning activities: stay on top of news, current events, literature, trade journals, social networks and other sources of information on emerging trends.
  3. Improve your ability to develop and present data, information and knowledge – this is imperative for increasing your influence;
  4. Develop a strong social and strategic network.  Attend conferences and/or professional association meetings (I am personally a big believer in the value of this both personally and professionally); and
  5. Learn how to coach in order to build a strong leadership or management team.

By becoming a strategic thinker you are more attractive to the brightest and most committed people, you’re better able to deal with all kinds of scenarios and contingencies, and the quality of your interactions with co-workers and clients is greatly enhanced.

One place you can find quality local learning and networking environments is in SCACPA’s conferences (and there are several coming up).

Blogger: Erin P. Hardwick, CAE, Executive Director, South Carolina Association of Certified Public Accountants

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And I Thought Heritage Weekend Was All About Golf…

Not one to watch much golf? Neither am I. But who could pass up the opportunity to enjoy a relaxing evening at Sea Pines Resort followed by a spellbinding day of golf at the 43rd Heritage Golf Tournament in Hilton Head, SC? Not this girl.

Slightly overdressed in my white sundress and floppy brown hat, I spent the majority of Sunday following John Daly, Jim Furyk and Luke Donald around the links (and delicately avoiding the handful of alligators sunbathing near the course).

Side note: did you know that each year the Heritage brings more than $81 million dollars to South Carolina’s economy??

Thoroughly exhausted after watching the tiebreaking final round, it was time to head back to Columbia. But who could visit any coastal town in South Carolina without a bite of seafood on the way out? Again, certainly not this girl. I’ve heard there are many fabulous restaurants to be found on the island, and I opted for the first recommendation of Hudson’s. The picture below was taken at nightfall from the outdoor dock section. The gentle sea breeze and tasty hushpuppies I found were the perfect “sunset” to a fabulous (and much needed) getaway.

The weekend left me wondering what else the beautiful island of Hilton Head has to offer. I found a plethora of events and activities on the Hilton Head Island-Bluffton Chamber of Commerce website such as the 15th Annual Rib Burnoff and Barbecue Fest at the Coastal Discovery Museum on May 14, (rain or shine and tickets are $15). Or the 24th Annual Garden Tour which will take you through some of the finest private gardens on Hilton Head Island and in Bluffton (lunch included). On Sunday, May 15 The Art League of Hilton Head Island is holding the 23rd annual Arts and Flowers Festival and the Jazz Corner boasts delectable dining at the R&B Motown with DEAS GUYZ event.

Oh, and did I mention the fabulous beaches stretching over 12 miles and the 25 world renowned golf courses to choose from? Reading about the outlet malls, hundreds of restaurants, 350 tennis courts and dolphin sighting tours have me daydreaming of my next vacation.

Where is your favorite vacation spot in South Carolina? Although Edisto Beach has been a long-standing favorite of mine, Beaufort and Hilton Head are quickly climbing the list.

Speaking of vacations, why not plan a getaway of your own by joining SCACPA for a CPE Vacation Cluster?

Earn education credits and have time for relaxation too…or golf, tennis, shopping, tanning, eating, imbibing, sight-seeing…etc. etc.

Blogger: Emily Allen, Communications Coordinator, South Carolina Association of CPAs

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Employee Benefit Plan Audits: Learning From Our Mistakes

Audits of employee benefit plans have been notoriously problematic in recent years.

To address this issue, in 2009 the South Carolina Association of CPAs joined with the American Institute of CPAs and the United States Department of Labor to properly train auditors. 

Just recently we stumbled across this list from AICPA Professional Ethics Division’s Technical Standards Subcommittee. This list is current as of Nov. 17, 2010. Let’s take a look at the most frequent violations of professional standards in employee benefit plan investigations.

General audit deficiencies

  1. Inadequate documentation of audit procedures.
  2. The auditor did not obtain sufficient competent evidential matter to support the opinion on the financial statements.
  3. The firm over-relied on the SAS 70 report or relied on the report without having first obtained and read it.
  4. The auditor did not develop an audit program relevant to defined contribution plans / defined benefit plan.

Errors in DOL required schedules 

  1. Schedule of Assets Held for Investment Purposes did not properly identify persons known to be a party-in-interest to the plan in Column (a) as required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under ERISA.
  2. A Schedule of Assets Held for Investment Purposes was not attached to the financial statements.
  3. The Schedule of Assets Held for Investment Purposes at End of Year improperly excluded participant loans.

Errors in the auditor’s report 

  1. The auditor did not properly dual date the reissued report.
  2. The auditor’s report did not identify the supplemental schedules included with the basic financial statements and required by the Department of Labor.

Disclosure errors and omissions 

  1. Failure to disclose investments that represent 5 percent or more of total net assets.
  2. Failure to disclose the amount of forfeited non-vested accounts.
  3. Failure to disclose the method and significant assumptions used to determine the fair value of investments (or contracts) nor indicate on the presentation of investments how the fair value has been determined.
  4. Failure to disclose party in interest transactions.
  5. Failure to disclose the net change in fair value of each significant type of investment.
  6. Failure to disclose the plan’s federal tax status.
  7. The financial statement disclosures addressing information certified by the trustee incorrectly included non-investment information, which should have been subjected to audit procedures or improperly excluded information that was certified.
  8. The financial statements did not disclose a reconciliation between the assets reported in the audited financial statements and the assets reported in the Form 5500.
  9. The net appreciation/depreciation of investments was not stated separately from interest and dividends.
  10. Failure to disclose whether the employer absorbs significant costs of the plan.
  11. Failure to disclose the vesting provisions.
  12. Failure to disclosed items related to benefit-responsive investment contracts such as the average yield, the crediting interest rate, the amount of valuation reserves recorded to adjust contract amounts, the fair values, and a general description of the basis and frequency of determining crediting interest rate resets and any minimum crediting interest rate under the terms of the contract and any limitation on related liquidity guarantees.
  13. Health and welfare: The benefit obligations exceeded the net assets of the plan but the footnotes did not disclose the method of funding this deficit.

For more information, consider attending the 2011 Government and Benefit Plans Conference
Learn how to improve audit effectiveness and quality in employee benefit audits under the U.S. Department of Labor at SCACPA’s third annual benefit plans conference, scheduled for May 19 in Columbia. Get details and register here.

And don’t miss these related learning opportunities:

Blogger: Reva Brennan, MPA, CAE, IOM, Associate Director, South Carolina Association of CPAs

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Embracing or Avoiding Change

Have you been to a conference that provided such provocative information that you return to work with so many ideas that your head is swimming?  Having recently attended the Digital Now Conference that’s exactly how I’m feeling.

You see, the content at this conference is focused on everything digital.  How one provides the leadership for and management of the transition from a traditional organization to one that embraces the new, technological world in which we all operate.  And frankly, we will all need to do this if our organizations are going to be successful over the long haul. It’s imperative for survival.

Here are some key insights from a panel discussion on how to effectively lead your organization through times of vast change:

  1. Anticipate all scenarios and manage risk
  2. Listen to your customers, constituents and staff
  3. Be innovative and willing to think differently
  4. Question your organization’s structure and how you get the work done
  5. Ensure all staff are passionately engaged in the organization’s mission going forward

What are you doing to prepare your organization and your team for the future?

Blogger: Erin P. Hardwick, CAE, Executive Director, South Carolina Association of Certified Public Accountants

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Dear CPAs,

The sun is setting on the horizon that is tax season. The endless hours of sitting at your desk poring over numbers, columns and client information is closer than ever. Some of you may plan to celebrate by popping open a cold beverage once the clock strikes midnight, toasting another successful tax season whirlwind. Others will be snapping the handles in place on their rolling luggage, headed off to a secluded location with their long lost spouse and children. Everyone else may just find respite in the fact that their work routine can return to a state of normalcy, finding comfort in being able to get stuck in rush hour traffic, because that means leaving the office at 5 o’clock and seeing daylight again!

How will you be enjoying yourself once you’ve filed your last piece of tax season related paperwork? Tell us in the comments section below, and carry on through April 15th!

Blogger: April Blake, Office & Member Services Coordinator, South Carolina Association of CPAs

We thought you might enjoy these previous responses from SCACPA members:
Go on a cruise
Celebrate by giving everyone a day off
Play golf with friends for a few days
Doing absolutely nothing!
Taking a long bike ride in the mountains

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CPAs as Nonprofit Leaders: How Are You Serving Your Community?

CPAs are often asked by nonprofit organizations to serve as a board treasurer. That makes perfect sense. Nonprofits often lack the financial expertise that a board so desperately needs.  CPAs bring a wealth of knowledge and experience to the board table that helps strengthen and grow the nonprofit so that it can better meet its mission.

I was “extra” proud today when the nonprofit HALOS was honored with the Excellence in Nonprofit Management Award by the SC Association of Nonprofit Organizations, a statewide organization representing charitable organizations.  Why was I extra proud? HALOS is one of many excellent nonprofits, but the board president who was there to receive the award along with the executive director was Robbie Ellison, CPA, a partner with Moore Beauston & Woodham.

Robbie shared with me his passion for HALOS’ mission – you could see it in his eyes. The organization provides much-needed resources for children who are victims of abuse and neglect who are often in emergency situations. Robbie began his work with HALOS as the board treasurer and over time moved into the position of board president.  Under his leadership the organization has thrived.

It is no surprise that CPAs can make a tremendous difference, a lasting impact on the people and the communities of our state.  What are you doing to give back, to improve lives, to make a difference?  Are you volunteering in your community?  If not, I encourage you to make a personal commitment to consider causes for which you have a passion and start volunteering.  You have so much to give.

Whether or not you provide client services as a CPA to nonprofit organizations, you will find SCACPA’s spring Nonprofit Conference a learning opportunity that will help you better assist nonprofits either as a client or as a volunteer.  The conference which is co-sponsored with the SC Association of Nonprofit Organizations, is one you don’t want to miss.  Click the link below for details on content and registration.

Thank you Robbie Ellison, and all CPAs who volunteer their time to help nonprofit organizations become stronger and more effective!

2011 Nonprofit Conference

Blogger: Erin Hardwick, Executive Director, South Carolina Association of CPAs

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The Decision to Learn

I recently attended a conference session focused on The Decision to Learn, a book published by ASAE: The Center for Association Leadership. The author researched and analyzed why people seek continuing education and how membership organizations can meet learners’ needs. I was excited to learn the Ohio Society of CPAs was one of the organizations that participated in the research. I immediately returned to the office to get permission to purchase the book to dig a little deeper. I was curious to know if the 2008 SCACPA research conducted by Kerr & Downs matched the findings in the book.

Highlights from the decision to learn study were:

  • Access to professional education programs is an important benefit of membership.
  • Association learners strongly prefer in-person programs but will participate in distance learning.
  • Sense of affiliation with an association is the strongest predictor of attendance in association learning programs.
  • The youngest members have different motivations to learn.
  • Respondents want to learn from practitioners.

The challenge for me after hearing the session and quickly skimming the book is, “How does SCACPA meet the needs of its members when the preference for learning varies from the traditional live in-person programs to the technology driven formats online? Is the answer a mix of all methods of learning to offer members the opportunity to get the best out of their learning experience by combining varying methods of learning?”

I would love your help in figuring this out. Please respond to the poll below and stay tuned for my next blog post as I continue reading The Decision to Learn and announce the results of our poll.

What is your preference for learning?

Want to experience the cutting edge of online learning? Check out Second Life, a 3-D virtual world where users can attend educational events, socialize, customize an avatar, connect and create using free voice and text chat.

Blogger: Reva Brennan, MPA, CAE, IOM, Associate Director, South Carolina Association of CPAs

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Advocacy for the CPA Profession

Surprisingly, or maybe not, 2011 has so far been a busy year in the legislative and regulatory arenas.  Several issues impacting CPAs have surfaced in Columbia, and as the advocate for the CPA profession in the state, SCACPA has been on the case.

First up was the new deadline for quarterly payroll returns proposed by the SC Department of Employment and Workforce (DEW).  Business owners and CPAs received notices from the agency late in 2010 that the deadline for these returns would fall on the 15th day following the end of a quarter. Needless to say, this would have posed significant issues for CPA firms preparing tax returns under the same deadline structure.  Through letter writing and phone calls, SCACPA convinced the agency to drop the proposal to change the date.

Next in line is federal-state tax conformity legislation, H.3583 which is on the top of SCACPA’s legislative priority list. Introduced and passed early in the session by the House, the bill has stalled for three weeks in the Senate while debate on issues such as immigration, unions and roll-call voting rules divert attention from other worthy bills – like tax conformity.  During the week of March 7, I wrote a letter to all senators, which was delivered to all on the Senate floor, imploring them to take up this legislation. On March 8, Sen. McConnell (R-Charleston) took us by surprise by amending the tax conformity bill by attaching S.11, a Taxpayers Fairness bill that relates to how the state Department of Revenue interprets tax law. This amendment caused the Senate to send the bill for further study. Stay tuned as we continue to work on advancing tax conformity legislation.

Lastly, is the concern with the property tax return, also known as PT-100. The state Department of Revenue sent notice late in 2010 that these returns must be filed using the SC Business One-Stop system (SC BOS). The system was not initially developed to accommodate filings by third party preparers, like CPAs, making filing cumbersome and time consuming. Following a meeting and several conversations with DOR staff, SCACPA provided members with tangible examples of how they can proceed with filing PT-100s either through SC BOS or by paper.  See our Web site for more information.

All this activity defines so clearly the importance of advocacy for the profession.  Won’t you be a part of our cadre of CPAs who show their support of SCACPA’s advocacy efforts?

Here’s what you can do:

Blogger: Erin Hardwick, CAE, Executive Director,  South Carolina Association of CPAs

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