CONNECTIONS - March . April 2017

CONNECTIONS m a rc h

B U S I N E S S A N D I N D U S T RY I S S U E

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Take deep breaths.

April 18 will be here soon.

We’re behind you all the way.

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BUSINESS AND INDUSTRY 5 | How to Break Down Silos

6 | Culture and Successful Leadership

26 | Preparing for Big Data

DEPARTMENTS

INSIDE THE ASCPA

4 | Message from the Chair

20 | CPE for B&I Members

8 | Member Profile – Fred Johnson

22 | Nominations Report

30 | 2017 Young CPA Cabinet

10 | ASCPA 2017 24 | Member News 34 | Remembering

34 | Classifieds

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MESSAGE FROM THE

CHAIRMAN

O

ne thing I always have to remember when sitting down to write the Message from the Chair is the difference in time between when I write it and when you will read it.

For instance, I could talk about the unbelievable Super Bowl we just watched but by the time you see this, football will be an afterthought and spring training will be well underway.

in daylight on spring evenings AND the excitement of picking the right 12 over 5 upset on my bracket.

I mention those in public practice when talking about busy season, but I’d be remiss if I didn’t recognize our business and Industry people as well. This season of the year does not pass over you guys either. Whether it’s year-end closing, W-2s, 1099s, preparing for your outside accountants or the many other daily and weekly functions, there is no lack of work to be done during what is now a busy season for all.

I could remind you to send your sweetie an Outlook appointment for dinner (because who can do anything these days without an Outlook reminder?), but that’s long gone, too. By the time you read this the Alabama Legislature will have been convened for a month and those in public practice will be in the heat of busy season. It will be March and the adjusted tax deadline will be upon us.

When considering what we all have on our plates for these months, it reminds me of an illustration I once saw of a man coming home from work to his family. He symbolically “hangs his work” on a tree in the yard before he enters the house each night. I think that’s a wonderful reminder that, not only do we owe it to our family to give them our undivided attention, but that we also need time to step away and decompress each day. I hope to remember to hang my work outside every evening this tax season.

Despite the deadlines and long hours, two of my favorite things occur in March: daylight savings time begins and March Madness unfolds. I like to think about being able to play catch with my boys

In continuing to channel my inner Doc Brown let me point out one more forward-thinking future event. The 98th Annual meeting of the ASCPA or, as it’s known now, Accounting Connections Conference, will be June 8 and 9. This year we will continue in a similar format to last year’s meeting with a full day on Thursday and half-day session on Friday. We will welcome our keynote speaker, current AICPA Chair Kimberly Ellison-Taylor. The biggest change this year will be the move to Montgomery. As we approach our centennial, we are already making plans and changes to the ACC to prepare for this 100 year milestone celebration. I’d like to invite you and encourage you to attend this year’s meeting. The education and the speakers will be outstanding, but the fellowship with our peers is even better.

I wish all of you a successful busy season. Thank you for allowing me to serve you as your chair.

Thank you volunteers for the Birmingham Chapter Tax Hotline on WBRC February 16: Robert Madison, Sara Propper, Kayla Frank, Delphine Ford, Beth Arnett, Marena Molay, Steve Emerson, Tom Zoebelein.

Jamey 4

HOW TO BREAK DOWN SILOS WITHIN YOUR ORGANIZATION

By Samantha White

The tendency to create silos is a natural human one.

People are surrounded by so much information, and so many people and processes, that they look for structures and classifications that can help them cope with the chaos and make life more efficient, says Gillian Tett, anthropologist, journalist, and author of The Silo Effect.

Yet, however natural this propensity might be, it often inhibits communication, innovation, and in some cases, the ability of businesses to remain relevant. The structural patterns created to suit one particular context can become outdated when the world outside moves on. Alternatively, the structures become so rigid that colleagues in the same organisation not only fail to share information and join the dots between their varying experiences or perspectives to gain insight, but also end up competing with each other, Tett explained during a recent lecture in London.

One of the many companies that fell victim to siloed thinking in the past is Sony, she said. The company’s Walkman was a hugely successful product in the analogue era, and its name came to define an entire consumer product category. The reason the company’s success didn’t translate into the digital era, said Tett, is that the company was organised into separate departments – one for software and computing, one for hardware, and one for music – all of which were in competition with each other.

The structure was rigid. Rather than collaborate, each department insisted on producing its own gadget, even though the world outside Sony was converging very fast. The competing products cannibalised each other, and the company could not maintain its dominance of the portable music player market in the digital era.

Information-sharing initiatives When organisations break out of those structures, valuable insights can be gained and outcomes achieved. Tett describes a project in New York’s City Hall to more accurately predict fire risk. The city government had traditionally been fragmented into separate departments with little information sharing or collaboration, but by bringing together

data held in various pockets, such as pest control visits and incidences of mortgage default, researchers created a much more effective basis for predicting where fires were most likely to occur.

It’s often that slack that allows people to stop and recognise the silos they are trapped in and to try to imagine alternatives. It’s where the silo-busting ideas are generated.

A similar approach was taken to detect the restaurants most likely to illegally dump yellow grease rather than pay a waste disposal company to remove it. Information about kitchen fires and cases of tax evasion were among the types of data brought together from different departments to identify likely offenders. The enforcement agency then linked up with another department involved in environmental waste recycling. Together they approached the restaurants and informed them of the fines applicable for dumping the grease, as well as how to avoid the problem and generate income by selling it to biodiesel companies – a successful outcome all around.

Initiatives to create layers of social connections require time and resources. But the long-term benefit is ultimately worth the investment. “If you want to be a good leader today, you need to have the courage to defend the slack,” Tett said.

Creating multi-layered networks Many companies implement management techniques to rotate staff and prevent employees from different areas from fragmenting and becoming tribal. For example, Facebook recruits, no matter how senior, are forced to go on a common six-week training course, Tett said.

Theoretically, the objective is to teach participants to code, but in practice the company is looking to create a common bonding experience for that cohort. Maintaining these relationships means employees have an additional layer of social connections on top of their one-dimensional team affiliation. Knowing people in other departments creates collision points where colleagues can swap information and ideas.

Breaking down social silos via Twitter Social silos are also barriers to knowledge sharing and innovation. They form when members of a department or profession only speak to people just like them, who all studied the same discipline at the same institution, use a specific kind of terminology, and look at the world through the same lens.

However, the most innovative teams have diversity not just of gender, ethnicity, and age, but also of skillset and perspective.

Part of silo busting is colliding with people who have ideas and viewpoints very different from your own. Tett said that social media can provide a way for people to break out of “intellectual and social ghettos”.

Many Twitter users have created a bespoke, comfortable tunnel of information that reinforces their world-view, where about two-thirds of the accounts followed belong to people from the same social or intellectual tribe, creating a sort of social silo, Tett said. She challenged the audience at the lecture to swap these likeminded people in their Twitter feed for people with a radically different world-view for two weeks.

Silo-busting ideas are generated in the ‘slack’ The first step for any organisation looking to overcome structural silos is to stop and think about how it classifies the world, Tett said.

“Try to see the world through their eyes and see what kind of information you receive with that perspective,” she said. ________________________________________

“The second step is to realise that we live in an era which worships efficiency and that we are under constant pressure to streamline and to specialise,” she said. “The problem is that when that happens, you cut out slack.”

Samantha White (swhite@aicpa.org) is a CGMA Magazine senior editor.

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CORPORATE CULTURE AND SUCCESSFUL LEADERSHIP Brent McClure, CPA Culture is probably a word you hear often if you follow blogs on entrepreneurship or read articles on business and management. What is culture exactly and how does it affect the company and its leaders?

Larger corporations are sometimes much more rule dependent and even slower than their smaller counterparts and this often breeds a very bureaucratic atmosphere. Think about the federal government, large corporations, and even highly regulated industries. Primarily these are large, slow moving entities with, on average, poor customer service.

In general terms, culture is how things are done, how decisions are made, and how the company is operated. According to Frances Frei and Anne Morriss at Harvard Business Review:

Max Weber was a member of the classical school of management, and his writing on bureaucracy is characterized by hierarchical organization, action taken on the basis of written rules, and bureaucratic officials requiring expert training. Career advancement depends on technical qualifications judged by an organization, not individuals. The style of leadership first began with the industrial revolution when, according to Weber, society was being driven by the passage of rational ideas into culture, which, in turn, transformed society into an increasingly bureaucratic entity.

“Culture guides discretionary behavior and it picks up where the employee handbook leaves off. Culture tells us how to respond to an unprecedented service request. It tells us whether to risk telling our bosses about our new ideas, and whether to surface or hide problems. Employees make hundreds of decisions on their own every day, and culture is our guide. Culture tells us what to do when the CEO isn’t in the room, which is of course most of the time.”

The leader of the bureaucracy is often referred to as the company man or company woman. The bureaucracy does not reward risk-taking, and thus the CEO probably was risk adverse on the way to the top. Contrary to the previous culture the identity of the employee is working for the company as opposed to working for a specific person. Many people love this culture because things do not change rapidly and for the most part it is predictable. Potential downsides exists in the fact of the sheer size and risk aversion that continually dampens the customer experience and overall agility.

In addition to understanding culture, one must also recognize that for leaders and managers to thrive in an organization, they must inherently grasp and believe in the culture. Let’s take a look at 3 main cultures we run into today and how they flourish in old-school and new-school companies.

Most entrepreneurial companies are started by a small group of individuals who have a few additional employees. The management style and subsequently culture is often autocratic or dictatorial. The owners feel empowered given they started the business, often created the idea, still own the business, and of course hold all the risk. Many times employees feel they are working for the entrepreneur as a person and not necessarily the company. If John Smith owns Wreckers-R-Us and is in the day-to-day management, then many of the employees will say I work for John Smith, as opposed to I work for Wreckers-R-Us.

A collaborative company is another culture and leadership style that we see more and more of today. In this scenario the boss is seen more as a coach and they work hard to develop their employees. The boss or leader has a softer approach to management and the primary goal is to serve the customer and do it well. The identity of the employee is linked to working in a team atmosphere or workgroup as opposed to an entrepreneur or the company. Equally, the person is closer to the department and the success of their team. This culture measures outputs (customer service, rankings, etc.) rather than inputs (headcount, time-clock, etc.) and changes occur by persuading the team that change or even a complete new direction is a good thing.

In order for the business to grow the founder normally must begin to release some control. Many times they will automatically instill policies, procedures, checklist and the other forms of control. However, they must be careful not to create a bureaucratic environment that could stifle the growth plans.

One major value is solving problems together, whereas two or more minds are better than one. Similar to the autocratic environment,

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risk taking is rewarded and learning is accomplished by trial and error. Most would agree the collaborative approach is the best overall, however, one major hurdle is actually achieving a collaborative spirit has proven to be difficult.

Perhaps an easier way to view and analyze a company’s culture is grouping the company into an “old-school” versus “new-school” bucket. The old structure tends to be more hierarchical or bureaucratic, while the newschool companies are organized as teams and are more collaborative in nature. Imagine the difference between a corporate meetings at General Motors compared to one at Google.

On extreme opposite ends of the spectrum we are comparing room full of suits to folks in sandals.

The core principals of the old-school companies are much like the bureaucratic culture mentioned above. Primarily made up of standards, rules, specialized, alignment, planning and control as well as the use of flashy rewards (company car, retirement watch, etc.).

Think of industrial plants, big-box retailers, the Federal Government.

A new-school company is most likely more broadly organized and departments now function as teams. These teams are armed with decision making ability and collaboration is key and redistribution of power breeds flexibility, innovation and boosts the overall employee engagement. Suggesting that rather than a ‘top down’ approach or hierarchical structure, authority should be moved down the organizational chart and out to the teams.

Think of companies like Facebook, Southwest Airlines, and Google, not just for the cool employee perks we all hear about, but for the team environment, risk tolerance, and nimbleness.

modern company requires its executives to be excellent leaders of people and not just great managers of things. Leadership of people is essentially a separate and sometimes complex subject that must be learned to reach our pinnacle as successful financial executives.

We can relatively quickly learn how to manage things, but the difficult intricacies of leadership are far more challenging to master. In addition to this, the company culture plays a heavy role in the tone at the top or maybe there isn’t really a top.

In circling back to the three types of culture discussed herein, while managers can certainly perform well only in autocratic or bureaucratic mindset, leaders must often be collaborative as well. Take for example a manager instructing the workers on exactly what to do next. In the background, the manager assumes he or she has the most knowledge and understanding of what needs to happen and when it needs to happen. In the same scenario with a leader at the helm, he or she may spend time collaborating with the team to chart the best path forward. We can think of leaders as moving the ball forward to innovate and defy the norms, while managers are often simply maintaining the average, however that may be defined.

Additionally, one of the most important differences between an old-school and new-school company is how they approach management and leadership. This topic actually dates back 40 years when an innovative management consultant, Robert Greenleaf, wrote his pivotal piece, “Servant Leadership.”

He claimed the servant leader is servant first and then the conscious choice brings one to aspire to lead. Greenleaf believed that institutions should serve people, not the other way around. He also felt that he was on the threshold of an important paradigm shift in the collective American response to formal authority.

Is leadership any different from management?

Actually they are vastly different and while leadership is actually an important part of overall management, the two terms should not to be used interchangeably. Today’s more 7

As Greenleaf pointed out, influence and inspiration separate leaders from managers, not power and control. Nevertheless, to be a great leader, you must also be a great manager.

One must intrinsically manage time, talents, and many other resources while also devoting efforts to moving the team forward.

As Peter Drucker is often quoted as saying, “culture eats strategy for breakfast.”

Undoubtedly, ensuring leadership, management, strategy, and the company culture all blend cohesively is the true formula for success no matter the underlying culture of the company.

Brent McClure is a CPA, consultant, instructor and CFO. He is currently licensed in Alabama and Mississippi, holds a CGMA and has an MBA from the A.B. Freeman School of Business at Tulane University. While maintaining his own practice, he is also the CFO of Chalkable, Inc., a company in the ed-tech space.

meet Fred

Mr. Johnson was recently recognized as Northeast Alabama Community College Alumnus of the Year. He is the Chief Executive Officer of Farmers Telecommunications Cooperative headquartered in Rainsville, Alabama. The Farmers Telecommunications Cooperative (FTC) is the largest member-owned telecommunications cooperative in the state of Alabama, serving thousands of homes and businesses across DeKalb and Jackson counties.

fell in love with them and the work they did. My dad was always involved with the local co-ops and the cooperatives in our area: phone, electric, farm, federal land bank and they had a huge impact on my life. Because we lived in a rural area, these organizations played a significant role in school programs, both within formal education and also in 4H and other extracurricular activities. So not only was there a lot of opportunity for me to work closely with co-ops, I already had some experience and knowledge of them. I left public accounting to work for Sand Mountain and then came to Farmer’s Telecommunications Cooperative 23 years ago, the last 15 years as its CEO.”

Fred Johnson grew up in Mentone, Alabama, and settled on a career in accounting very early, right after graduating from high school. He knew he wanted a career in business and thought about what aspect of business really dug down to basic principles.

Ultimately, he decided that accounting was the only discipline that would satisfy his need to truly understand business operations from the ground up.

He went off to college at Southern Wesleyan University in Central, South Carolina, a small school with an outstanding academic program and strong focus on the integration of faith, learning and living.

At SWU, several mentors made a lasting, life-long impact on his life. Don Wood was dean of students and Johnson met him while working as a resident assistant.

DeKalb and Jackson counties, which FTC serves, really suffered during the most recent economic recession. As the co-ops of the past had done, FTC stepped in to support the community’s return to economic wellness. Part of their commitment to attracting businesses to the area was building a state of the art fiber optic network, substantially completed on the last day of 2015. The network meant an enormous capacity for all kinds of communication streams, which, as an example, would enable efficient telecommuting for residents working in large insurance firms in Chattanooga.

Fred Johnson

“He had an extraordinary effect on my life and professional career. Don Wood taught me the importance of attitude and reasoning. To question whether a particular path or decision aligned with my values. Ken Whitener was my first professional boss at the SWU student bookstore. I managed it as an undergraduate student and he would constantly quiz me. “Are your ducks in a row?” He actually called me up about 2 or 3 years ago to ask me if my life was in balance. My work life? My personal life? He helped to instill the value of hard work, attention to detail and integrity in thought, word and deed.” Dave Medders was another of Johnson’s most significant mentors. “He stressed to me that all good things which came to me were merely opportunities to reflect my faith in service.”

“We’re proud of what we’ve built here and think it stands up to any other network across the state.”

Johnson finds it ironic that his rural telecom has embraced technology so whole-heartedly.

“Technology has really been the revolutionary element in transforming accounting. I actually was introduced to data processing when you programmed by punch card! I have literally witnessed going from pen and ink general ledgers, typing tax returns and manually entering checks in a ledger to the current state of broadband-enabled automation and technology. The biggest impact? How I spend my time. I can analyze more data, in real time, enabling me to make critical decisions.”

Years after graduating from SWU, Johnson returned home and attended Northeast Alabama Community College to gain a better foundation in math before beginning graduate school at the University of Tennessee at Chattanooga.

Johnson began his career in public accounting with Gant Croft & Associates in Scottsboro. “One of my clients was Sand Mountain Electric Co-op and I

That very fact is also a soapbox issue for Johnson.

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MEMBER PROFILE

“Production of accurate financial information is not enough. The information must be useful in business decision-making. To that end, our information must be accurate, timely, and relevant. Miss anyone of those three and you are wasting resources. For accountants who really grasp this, it is empowering and liberating. Imagine the satisfaction of knowing that what you do is far more than just producing a record of what happened. You are actually providing the data that should lead to the success of your company moving forward. That’s pretty cool. As an accountant in earlier days, making sure that data was precise meant that it was too dated to be meaningfully implemented.”

It is the challenge of his industry, the energy and talents of colleagues, and the sense that the company really does make a difference in the quality of life within local communities that inspires him every day. Away from the office, Johnson likes to play the piano for his own pleasure and at worship services at his church. One of his retirement goals is to study classical music to keep his skills sharp. As a contrast, he also likes to go to a target range and shoot pistols.

When questioned about what keeps him up at night he replied, “Regulation!

We never know where it’s headed and we have limited control over its effect on our businesses.”

Johnson also feels strongly about becoming a member of the ASCPA and remaining a member over time. Despite the fact that he’s been in industry since the middle 1990’s, he has always considered himself first and foremost a CPA.

Johnson’s personal life is marked by “my terrific wife of 36 years, three amazing children, top-notch son-in-law and daughter-in-law, and two adorable grandchildren. In all seriousness, I must give the good Lord credit for the opportunities I’ve been given because, simply put, I’m not that smart.”

“I’m really proud of that heritage and the sense of being part of a professional community. Society membership is just an extension of that.”

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Jeannine P. Birmingham President and CEO

Welcome to the Business and Industry issue of CONNECTIONS. 32% of ASCPA members are in the corporate world: manufacturing, real estate, banking, healthcare, utilities, schools, farming and non-profits are just a few of the wide range of businesses you represent. We know that business and industry CPAs have different interests and needs than those in public accounting and our education department is committed to high quality options for you. See the listings for 2017 education designed for you on pages 20 and 21. Education Director Jessica Roberts and the B&I Committee thoughtfully created this curriculum and we hope to see you in class frequently this summer.

ASCPA 2017

evidenced by the record number of nominations for open board positions we received in January. Thank you to everyone who sent in a nomination. The process has given us an opportunity to get to know some of you better and to realize what tremendous human capital exists within the membership! You’ll see the nomination report on page 22 to prepare you for voting at the annual members meeting on June 8 and 9.

Speaking of our annual meeting, the Accounting Connections Conference (ACC), it will be in Montgomery this year, at the Renaissance Hotel and Spa downtown. If you haven’t been to Montgomery in a while, brace yourself. The area of Dexter Avenue, from the fountain at Court Square to the Capitol, is in the midst of huge changes. It is getting a makeover that Commerce Street, leading from the fountain to the train shed and Alabama River, has already experienced. New restaurants, bars, the Biscuits stadium, the Montgomery Performing Arts Center, food trucks and music events at the amphitheater have all contributed to making downtown THE place to be. Registration is open for ACC. Get signed up and plan to bring your family. There are plenty of attractions close by, the Alabama Shakespeare Festival and Montgomery Museum of Fine Arts are 15 minutes away. Our Montgomery Zoo is excellent.

We’ve involved B&I members as contributors to this issue, and recommend Brent McClure’s article on culture and leadership as well as ASCPA Chair-elect Marc Hamilton’s take on big data on page 26. As an ASCPA Board Member, Marc constantly challenges us to look at what technology can do for the Society as an association and as a network of members. That encouragement and support have been of tremendous value, especially when the Board of Directors is contemplating technology upgrades for the ASCPA. We recently had a consultant assess our efficiency and effectiveness as an organization and that evaluation has triggered some needed changes.

We are also soon to launch a new platform within ascpa.org where members will have dedicated communities to post questions, connect to members and learn about ASCPA programs specific to their interests. Development has taken several months, yet we look forward to testing Higher Logic this spring with a full launch in early summer. Communities will offer an additional resource that every member can use to increase your connectedness to other members. We think it will especially benefit members in B&I, since you tend to be one of only a few CPAs (sometimes the only one!) in your organization.

You can tell I’m pretty excited about the direction our capital city has taken in the last couple of years. I can’t wait to welcome you here in June.

Take the time to read the profile of Fred Johnson on page 8. He’s a longtime member of the Society and really made the case for staying involved as a member in business and industry. “My identity is not that of a CEO of a telecommunications business.

It’s first and foremost as a CPA.” As always, let me know how I can help you and your organization.

ASCPA Chair Jamey Carroll and I rely on your feedback to shape the future of the Society.

Yes, that was one of the topics on the table at the most recent meeting of the ASCPA Board on January 27. Lively discussions, meaningful conversations, consideration of resource use are all aspects of our quarterly meetings these days. The fact that our board is not a “rubber stamp” board, that it actively engages in governance of the Society, is not a well-kept secret! That was

Jeannine 10

GULF SHORES CLUSTERS Visit The Beach Club in Gulf Shores June 20, 2017 through June 23,2017 to earn up to 32 hours of education. This four-day event allows you to choose from a variety of timely tax, A&A, and other topics -- find all of the courses listed below. With plenty of education and downtime, we can help you keep work/life balance in check!

002 U.S. GAAP: Latest Developments for Business & Industry 6/20/2017 | 8:30am-12:00pm | AA Instructor: Brent McClure

009 Individual Income Tax Return Mistakes and How to Fix Them 6/21/2017 | 8:30am-12:00Pm | TX Instructor: Michael A. Frost

015 S Corporation Taxation: Advanced Issues 6/22/2017 | 8:30am-12:00pm | TX Instructor: Michael A. Frost

021 Reviewing Partnership Tax Returns: What Are You Missing?

6/23/2017 | 8:30am-12:00pm | TX Instructor: Michael A. Frost

003 Top Five Tax Topics of 2017 6/20/2017 | 8:30am-12:00pm | TX Instructor: Michael A. Frost

010 Preparation, Compilation, and Review Engagements: Update and Review 6/21/2017 | 8:30am-12:00Pm | AA Instructor: Gene Ristaino

016 The Bottom Line on the New Lease Accounting Requirements 6/22/2017 | 8:30am-12:00pm | AA Instructor: Jeff Lieman

022 Data Breaches & Other Cyber Frauds: A 21st Century Risk to Your Organization 6/23/2017 | 8:30am-12:00Pm | Other Instructor: Jeff Lieman

004 Accounting and Auditing Update 6/20/2017 | 8:30am-12:00pm | AA Instructor: Gene Ristaino 005 Lean Accounting and Management: Saving Money by Streamlining Operations 6/20/2017 | 1:00pm-4:30pm | Other Instructor: Brent McClure 006 Critical Tax Factors in Business Life Cycle Decision-Making 6/20/2017 | 1:00pm-4:30pm| TX Instructor: Michael A. Frost 007 Internal Control: How Does It Impact an Audit?

6/20/2017 | 1:00pm-4:30pm | AA Instructor: Gene Ristaino 013 Interpreting the New Revenue Recognition Standard: What All CPAs Need to Know 6/21/2017 | 1:00pm-4:30pm | AA Instructor: Gene Ristaino

011 Thriving in a Chaotic Environment: Planning and Strategy Formulation for Your Organization 6/21/2017 | 1:00pm-4:30pm | Other Instructor: Brent McClure 012 Meet Your Next Migraine: Five Critical Issues that Will Confront Tax Public Accountants in 2017 6/21/2017 | 1:00pm-4:30pm | TX Instructor: Michael A. Frost 008 Business and Industry Roundtable 6/22/2017 | 8:30am-12:00Pm | Other Instructors: Marc Hamilton and Brent McClure 014 Controller’s Update: Today’s Latest Trends 6/22/2017 | 8:30am-12:00pm | Other Instructor: Brent McClure

017 Employment Law Update: Reducing Employer Liability 6/22/2017 | 1:00pm-4:30pm | Other Instructor: Brent McClure

023 Meet Your Next Migraine: Five Critical Issues that Will Confront CPAs in Industry in 2017 6/23/2017 | 1:00pm-4:30pm | Other Instructor: Brent McClure

018 S Corporations: Compensation and Redemptions 6/22/2017 | 1:00pm-4:30pm | TX Instructor: Michael A. Frost 019 The Most Common Financial Statement and Asset Fraud Schemes: How to Detect and Prevent Them 6/22/2017 | 1:00pm-4:30pm | AA Instructor: Jeff Lieman 020 Innovative Forecasting & Budgeting: Moving Beyond the Traditional Techniques 6/23/2017 | 8:30am-12:00pm | Other Instructor: Brent McClure

024 Reviewing S Corporation Tax Returns: What Are You Missing?

6/23/2017 | 1:00pm-4:30pm| TX Instructor: Michael A. Frost 025 Forensic Investigations: Key Tools to Success 6/23/2017 | 1:00pm-4:30pm | AA Instructor: Jeff Lieman

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ZOEBELEIN ON TAX

THE LIMITED LIABILITY COMPANY IS IT BECOMING A VICTIM Tom Zoebelein, CPA

OF ITS OWN SUCCESS?

Just like the smell of rain in the air before a summer shower, there is something in the wind indicating partnerships are under increased IRS scrutiny. The limited liability company blends the best attributes of the corporation and the general partnership, leaving both corporate inflexibility and the unlimited liability of the general partner on the cutting floor. This powerful blend of attributes has caused a shift away from the traditional corporation [structure] to LLCs for new business ventures. What has emerged is what the General Accounting Office refers to as the large partnership (100 or more investors and balance sheets of $100 million or more). The LLC’s popularity as the entity of choice for large business groups was documented in the GAO’s July 2014 report, where the number of large LLCs more than tripled during the period 2002 through 2011, according to their study. Has this trend toward the large LLC brought all LLCs into the IRS crosshairs, including many of our clients’? Does recent IRS activity give any indication of what we might expect to see in the future?

Embarrassed IRS Gets New Audit Rules The Government Accounting Office’s July 2014 report expressed concerns that this large partnership group were audited at a rate of less than 1%, compared to the 27% audit rate for corporations of comparable size. This failure was due in large part to the ineffectiveness of TEFRA rules and the lack of electing large partnerships. Armed with the GAO report, the U. S. Treasury Department petitioned Congress, resulting in the new partnership audit rules contained in the Bipartisan Budget Act of 2015, passed in November 2015.

The act also repealed both the TEFRA audit provisions and the electing large partnership rules, but blended parts of both in the new rules.

The new audit rules are slated to become effective for tax years beginning after December 31, 2017 by the 2015 act.

Treasury issued proposed regulations on January 18, 2017, prior to being reported in the Federal Register. The proposed regulations scheduled to be reported in the Federal Register were rendered null and void by President Trump’s moratorium on the issuing of new regulations. The proposed regulations cannot be reproposed as currently written and will need rewriting after the moratorium expires. I am not sure what, if any, impact this will have on the 1/1/18 effective date.

partnerships/LLCs.

IRS LB&I Group Began Reorganization in 2015 - Will it Spell More Partnership Audits?

The IRS Large Business and International Division (LB&I) announced a plan to reorganize in September of 2015. LB&I group focuses on corporations and flowthrough entities with assets over $10 million. The “LB&I case group,” a select cadre of highly trained IRS Agents, have in the past been selected to examine the largest corporate entities with very complex tax issues.

— IRC 48C Energy Credit Campaign — Micro-Captive Insurance Campaign — Related Party Transactions Campaign — Land Developers - Completed Contract Method Campaign — S Corporation Losses Claimed in Excess of Basis Campaign

The LB&I reorganization appears, from what I have read, to increase their focus on midmarket taxpayers (assets ranging from $10 million to $250 million). Their change in focus may be in preparation for the 2020 examinations under the new audit rules taking effect next year. I had two LB&I audits in 2016 and the agents told me they were assisting the Small Business & Self-Employed Examination group by taking on some of their examinations. Our clients fit the midmarket criteria, so this may only be the beginning of what is to come. There are now LB&I Agents in each IRS regional office, and the midmarket group was shifted from examining large corporations to the examination of 12

A word of caution: this group of examiners is very detailed and knowledgeable. The examination will be much more formal, with prescribed procedures (see Pub 5125 for the rules). LB&I examinations will be more issue-based. If your client is audited by this agent group, the agent may raise issues you had never considered when filing your client’s tax return.

The following are some of LB&I’s 2017 audit campaigns that may affect our clients:

2016 The Year of the IRS Liabilities Allocation Crack Down • Disguised Sale Loophole Sewn UP — A holdover from the general partnership days, allocated partnership debt is treated the same as cash contributed (and cash distributed when allocation debt decreases). Debt basis allows cash distributions and expense allocations in excess of actual capital.

On October 4, 2016, IRS Regulation defeated what I call the debt shell game, where debt allocation was used to defeat the two year disguised sale rule. Under the scheme, the member contributes appreciated property into the partnership with debt, or new debt is allocated to the contributing partners. The contributing partner receives a cash distribution (debt proceeds), covered by his specially allocated partnership debt sufficient to cover the distribution.

This Regulation now prevents this special liability allocation, and requires the partner to be restricted to his or her profit sharing ratio for a disguised sale purposes (there is a 10% or $1,000,000 exception for the debt assumed for this purpose).

• Don’t Bet Your Bottom Dollar It Is No Longer Recourse Debt — You will recall recourse debt allows special allocation of losses/expenses based on the partner’s share of recourse debt. The new regulation attacks multiple members using the same debt as recourse for partnership expense allocation purposes. The regulation targets the situation where each partner incrementally guarantees a portion of partnership debt. Prior to the new regulation each would take their portion of the guarantee as recourse debt. Under the new regulation, only the partner guaranteeing 90% of the debt can treat the debt as recourse.

In addition, the partnership must now file Form 8275 to disclose the bottom dollar arrangement.

IRS Tells Partners/Members They Are Subject to SE On Their Allocable Partnership Income. Very Few Are Exempt The IRS has also taken a closer look at what portion of partnership income is subject to self-employment taxes. The IRS takes the position that for SE purposes all partners/members are treated as general partners. IRS puts forth the position that only limited partners are exempt from SE tax. The IRS then defines the limited partner narrowly so that only the partner/ member who is a mere investor, similar to investing in publicly traded stock, qualifies.

Even if the parties actively elected out of partnership treatment, as in the 2015 Methvin and Perry case, the IRS still assesses SE tax. The agreement in Methvin and Perry was a joint venture in an oil and gas interest. The operator of the venture did 100% of the work. The taxpayer and the operator signed an operating agreement acknowledging the taxpayer to be a mere investor with the operator being the sole operator of the venture. Desiring joint venture treatment, the operating agreement made a positive

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election out of Subchapter K (partnership code section). 1 Despite the language in the operating agreement, the U.S. Tax Court justice deemed a partnership to exist, with the non-operating taxpayer as a general partner. As a general partner, all income from the oil and gas venture was subject to SE tax, regardless of the level of participation by the taxpayer. The taxpayer’s $690 SE Tax assessment was sustained in U.S. Tax Court, despite the taxpayer being merely a passive investor.

The Chief Counsel Advice Memo 201640014 was the most disturbing of all the partnership SE cases. Here the taxpayer was in the franchised food services business with multiple locations.

The group was structured with ownership by the taxpayer, his wife, and a trust. The franchise agreement required the taxpayer to actively be involved in the business, and to this end the taxpayer received a guaranteed payment, in which he self-assessed SE tax. The business also required other employees to be the primary managers at other locations. The taxpayer tried to bifurcate his ownership

into the active and limited portion, and claimed to be a limited partner for the portion of the business managed by others, and therefore SE tax exempt.

The Chief Counsel memo examined the development of case law that reached the conclusion that only limited partner investors (defined above) met SE tax exemption. The taxpayer conceded he was not a limited partner under that test. The taxpayer’s second argument was that he, for purposes of SE exemption, possessed both a general and limited partnership interest. The general partnership allocated income was reflected in the guaranteed payment (traceable to his efforts), while his limited partnership interest reflected the efforts of others, plus a return on his investment in the partnership.

The taxpayer cited the T.C. Memo.

2016-20 (PC Law firm excess comp. case) and a string of earlier corporate excess compensation court cases.

These cases categorized PC income into those same three categories of income.

Chief Counsel slammed the door on compartmentalizing allocated partnership income by stating that reasonable compensation is an issue exclusive to corporations, and as such has no relevance to a partnership/LLC (Brinks case).

Chief Counsel goes on to say that for purposes of self-employment taxes, all partners are treated as general partners and taxed on their allocated partnership income, unless they are exempt limited partners. The limited partner exemption from SE tax has a very “limited application, as it was intended to apply to those merely invested, rather than those [who] actively participated and performed service for a partnership in their capacity as a partner” (acting as a self-employed person). Absent electing to be an association taxed as a corporation, there is nothing in recent case law that stands for a capital-intensive or a service partnership to acquire corporate treatment for self-employment tax purposes. Chief Counsel stated that even in a capital intensive joint venture (Methvin and Perry Case above), where all the work was

performed by the other party, the passive investor was deemed a general partner for SE tax purposes.

Be extra careful in preparing your clients’ Form 1065, as there are some dark clouds on the horizon, and the wind is starting to blow.

All signs point to a major hurricane brewing.

It is time to batten down the hatches before the full weight of storm is here. ________________________________________

is reported on schedule C subject to SE tax. Electing out of Subchapter K makes the arrangement a joint venture instead of a partnership. As a joint venture income and expense are allocated based on percentage ownership therefore, the working interest should have been reported on schedule C subject to SE Tax. By the court recasting the joint venture as a general partnership for SE purposes the investor was subject to SE tax on his allocable share of partnership income. I question the need for this move as the taxpayer was already subject to SE tax

This case is cited in Chief Counsel’s memo but

on the income from a working interest in an oil well.

appears to me to be a bit misleading. A working

This was true regardless of whether he was merely a

interest in oil and gas in contrast to a royalty interest

passive investor.

1

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TAKING THE LEAP AND SOLVING PROBLEMS. Susan Wright, CPA After working in private company accounting and auditing, and subsequently working for a CPA firm, I finally decided that I was ready to make the jump and be my own boss – I love what I do, but wanted to do a job on my terms. Could I make it work? Would I be able to eat something other than peanut butter and jelly? As it turns out, things went my way and the decision was a good one for me.

Consulting isn’t for everyone – it involves risk and planning. Despite those upsides, it still continues to appeal to me on so many levels.

I have a constant craving for challenges and new learning experiences that I couldn’t find sitting behind a desk, or working for a big corporation. As a consultant, you never know from one month to the next what is coming around the corner – big/small client…. impossible deadlines…. a creeping scope of work? My job is like a giant puzzle, and in order to perform it successfully, I have to figure out how to make the pieces fit together. My favorite days are when I get to help someone figure out a solution to a difficult problem, or find that last penny so the general ledger reconciles perfectly. I really like the questions I can answer!

Working in accounting (both public and private) teaches you a lot of valuable things, such as how to communicate with everyone from the CEO to the AP clerk, or even how to be a part-time therapist by just listening.

I realized I wanted to continue to build relationships with my clients on my own, where I could provide guidance and support for very difficult tasks, like accounting system implementations or conversions. Having gone through major software conversions myself, it offers me the ability to empathize with what the clients are going through, as well as help them to have confidence in their ability to handle it.

In my consulting practice, almost all of my clients have the same two complaints – how do I get my employees to fill out their timecards every day?

And how do I get my subcontractors to invoice me in a more timely manner? Now, let me go on record as saying I am the poster child for being late on filling out my timesheet, BUT if a company really wants to address this issue, it has to come from the top – management has to implement and enforce stricter rules for timesheet compliance. I had one client which implemented the 3 strike rule for timesheet offenders – strike 1, timesheet training – strike 2, additional timesheet training and a write up with HR and strike 3, termination.

It took management’s actually firing an employee for the rest of the staff to take them seriously. But most companies aren’t going to draw that hard of a line, so it falls on the accounting staff (i.e. payroll) to enforce the timesheet rules. And, unfortunately, I often find that project managers who approve the timesheets aren’t really reviewing them before approving, so they end up “managing by invoice” and hold up the billing process because that is when they find the timesheet errors to be corrected. While there is no “one size fits all” fix for this issue, I can tell you that without upper management support and enforcement, this issue will continue to be a problem for everyone.

As far as getting subcontractors to submit their invoices in a more timely manner…. well, that one can get a little more difficult.

Not only does this take project management involvement, but it often takes multiple discussions with the subcontractor and upper management to come to an agreement. I advise most of my clients to address this on the “front end” and ensure the invoicing terms 15

are clearly stated on the purchase order or in the contract. Everyone has to be aware of when the invoice must be received and why this timing is so important. Many clients have implemented the “Pay When Paid” terms, which mean that the subcontractor does not get paid until the customer pays the invoice – this means if the subcontractor is habitually late with invoices, they can go up to 60-90 days without payment. Like the payroll example, there isn’t one solution which fits everyone, but I can tell you this – the companies that handle timesheets and subcontractor invoices with the least number of issues are the ones with the strongest upper management support and the better inter-departmental communication skills. Regularly-scheduled meetings between accounting, contracts, project management and purchasing can ensure a better understanding of what each group requires to process transactions in an accurate and timely way. It also helps to ensure that company staff aren’t setting up the company to fail by entering into agreements that are poorly structured.

No matter what accounting position you work in – CFO, AP clerk, billing manager or even consultant, there are few things that will help you more than good communication skills, patience and a healthy sense of humor. A nice margarita helps too, sometimes! Let’s toast to your debits = your credits!

Susan R. Wright, CPA, has 20+ years’ experience in private and public accounting and currently works as an independent consultant for companies who do business with federal, state and local governments. She resides in Huntsville with her 3 dogs, enjoys spending time with her family and friends and plans to actually start a diet one day real soon.

THE LEHMAN DECISION Smith, was an member of the American Institute of Accountants, but not a licensed CPA. However, all of the principals in their New York office at 54 Wall Street held New York licenses.

Third in a series of articles about the history of the Alabama Society of CPAs.

Dr. Jan Heier, CPA

Introduction: Since the late 1930s, the standard set by the accounting profession for a CPA to complete an audit was to be independent from the client in both “fact and in appearance.” Even with that simple definition, the AICPA has had a long history of attempting to interpret its meaning. In the early part of the 1920s, however, the accounting profession apparently understood the theory of independence, but it took a Supreme Court decision (J. Harrod Lehmann2 v the State Board of Accountancy) to begin the long process toward institutionalizing the concept.

During the September 1921 ASCPA annual meeting held, again, in Mobile, cracks in administration of the 1919 CPA law were becoming apparent with several ethics issue. The first dealt with ASCPA member and the organization’s first president, Henry. S. Miller, who had apparently been charged with forgery. Members at the 1920 annual meeting designated the council to investigate the matter and eventually issued a letter to the membership (Exhibit A) with two of the five council members asking that Miller be removed from membership. This was promptly accomplished through a unanimous motion to the membership on hand. Miller held Alabama license #6 which was revoked by the Board in 1922.

Early CPA Ethics Problems in Alabama: The saga of Mr. Lehmann’s dispute with the Alabama State Board of Public Accountancy (ASBPA) began in 1919 when he earned CPA license (#21) after passing the first CPA exam administered in the state. Although new to the public accounting profession, Lehmann actually worked as an accountant and auditor in Birmingham where he started J. H. Lehmann & Co. in 1912. His offices were located in the Jefferson County Bank Building.3 According to court documents, Lehmann, plaintiff in the lawsuit against the Board, indicated that “by experience and assiduous attention to his duties built up a large and lucrative business.”

Of the three that did not sign the letter, Mr. Harden had already announced his retirement at the 1921 meeting, and resigned from the council. Mr. Percy Wright’s certificate had also been revoked and he was removed from the Society’s roll for mishandling ASCPA funds as the Society’s first secretary-treasurer. Finally, Mr. Lehmann may have also been in trouble at this point because, as the meeting progressed, Frank Latady, chairman of the ASCPA council, reported problems in, “connection with an audit of the books of the City of Birmingham, and of certain irregularities in the [audit] report prepared by Mr. Lehmann, dealing with the matter of handling Government Food Supplies.” Later court documents revealed that Lehmann may have lost his certificate due to a lack of independence (and a possible defalcation) in completing an audit for the Traylor Optical Company in the city of Birmingham (with no mention of government food supplies). At this point, the meeting passed a motion to refer the matter “to the incoming Council with the power to act.” Because the Council would not meet for another year, the State Board would act first late in November 1921.

The Alabama Society of CPAs (ASCPA) organizational minutes of the first Annual meeting held in Mobile in September 1919, showed that Lehmann played a prominent role in the proceedings of the new organization by being elected to its five member council. In addition, he made several motions, including one asking the ASCPA to take out advertisements in most of Alabama’s major cities listing the members of new Society and the nature of state’s new CPA law. In a “future” irony, he also asked Myer Aldridge, the current chair of the ASBPA to take up “ethics matters” with the Alabama Attorney General as to the accounting practice by “Loomis, Suffern, and Fernald,” a New York based CPA firm with an office in Birmingham’s First National Bank Building.4 Unfortunately he did not outline his concerns, but it was known that the firm’s local manager, F. Hopkinson

Legal Action and its Results: According to court documents, on November 17, 1921 the State Board sent Lehmann a letter outlining his transgres16

sions as required by the state law. In the letter, the Board referred a complaint from one J. F. Kastner (a CPA for the Birmingham office of a Chicago accounting firm, P. L. Crawford) who asked the Board to revoke Lehmann’s certificate due to improper auditing procedures at Traylor. It should be noted at this point that the documents never explain how Mr. Kastner knew of Lehmann’s “internal” relationship with the audit client.

The primary issue focused on Lehmann’s acting both as the secretary-treasurer of the client and also as its auditor.

In addition, he had direct access, as a designated signer of checks, to Traylor’s accounts from which he “borrowed” a total of $4,700 between October 1919 (after he received his certificate) and January 26, 1921. In his rebuttal, Lehmann presented an affidavit from the owner of the business, Mabel B. Traylor, indicating that she knew of, and apparently approved of, the withdrawal of funds. To him, this settled the issue, affirming that he had done nothing wrong. In addition, Kastner also charged (or strongly implied) that Lehmann ignored the “inflated” value of the Traylor’s inventory and took a $2,000 “bonus” from the company to look the other way when he closed the books on December 31 1920.

Lehmann denied this and specified that he relied on the inventory figures from company personnel “upon whose [expert] judgment he had the right to rely.”

to revoke a certificate in Section 7, Lehmann felt that the Board’s lack of due process procedures made this clause ineffective and unconstitutional. 5At the ASCPA’s September 1922 annual meeting in Birmingham, the minutes noted that the efforts of J. H. Lehmann, a member of the Alabama Society, to have the CPA law of the state “declared unconstitutional, in connection with charges preferred against him before the [Board], were unanimously disapproved by the entire membership and … he was expelled from the [Society]”.

The minutes also noted that the “Lehmann case was reported before the U.S. Supreme Court.”

Exhibit A — Council Letter about H. S. Miller

Based on Kastner’s complaint, on JanExhibit B — Title bars of the State and Federal Supreme Court Rulings uary 21, 1922 the Board revoked Lehmann’s certificate. Without using the term “independence,” they must have seen Lehmann’s actions as a breach of professional ethics where the auditor was reviewing the work that he actually completed. Lehmann now took the only recourse available to him: he sued the members of board to force them to reinstate his certificate. Within the suit, it was alleged that the Alabama CPA law was unconstitutional because it denied his ability to carry on the profession that he had practiced for a number of years before getting a state-sanctioned CPA certificate. In addition, even though the Exhibit C — Final Paragraph of Supreme Court Decision original law gave the Board the power 1 2 3 4 5 6

This nearly eighteen month journey to the Supreme Court of the United States started in February 1922 in Montgomery County circuit court before Judge Walter B. Jones Jr. Originally, the judge instituted a temporary restraining order against the revocation of Lehmann’s certificate. After a further hearing on April 21, 1922, Judge Jones vacated his order and ruled against Lehmann, citing state law that held Board members were agents of the state and, like any other licensing board, have the responsibility to regulate the actions of the profession. As a result, Lehman directly appealed to the Alabama Supreme Court for review.6 About the same time, Judge Jones also ruled against Henry Miller and Percy Wright sending both cases to the higher court.

On June 29, 1922, the Supreme Court of Alabama (208 Ala. 185) (Exhibit B), by a vote of eight to one, affirmed the ruling of the circuit court and held that the State Board of Accountancy can indeed regulate the use of the CPA designation, ostensibly because the “legislature may delegate to its own appointed administrative agencies legislative discretion as authority to make such minor rules and regulations as are necessary or appropriate for administration and enforcement of the general laws”.

Lehmann and his attorneys proceeded to appeal the opinion to the United States Supreme Court based on two _________________________________ (continued on page 35)

The materials for this article mostly came from ASCPA board and meeting minutes and court documents from Montgomery County Case 2486 (April 1921) that is held in the Alabama Department of Archives and History in Montgomery.

Records alternatively use J. Harrod and J. Harold as spelling of the name of story’s central figure. Harrod apparently is the correct spelling.

The firm continues to exist today as Lehmann, Ullmam, and Barclay, LLP located in Birmingham.

As a side-note, this firm would merge into Lybrand, Ross Brothers and Montgomery in 1958 which would eventually become Coopers and Lybrand and then PriceWaterhouseCoopers.

Henry Miller also filed a lawsuit over the revocation of his CPA certificate over the forgery charge brought by the Board.

Available court documents do not assert a claim conflict of interest on the part of the Judge as a cause for the appeal even though this same Judge Jones was instrumental in helping the CPA laws get passed in the in February 1919 when he was in the legislature..

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The Accounting Connections Conference is coming to Montgomery, Thursday, June 8 through June 9, 2017.

The Annual Meeting of years past is now the Accounting Connections Conference. Join the Alabama Society of CPAs in Montgomery, Alabama at the Renaissance Montgomery in the heart of the City of Dreams for another year of the reimagined Annual Meeting.

another day of opportunities for students, educators, Young CPAs, and firms. Featured speakers include AICPA Chair, Kimberly Ellison-Taylor, Jim Martin, CPA, CGMA, ASCPA Chair Jamey Carroll, Alabama’s very own Mike Frost, CPA and Bruce Ely and the Bradley Arant Boult Cummings Team.

In 2017 you and your colleagues can look forward to NEW education tracks, one full day of A&A and tax education, evening awards presentation, Celebration of Success, and

Dream big in 2017. Start at the Accounting Connections Conference—www.ascpa.org/GetConnected.

THURSDAY, JUNE 8, 2017 | Day One MORNING SESSIONS

8:00 am - noon A. Public Accounting Track (A&A): Firm Evolution, Change Management, and Auditing in the Future* B. Business and Industry Track (Other): Excel Budgets, Accounting Software Tech Update, and Power BI

NETWORKING LUNCHEON & ANNUAL BUSINESS MEETING

Noon – 1:15 pm

AFTERNOON SESSIONS

1:15 pm - 5:00 pm C. 2017 A&A Update with Jim Martin, CPA CGMA (A&A)* D. 2017’s Hot Topics: Professional Issues Update, Big Data and Cybersecurity 5:30 – 7:00 p.m ASCPA’s Annual Celebration of Success: Join us in honoring outstanding CPAs. Enjoy connecting with colleagues. Refresh with hors d’oeuvres and beverages. Meet this year’s scholarships recipients. Make your reservation on your Accounting Connections registration on www.ascpa.org/GetConnected. *Live Streamed Sessions

FRIDAY, JUNE 9, 2017 | Day Two

8:00 am - noon E. Student Session (No Credit) F. Young CPA Session (Other): Taking Ownership of Your Future and the Accidental Chair G. Tax Session (Tax): Recent Developments in State Taxation Attend Day Two for only an additional $89.00. Print out a registration form at www.ascpa.org/GetConnected.

Stay and Play in Montgomery at the beautiful Renaissance Montgomery Hotel & Spa at the Convention Center!

Enjoy the best of downtown Montgomery.

Make dinners plans with colleagues at one of the dozens of local restaurants within walking distance. Visit the Rosa Parks Museum, Hanks Williams Museum, and many historical monuments just blocks away. Join us down at the Riverwalk and be sure to cheer with us for our hometown minor-league baseball team—the Montgomery Biscuits.

201 Tallapoosa Street Montgomery, AL 36104 334.481.5000 - Mention the ASCPA for special rates starting at $168.00 per night.

BUSINESS & INDUSTRY 039 The Eight Hour MBA: Key Concepts of Adding Value 8/16/2017 | 8:30am-4:15pm | MG: 8 Birmingham | Pelham Civic Complex Instructor: Jennifer Elder

As a CPA in business and Industry, you are consistently faced with changes and developments that make your professional needs unique. The ASCPA has created a lineup of B&I classes with those needs in mind. We hope to see you at our upcoming B&I workshop on June 30, or any of the following B&I classes listed below.

020 Innovative Forecasting & Budgeting: Moving Beyond the Traditional Techniques 6/23/2017 | 8:30am-12:00pm | Other Instructor: Brent McClure 002 U.S. GAAP: Latest Developments for Business & Industry 6/20/2017 | 8:30am-12:00pm | AA: 4 Gulf Shores | Spectrum Beach Club Instructor: Brent McClure 005 Lean Accounting and Management: Saving Money by Streamlining Operations 6/20/2017 | 1:00pm-4:30pm | Finance: 4 Gulf Shores | Spectrum Beach Club Instructor: Brent McClure 008 Business and Industry Roundtable 6/22/2017 | 8:30am-12:00pm | MG: 4 Gulf Shores | Spectrum Beach Club Instructor: Marc Hamilton and Brent McClure 011 Thriving in a Chaotic Economic Environment: Planning and Strategy Formulation for Your Organization 6/21/2017 | 1:00pm-4:30pm | Finance: 4 Gulf Shores | Spectrum Beach Club Instructor: Brent McClure 014 Controller’s Update: Today’s Latest Trends 6/21/2017 | 8:30am-12:00pm | Finance: 4 Gulf Shores | Spectrum Beach Club Instructor: Brent McClure 017 Employment Law Update: Reducing Employer Liability 6/22/2017 | 1:00pm-4:30pm | Business Law: 4 Gulf Shores | Spectrum Beach Club Instructor: Brent McClure

044 K2’s Excel Best Practices 8/23/2017 | 8:30am-4:15pm | CS: 8 Mobile | Holiday Inn Mobile Instructor: TBD

020 Innovative Forecasting & Budgeting: Moving Beyond The Traditional Techniques 6/23/2017 | 8:30am-12:00pm | Finance: 4 Gulf Shores | Spectrum Beach Club Instructor: Brent McClure 022 Data Breaches & Other Cyber Frauds: A 21st Century Risk to Your Organization 6/23/2017 | 8:30am-12:00pm | SK: 4 Gulf Shores | Spectrum Beach Club Instructor: Jeff Lieman 023 Meet Your Next Migraine: Five Critical Issues that Will Confront CPAs in Industry in 2017 6/23/2017 | 1:00pm-4:30pm | MG: 4 Gulf Shores | Spectrum Beach Club Instructor: Brent McClure 026 ASCPA Business and Industry Workshop 6/30/2017 | 8:30am-4:15pm | MG: 8 Montgomery | Spectrum Beach Club Instructor: TBD 029 K2’s Planning and Managing Your Team’s Technology 7/27/2017 | 8:30am-4:15pm | MG: 8 Birmingham | Pelham Civic Complex Instructor: TBD 032 K2’s QuickBooks Online and Other Top Accounting Software for Small Businesses 7/28/2017 | 8:30am-4:15pm | CS: 8 Birmingham | Pelham Civic Complex Instructor: TBD 034 Employment Law Update: Key Risks and Recent Trends* 8/14/2017 | 8:30am-4:15pm | Business Law: 4 Montgomery | Alabama Society of CPAs Instructor: Jennifer Elder *Also available as a live stream, code LS034

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047 K2’s Advanced Excel Reporting - Best Practices, Tools, and Techniques 8/23/2017 | 8:30am-12:00pm | AA: 4 Montgomery | Alabama Society of CPAs Instructor: TBD 048 K2’s Advanced PivotTables, Including PowerPivot 8/23/2017 | 1:00pm-4:30pm | CS: 4 Montgomery | Alabama Society of CPAs Instructor: TBD 051 The Market Approach to Valuing a Business 8/23/2017 | 8:30am-4:15pm | SK: 8 Birmingham | Pelham Civic Complex Instructor: Kevin A. Andrews 076 K2’s Small Business Internal Controls, Security, and Fraud Prevention and Detection 8/28/2017 | 8:30am-4:15pm | AA: 8 Huntsville | Westin Huntsville Instructor: TBD 100 Controller’s Update: Today’s Latest Trends 9/18/2017 | 8:30am-12:00pm | Finance: 4 Birmingham | Pelham Civic Complex Instructor: Brent McClure 105 Lean Accounting and Management: Saving Money by Streamlining Operations 9/18/2017 | 1:00pm-4:30pm | Finance: 4 Birmingham | Pelham Civic Complex Instructor: Brent McClure 111 Innovative Forecasting & Budgeting: Moving Beyond the Traditional Techniques 9/19/2017 | 8:30am-12:00pm | Finance: 4 Birmingham | Pelham Civic Complex Instructor: Brent McClure

117 Thriving in a Chaotic Economic Environment: Planning and Strategy Formulation for Your Organization 9/19/2017 | 1:00pm-4:30pm | Finance: 4 Birmingham | Pelham Civic Complex Instructor: Brent McClure 119 The New Controllership: Keys to Boosting Financial Performance 9/20/2017 | 8:30am-12:00pm | AS: 4 Mobile | Holiday Inn Mobile Instructor: Brent McClure 122 K2’s Excel Financial Reporting and Analysis 9/25/2017 | 8:30am-12:00pm | AA: 4 Birmingham | Pelham Civic Complex Instructor: TBD 124 The New Controllership: Keys to Boosting Management Skills 9/20/2017 | 1:00pm-4:30pm | AS: 4 Mobile | Holiday Inn Mobile Instructor: Brent McClure 127 K2’s Business Intelligence, Featuring Microsoft’s Power BI Tools 9/25/2017 | 1:00pm-4:30pm | CS: 4 Birmingham | Pelham Civic Complex Instructor: TBD 128 Annual CFO Spotlight: 4 Select Issues 9/20/2017 | 8:30am-4:15pm | Ethics: 8 Montgomery | Alabama Society of CPAs Instructor: White, Diane D. 129 Shorten Month End: Closing Best Practices 9/21/2017 | 8:30am-12:00pm | AA: 4 Montgomery | Alabama Society of CPAs Instructor: Diane D. White 130 Data Breaches & Other Cyber Frauds: A 21st Century Risk to Your Organization 9/21/2017 | 8:30am-12:00pm | SK: 4 Birmingham | Pelham Civic Complex Instructor: Newell, Thomas 131 K2’s Excel Tables and Data Models - Efficiently Managing, Analyzing & Reporting Your Data 9/26/2017 | 8:30am-12:00pm | CS: 4 Birmingham | Pelham Civic Complex Instructor: TBD

132 Critical Thinking Skills for Financial Professionals 9/21/2017 | 1:00pm-4:30pm | MG: 4 Montgomery | Alabama Society of CPAs Instructor: Diane D. White 134 K2’s Excel PivotTables for Accountants 9/26/2017 | 1:00pm-4:30pm | CS: 4 Birmingham | Pelham Civic Complex Instructor: TBD

138 K2’s Securing Your Data Practical Tools for Protecting Information 9/20/2017 | 1:00pm-4:30pm | CS: 4 Birmingham | Pelham Civic Complex Instructor: TBD

142 K2’s Technology Update 9/21/2017 | 8:30am-12:00pm | CS: 4 Birmingham | Pelham Civic Complex Instructor: TBD

146 Controller/CFO Update: Hot Topics Facing Today’s Financial Professional 9/26/2017 | 8:30am-12:00pm | Finance: 4 Huntsville | Westin Huntsville Instructor: Amanda Q. Snead 149 K2’s Microsoft Office Improving Productivity with New Features 9/21/2017 | 1:00pm-4:30pm | CS: 4 Birmingham | Pelham Civic Complex Instructor: TBD

135 K2’s Tech Tools and Gadgets for a More Efficient You! 9/20/2017 | 8:30am-12:00pm | CS: 4 Birmingham | Pelham Civic Complex Instructor: TBD

151 Meet Your Next Migraine: Five Critical Issues that Will Confront CPAs in Industry in 2017 9/26/2017 | 1:00pm-4:30pm | MG: 4 Huntsville | Westin Huntsville Instructor: Amanda Q. Snead

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NOTICE OF ANNUAL BUSINESS MEETING Under the provisions of Article VI of the Alabama Society of CPAs’ bylaws, notice is hereby given of the annual business meeting. It will be held at the Accounting Connections Conference at the Renaissance Montgomery Hotel and Spa on June 8, 2017 at twelve o’clock.

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24 23

MEMBER NEWS CONGRATULATIONS

Tommy Moore has

joined DiPiazza, LaRocca, Heeter as a tax manager.

He is a graduate of the University of Alabama in Birmingham. ____________________ Warren Averett announced that the following have been named members of the firm: James L. Cason, III, Birmingham office, specializes in accounting advisory services, external and other specialized audits, review assurance services and turnaround advisory.

He serves clients in the higher education, nonprofit, construction, government, healthcare and M&D industries.

Mark Hestla, Cullman office, consults on various financial reporting and tax planning issues for closely-held entities.

He services clients in the manufacturing, construction, transportation and healthcare industries.

Mark also serves as a leader within the Transportation Practice Group. Paul Perry, FHFMA, CITP, CISM, Birmingham office, focuses on risk assessment, internal control and information technology control related projects including Service Organization Controls (SOC) engagements. He is responsible for general consulting projects

for the Firm and is the leader of the Firm’s Data Analysis Group.

Megan Randolph, Birmingham office, serves federal and state tax needs of large nonprofit and governmental entities. She also works with manufacturing companies, private equity investment funds, and international, state and local taxation. Megan is the Firm’s service area leader of Birmingham’s tax practice. Chris Reyer, Birmingham office, works with family owned businesses in industries including real estate, construction, transportation/logistics, and dealerships. He specializes in family investment partnerships, entity structure, federal and state tax planning, estate and succession planning, profitability enhancement and general business consulting. Chris Smith, Birmingham office, specializes in audit engagements for large not-for-profit and governmental entities. He has extensive experience assisting public sector clients with federal award compliance requirements. He also provides audit and accounting advisory services for clients in the manufacturing and healthcare industries.

Cristy Andrews has

joined the Warren Averett office in Montgomery as a senior manager.

Andrews has more than 18 years of experience

specializing in accounting and tax services for client in the real estate sector. She holds both undergraduate and master’s degrees from Auburn Montgomery.

Beth F. Chicarello has

become a shareholder at Till, Hester, Eyer and Brown. Chicarello is a graduate of the University of Alabama and has extensive in auditing and tax.

Crow Shields Bailey promoted two team members in January.

Colleen Dicks was promoted to supervisor, and Abby Roveda was promoted to senior accountant. Colleen Dicks joined CSB in 2012 and is a member of the audit team.

She is a graduate of Auburn University with a bachelor’s degree in finance. Dicks specializes in review and compilation engagements, financial statement preparation, and audits of employee benefit plans. Abby Roveda joined CSB in 2015 and is a member of 24

the audit team. She is a graduate of the University of Alabama with bachelor’s and master’s degrees in accounting.

Roveda specializes in financial statement preparation and audits of wholesale distributors and employee benefit plans. ____________________ The University of West Alabama inducted four members into Golden Key, its most prestigious alumni honor society, during fall commencement in December. Among those inducted was Elizabeth H. Springer, CPA, UWA professor emeritus. Now retired from full-time faculty roles, Springer continues to teach adjunct courses in accounting. While at UWA, she established and sponsored the UWA chapter of Delta Mu Delta honor society and was a faculty advisor for the accounting club. She served on numerous College of Business committees and was a longtime member of Faculty Senate, which she served as secretary. She chaired several university committees including SACS accreditation, ACBSP accreditation and the faculty salary committee. Springer also taught at UAB, serving as faculty advisor for the National Association of Black Accountants (NABA) chapter and organizing a VITA program there.

She started her career in public accounting with Senna Company and shared her practitioner experience to benefit her students. ____________________

Eric Haynes, CGMA,

a senior accountant with Wilkins Miller, has recently been awarded the Certified in Financial Forensics (CFF) credential by the American Institute of Certified Public Accountants (AICPA).

The CFF credential, established in 2008 by the AICPA, is granted to qualified CPAs with considerable professional experience in financial forensics. ____________________

Nick D’Allesandro,

Barfield Murphy Shank & Smith, has been named to the board of directors of Firehouse Shelter. He’s a graduate of Spring Hill College and has been in public accounting for 12 years. D’Allesandro is a graduate of Class III of the ASCPA’s Leadership Academy. ____________________ JamisonMoneyFarmer (JMF) announced the following promotions:

Kasey Powell, CFE,

has been promoted to supervisor. Powell began full time at JMF in 2013

after working through his undergraduate years as a videographer for the Alabama football team. Originally from Tuscaloosa, he holds both undergraduate and master’s degrees from the University of Alabama. He is on the board of Habitat for Humanity.

of Tuscaloosa and the Tuscaloosa Alpha Gamma Delta Alumnae Club, Gullahorn serves on the board of Family Counseling Services, Roe is the treasurer of the Good Samaritan Clinic, board member of the Exchange Club Foundation and is an ambassador of the Chamber of West Alabama. Shirley also joined JMF in 2014, having served an internship in the 2012 and 2013 tax seasons.

practice group. She provides audit and advisory services for manufacturing and distribution businesses with a history of an emphasis on automotive manufacturers formed by inbound foreign investment. She also has experience in IFRS conversions for first time adopters of international standards.

Along with performing and controlling full audits, she performs risk assessments, assessments of internal controls, and accounting process evaluations. ____________________

Landon Shelby has

Morgan Akins, Collier Gullahorn, Quinn Roe, and Matt Shirley have

all been promoted to senior accountant. All are graduates of the University of Alabama with both undergraduate and master’s degrees.

Akins, Gullahorn and Roe all began full time at JMF in 2014 as staff accountants in tax and accounting after internships during the 2013 and 2014 tax seasons. Akins is on the boards of Arc

been promoted to senior accountant. Shelby joined the firm in 2014 as a staff accountant in tax, audit and accounting and worked as an intern during the 2014 tax season. Prior to joining JMF, he held several finance positions at Tuscaloosa privatelyheld companies with his last as controller of Dixie Mechanical, Inc. He is a graduate of the University of Alabama and is treasurer of the Tuscaloosa Public Library Foundation.

Hartmann, Blackmon & Kilgore P.C. (hb&k), with offices in Brewton, Foley, Fairhope and Spanish Fort, recently promoted Allen Cave to principal.

Cave has been with hb&k since 2010 and has practiced public accounting for nineteen years, focusing on

tax compliance and consulting for small to mid-sized business entities and their owners.

His areas of expertise include closely held manufacturing entities, service organizations, oil and gas concerns, and construction contractors. Cave is a magna cum laude graduate of Samford University. He is an active member of the Alabama Society of CPAs where he serves on the Federal Taxation Committee. Cave also serves as a director on the boards of several not-for-profit entities including the United Fund of Brewton, The Jefferson Davis College Foundation, The Brewton Public Library Foundation, and Project Rapha, Inc. He is also a member of the Brewton Alabama Rotary Club. ____________________

Ann-Brooks Morrissette has been

Katie Vega and Catherine McCown at the Montgomery Chapter’s annual Bankers and Attorneys luncheon

Also at JMF, Lynn Osborn has been promoted to shareholder.

Osborn is a leader in JMF’s audit practice and is part of the firm’s manufacturing and international core 25

named planning and development manager for the Fuse Project.

It is a 501(c)(3) nonprofit founded by eight young professionals from Mobile to support tangible, realistic projects that promote health, fitness, education and social responsibility among the children of Alabama’s Gulf Coast.

Morrissette most recently was a recruiting manager for PangeaTwo in its Mobile office. Prior to that, she was an internal auditor for Children’s Hospital of Alabama in Birmingham. She is a graduate of the University of Alabama with both undergraduate and MAcc degrees. ____________________

WHAT’S GOING ON OUT THERE?

Brentwood, Tennessee firm Rayburn Fitzgerald PC has merged with top 25 CPA and advisory firm Carr, Riggs & Ingram (CRI). They will join the established CRI office in Nashville.

Preparing for Big Data, Business Intelligence and the Data-Driven Age

are difficulties linking, matching, validating, purging and transforming data across systems. Business intelligence focuses on connecting and correlating relationships, developing hierarchies and data linkages to convert data to knowledge.

THE V PERSPECTIVE OF BIG DATA:

Marc Hamilton, CPA, CGMA, ASCPA Chair-elect

Business management is facing a new technological era quite unlike any previously experienced. Broad scale technological developments are emerging that will unlock insight from data in ways that have not previously been possible. Managing big data will provide clearer knowledge which will allow for informed decision making and establishment of a competitive strategic advantage for businesses.

WHAT IS BIG DATA/BUSINESS INTELLIGENCE AND WHY IS IT IMPORTANT?

The value of big data isn’t derived from how much data you have, but from what you are able do with it. Properly designed business intelligence systems automate the gathering, organization and analytical computations for all types of data from any source. Businesses are typically focusing business intelligence analysis on finding opportunities to reduce costs, reduce time, develop new products and optimize product offerings, and make smarter decisions.

BIG DATA

Organizations collect enormous amounts of data and the variety of data is diverse. It ranges from data created by traditional business transactions, to the multitudes of social media content, to operational data created from sensors or systems processing to one another. This data is also created in diverse formats ranging from structured, numeric data in traditional databases to unstructured text documents, email, photo, video or audio data.

Business intelligence currently is one of the greatest opportunities to create value, improve performance, and impact the nature of competition for many companies.

The goal of business intelligence is to allow for easy interpretation of big data. Business intelligence is a term used to discuss the strategies, processes, applications, data, and technologies used to support the collection, analysis, presentation and dissemination of business information.

In business environments, massive amounts of data stream at unprecedented speeds and typically require some type of immediate or timely processing. However, data flow can also be highly inconsistent, creating challenges for managing data trending or daily, seasonal or eventtriggered peak loads. Because data comes from multiple sources, there

26

Business intelligence technologies are used to support a wide range of business decisions ranging from operational to strategic. However, in a recent report, PwC noted that about 60% of executives say their companies’ decisionmaking is only somewhat, or rarely, datadriven. This creates a tremendous opportunity for accounting professionals to act as a catalyst in the big data/business intelligence transformation.

The Analytical Advantage, published by Deloitte, noted these key findings related to the current business environment of business intelligence

• Analytics is a competitive resource.

Analytics is already an important competitive resource for many companies, with less than 20 percent of survey respondents stating that analytics does not yet support their corporate strategies.

• There is a growing importance of analytics.

Some 96 percent of respondents feel that analytics will become more important to their organizations in the next three years. Two reasons why there is plenty of room to grow: a great deal of data is still not used for decision-making, and many organizations have only rudimentary analytical technology.

• Analytics creates better decision-making.

Nearly half of respondents (49 percent) assert that the greatest benefit of using analytics is that it is a key factor in better decision-making capabilities. Another 16 percent believe that its greatest benefit is better enabling key strategic initiatives.

Nearly two-thirds of respondents say that analytics plays an important role in driving business strategy.

the potential of analytics unless they can overcome several key barriers, of which data management and access to talent are often the most problematic.

DATA MANAGEMENT A key effort in the adaptation and implementation of business intelligence will be the success of creating collaborative Finance and IT teams. Finance teams have traditionally led and used data-driven analytics for strategic aspects of managing the business. IT teams have provided infrastructure and software support and led customization development.

Establishing a business intelligence team and a data management team with a common goal to lead the application of analytics to operational decisions can build relationships and leverage expertise within the organization.

Ensuring employee access to data, creating a culture where the right people can see the necessary data in real time, requires not only design and implementation, but also requires the organization to consider how analytics will impact the business model. Accounting professionals have an opportunity to lead the analytics evolution by identifying business areas where analytics can bring the greatest value and competitive advantage.

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• Structure is a challenge. Analytics is

managed by a variety of executive roles within companies, and a wide range of functions benefit from analytics.

More structure around coordination and alignment is needed to realize the impact and benefits of a company’s data throughout the organization.

• Key barriers to overcome. Organizations

As the Millennial and Gen Z generations begin to dominate the workforce, there will be an expectation that intuitive business intelligence systems will drive decision-making throughout companies. Data literacy competency will be a requirement. We know that data analytics skills have become a mandatory core proficiency for professionals of all types, particularly accounting professionals.

As evidenced in 2016, LinkedIn listed business intelligence as one of the hottest employerdesired skills. Likewise, McKinsey’s 2016 Analytics Study found that approximately half of executives across geographies and industries reported a greater difficulty recruiting analytical talent than any other kind of talent, also noting that retention of analytics talent is an issue.

Much like proficiency in Microsoft Excel, Word, and PowerPoint, basic competency in the use of analytic tools will become a critical job requirement. In response, analytics and data literacy competency programs are permeating higher education and are also being introduced in K-12 programs. ________________________________________ (continued on page 35)

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But its marketing influence is rising, as 55 percent of respondents said their marketing and sales groups invest in analytics second only to finance operations.

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It’s a decision that all public accounting firm employees must make when they transition over to private industries: Do I maintain my CPA designation?

While all CPAs are accountants, not all accountants are CPAs. Oftentimes, CPAs launch their careers in large accounting firms where serve as advisors to both large companies and small neighborhood businesses, falling under an umbrella of both large and small public accounting firms. They are consultants who are also recognized as strategic business advisors and decision makers. However; amongst the many challenges involved when a CPA decides to shift paths and take a position within a private industry, is whether or not to maintain that CPA designation. Oftentimes the decision is personal, something the individual views as a goal that they define as paramount and a way in which they can prove to the industry that they are dedicated enough to go through rigorous growth and learning. Other times it is the pride that they take in their career and their desire to be viewed as experts and decision-makers in the field.

Five Perks for Keeping your CPA Designation

While keeping up-to-date on the CPA certification involves additional time studying and dedicating hours outside of the office, there are several ways to maintain the license, including in-person seminars, webinars and self-study (some organizations even offer in-house training). This allows for a wide scale of CPE learning tools that can be chosen based on the needs and schedule of the individual. To keep up with new developments in business and technology, a majority of states require 150 credit hours of education at an accredited college or university as a prerequisite to obtaining a CPA certification. In order to maintain a CPA license, you need to have 80 hours of continuing professional education every two years, including an ethics component. Online classes may have an exam associated with them to “pass” and get the CPE credits. Once you pass the initial CPA exam, you do not need to retake it to keep the license.

While you don’t necessarily need your master’s degree, many of the 150 credit hour programs lead to a graduate degree, such as an MBA (Master of Business Administration), MACC (Master of Accoun-

By Kate Anslinger

tancy) or MST (Master of Science in Taxation). These all have been beneficial in helping CPAs create the career opportunities and salaries that they seek.

The timeline for licensing is dependent on the individual’s education, examination and experience, and it is evident that maintaining a CPA has never been viewed as a negative, whether in the presence of a future employer or amongst peers in the office. Below is a list of the top five reasons to maintain a CPA designation, based on the perspective of members of the Massachusetts Society of CPAs:

1. Career Perks

Maintaining a CPA designation offers a chance to stay afloat on trends in the industry while also developing new skills.

A major benefit to this is that these skills can be shared with fellow colleagues, which ultimately leads to a more educated workplace. Like in all careers, it can’t be denied that having that extra education will ultimately lead to being respected and seen as a knowledgeable addition to the team. When you show that you are willing to go the extra mile to be a greater benefit to your colleagues, it naturally gives you the upper hand and contributes to confidence when faced with decisions.

“As long as I work, and potentially even when I am retired, I plan on keeping the CPA designation,” said Director of External Reporting at CVS Health Katherine Durant, CPA, CGMA who has made the decision to keep her CPA, which she believes contributes to making her a relied upon resource within her community.

Durant will soon transition at CVS Health to a role that requires less accounting and has already asked to retain her CPA designation. The decision was easy for her, as she views the three letters after her name as a sign of respect. Another added perk that CPAs have found beneficial is the networking opportunities that often lead to valuable working relationships.

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2. Job Security and Opportunity

When conducting job searches, CPAs have found the license to be helpful as there are a considerable amount of jobs that require a CPA. It’s meant not only for job security, but also opportunity. Client Advisor, Michael Daszkiewicz, CPA, at Fortis Management Group which is a multi-family office, says that he was able to make a lateral move into a totally new field primarily because he holds a CPA license. “My CPA license confirms clients’ and peers’ confidence in my technical abilities as well as my integrity,” said Daszkiewicz.

Some of the CPA exam areas are financial, audit, regulation and business, all of which touch upon the day-to-day duties of those in both the larger firms and the private firms. “Having the technical background and education has been invaluable in allowing me to succeed. In addition, another important benefit is career security. There are so many opportunities and needs for CPAs,” said Daszkiewicz.

From the smallest start-up to the largest government agency, every business or organization depends upon the skills of a CPA, a highly regarded credential.

Most employers who are at the high level of hiring (CFO or controller roles) do not have the financial expertise themselves and they often require a CPA to demonstrate skill and proficiency. Director of Accounting Programs and Assistant Professor of Accounting at Bay Path University Kara Stevens, CPA, MBA, agrees that the license has presented opportunity. ”Having my CPA opened many doors for me in academia. Being an experienced public accountant has allowed me to not only teach the fundamental accounting rules, but also share my experiences within the profession.”

3. Attractive Skillset

Having the CPA title allows one to continue to maintain and update their skills as part of their commitment to a truly progressive profession. The added credential is a token of reliance and professionalism in the world of business. Although it is a highly stimulating professional track, the payoff is that CPAs are considered the most trusted advisors in business.

Some of the many skills that are enhanced when completing a CPA license are the investigation and questioning skills that

are developed. These skills are significant when working in the tax and consulting roles where you are challenged to find what makes your client work and to determine why or why not your client has been successful, so ultimately you can assist them in achieving their goals. “I built so many great relationships with my clients, it became central to how I perform my role today,” said President and CEO of Bradford Soap, Stuart Benton, CPA, CGMA. “It is never about just the debits and credits or the reports and filings, but how you can add value to the business and the business owner.”

Benton is solid proof that having a CPA paid off. After spending the last five years as chief financial officer at Bradford Soap, he has recently taken on the role of president and CEO of the company and its operating subsidiaries. In July, Benton won the 2016 Boston Business Journal’s CFO of the Year Award in the large private company category. This prestigious award recognizes CFOs, who, through their strong business experiences, strategic direction and market knowledge, have

Keep your

CPA LICENSE, Keep your

made a difference in their organizations and in the profession while managing daily financial operations. Benton is also a past chairman of the MSCPA’s Board of Directors and a member of the Society’s corporate financial professional’s advisory council.

4. Cutting-edge Insight

It’s no surprise that many careers require its employees to consistently update their credentials. This ongoing education offers proof that the person is dedicated and it allows the employee to be up-todate on the ever-changing world that we live in. Due to frequent economic developments, there will forever be the need to refine the focus of what accountants need to know and what they should know. As a CPA, an employee challenges their knowledge on a daily basis and there are several ethical responsibilities.

“I feel that I hold myself to the high CPA standards consistently in making tough decisions,” said Chief Financial Officer of Clarke Schools for Hearing and Speech Susan Lowe, CPA, CGMA.

5. Personal Pride and Knowledge

While all CPAs have their various reasons for maintaining the license, there is a common theme that they all take pride in the three letters following their names. “It is a thing to be proud of,” said Lowe. “There are professional continuing education requirements to maintain the license, so it helps to focus on learning new things to meet those requirements.”

Pride and knowledge have a tendency to lead to confidence, which in turn is one of the building blocks to leadership roles, and it is no doubt the world needs more concrete leaders.

Reprinted with permission from the Massachusetts Society of CPAs. Kate Anslinger is an author and journalist from Winthrop, Massachusetts. Contact her at kateanslinger@gmail.com

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Meet the Cabinet JESSICA BOU AKAR

DAN POST

Bou Akar now calls Birmingham home after moving from Lebanon. She joined the Dent Moses team in January 2012 where she provides assurance and taxation assistance for various industries including wholesale distribution, professional services firms and not-forprofits. Jessica is heavily involved in her community through various Birmingham area and state organizations.

Post has been in public accounting and with Bar field Murphy Shank & Smith since 2011. He loves spending time with family, grilling outside, and Chicago Cubs baseball. Daughters Jovie, 3 and Arie, 1 keep him and his wife busy with church and dance activities.

SCOTT GARDNER

GARRICK SAMS

Gardner is originally from Tampa and was graduated from Auburn in 2014.

He currently lives in Birmingham with his wife Jane and Barkley, their dog.

He is in his second year as an auditor with Deloitte. Gardner enjoys watching all sports, particularly the Tampa Bay Rays and Auburn basketball.

Sams is a tax manager specializing in both individual and corporate tax at Hall, Albright, Garrison and Barnes in Huntsville. He received his undergraduate degree at the University of Alabama in Huntsville and graduate degree at the University of Alabama.

DAN SELLERS

ADDIE GRISSOM

Sellers has over 6 years of experience at Carr, Riggs, & Ingram, LLC, providing audit, tax, internal audit and financial reporting services to manufacturing, distribution, restaurant, retail and financial institution clients. He is a 2009 graduate of the University of Alabama, where he also earned a masters of accountancy in 2010.

Grissom is a senior audit associate at CDPA in Athens, working with clients primarily in in government, higher education, retail and employee benefits sectors. She is a graduate of the University of North Alabama and UA’s MAcc program.

LAUREN SMITH

Smith was graduated from Auburn University Montgomery in 2006 and started her career at Jackson Thornton’s Montgomery office. An opportunity quickly opened up closer to her home. She began working at Pioneer Electric Cooperative, a rural electric cooperative serving 9 counties in central Alabama, in 2008. She is Vice President of Accounting & Finance at Pioneer. She resides in McKenzie with her husband and two children.

KATIE EAGAN

Katie Egan is a senior accountant with JamisonMoneyFarmer, focusing on tax reporting and planning for closely-held businesses and individuals.

She enjoys running with her Goldendoodle Maggie.

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MANDY PARKER

Parker began her career with Wilkins Miller in January 2013 and was named a senior accountant in 2015. Areas of special competence include taxation of individuals, partnerships, non-profits and corporations; audits, reviews and compilations for non-public companies. She enjoys spending time with family and friends, trips to the beach and staying active.

MARENA MOLAY

At Carr, Riggs, & Ingram, Molay primarily provides audit and consulting services to governmental and not for profit entities, as well as audit and tax services for manufacturing and distribution clients. She is also highly involved in the firm’s university recruiting and training programs. Molay is a 2014 graduate from the University of Alabama and earned her master’s of accounting from the University of Alabama at Birmingham in 2015.

DUSTIN HORNBUCKLE

Hornbuckle is the controller for Mitchell Grocery Corporation in Albertville. He has a n MBA from Troy University, maintains a CPA license in both Tennessee and Alabama and holds the certified fraud examiner (CFE) designation. He and his wife, Lindsey, currently live in Guntersville with their two children, Austin and Rae.

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11/13/15 10:33 AM

Sean Allocca, Editor at CFO.com

There was plenty of uncertainty this year, from the Brexit vote to the Presidential election, but what are CFOs most worried about ahead of 2017?

The potential for global developments to unsettle economic conditions and restrict growth opportunities both here and overseas is the top risk cited by executives in a survey from the consulting firm Protiviti and North Carolina State University’s Poole College of Management. Seventy-two percent of respondents rated “uncertain economic conditions” as potentially having a significant impact on their companies over the next 12 months.

The survey polled 735 board members and executives worldwide about risk issues that will likely have an impact on their companies next year. Executives were asked to rate 30 risk issues on a scale of 1-10 based on how much impact they expect them to have on their companies. The survey was conducted online in the fall of 2016.

Regulatory change and heightened regulatory scrutiny was the second most-pressing risk, down from the top spot in each of the prior four years. Sixty-six percent of respondents cited regulatory change as having the potential for serious impact in 2017.

EXECUTIVES’ TOP 10 RISK ISSUES FOR 2017 Executives rated these risk issues on a 10-point scale with 10 representing the risk issue will have a significant impact on the organization over the next 12 months.

RISK ISSUE

Economic conditions Regulatory changes Cyberthreats Rapid speed of disruptive innovations Privacy/identity management Succession challenges/attracting top talent Volatility in global financial markets Organization's culture doesn't identify risk Resistance to change Sustaining customer loyalty

2017 2016 6.61 6.51 5.91 5.88 5.87 5.76 5.67 5.66 5.63 5.62

5.83 6.06 5.80 5.48 5.55 5.63 5.63 5.30 5.40 5.28

Source: Protiviti Get the data Created with Datawrapper

“Our survey results support a shift we’ve seen in the focus of board members and C-suite executives towards risks associated with international and domestic economic conditions,” said Mark Beasley, Deloitte professor of enterprise risk management at Poole College.

Managing cyberthreats, disruptive innovations, and privacy and identity protections rounded out the top five concerns. The survey also found that perceived overall risk levels seem to be increasing. Global business was rated as being riskier than in the prior two years. Respondents in the U.S. said risk levels were about the same, while respondents in other parts of the world signaled much greater concern.

“Executives are concerned about their companies’ ability to keep pace with the rapid speed of change,” said Patrick Scott, Protiviti’s executive vice president of industry groups. “While the effects may vary across industry groups in terms of different risk profiles, our study shows that no industry is immune to future uncertainty in a changing world.”

CFOs and CEOs appear to be more worried than the average C-level executive. All 30 risk issues graded by top finance and executive officers received either a “potential impact” rating of 4.5 to 5.9 on the ten-point scale, or a “significant impact” rating of 6.0 and above. None of the issues received the “less significant impact” rating of 4.4 and below.

This post originally appeared on December 13, 2016 on CFO.com

33

Surprisingly, board members seemed much more optimistic than other survey takers, evaluating 18 of the 30 risk issues at the lowest impact level.

The risk scores for all of the top 10 risk issues were higher than last year.

Although perceived risk levels appear to be rising, organizations say they are not planning to increase investments in their company’s risk management capabilities. In fact, executives said they are less interested in enhancing oversight processes than in the prior two years. While that may seem paradoxical, the report suggests companies could be tightening purse strings in an uncertain economic climate or are satisfied with the prior years’ investments.

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REMEMBERING

DR. HENRY ALBERT LILLY

ROLAND T. SHORT, JR.

Henry Albert Lilly was graduated from Tuscaloosa High School and earned his bachelor’s degree, a master’s degree in tax accounting, master’s degree in computer science from the University of Alabama and a Ph.D. in computer science from the University of Alabama at Birmingham. Shortly after graduation he enlisted in the U.S. Navy Reserve and served for two years. He became a CPA after returning to Alabama and practiced for several years. Once he completed his Ph.D., he found his true calling as a teacher of computer science at the Alabama School of Math and Science in Mobile. He taught there from its inception in 1991 until his retirement in 2014. Lilly was as passionate about the game of bridge as he was about his wife Ann. It was a hobby for the two of them and they competed as a pair at many tournaments around the country. His mind was always in gear and often operated on its own independent track. At times this meant that he would suddenly, and without warning, resume a conversation with you that had been started months earlier! He was an original thinker and would provide you with a novel perspective on an issue under discussion. Memorials can be directed to the Lazarus Ministry at Christ Episcopal Church of Tuscaloosa.

August 29, 1950 – January 20, 2017 Tuscaloosa, Alabama | Certificate 3147

March 25, 1945 – December 23, 2016 Mobile, Alabama | Certificate 1604 Roland Thomas Short passed away after a courageous battle with cancer.

He was born in Jasper and attended the University of Alabama where he received an MBA. He passed the CPA exam and then completed a law degree from the Birmingham School of Law. Short was a member of Phi Kappa Alpha and served as its treasurer and president.

After college he work at IBM as a systems engineer and salesman. He also served in the US Army, earning a bronze star during the Viet Name war. He joined Alabama Metals Industries Corporation (AMICO) as VP of finance and was names executive VP in 1983. He would progress to COO, CEO and president. Short was a member of the ASCPA for more than 36 years.

Short gave time to many organizations and charities including the Downtown Rotary Club and Magic Moments. Memorials may be made to St. Luke’s Episcopal Church, Magic Moments or the charity of your choice.

ROBERT EDGAR “ED” OHNICH JOSEPH LOUIS LOVVORN, JR.

February 18, 1938 – January 6, 2017 Birmingham, Alabama | Certificate 702

Joseph Louis Lovvorn, Jr., 76, died on Christmas Eve. He was retired from the Alabama Co-op as CFO after 30 years of loyal service. He was a member of Town Creek United Methodist Church and an avid University of Alabama football fan. Memorials may be made to the Disabled American Veterans, 3313 Memorial Parkway SW, #104, Huntsville, AL 35801.

Ed Ohnich was a product of Birmingham’s public schools, graduating from Woodlawn High School in 1956. He attended Samford University where he was named Outstanding Accounting Student. He graduated in 1960 and was a member of Lambda Chi Alpha fraternity. He worked in public accounting for more than 50 years, serving on many committees through the years. His family requested that memorials be directed to the Alabama Society of CPA’s Educational Foundation, PO Box 242987, Montgomery, AL 36124.

April 3, 1940 - December 24, 2016 Florence, Alabama | Certificate 5124

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major questions. First the CPA law was “also in conflict with the Constitution of the United States, the latter in that it, the statute, deprives plaintiff in error of his property without due process of law, and subjects him to an ex post facto law.” In addition, the Lehmann case again asserted that the Board “never adopted any code or promulgated any rules or definition of what is or is not professional conduct, or what is sufficient cause for the revocation of a certificate.”

Justice McKenna, writing for the court, the U. S. Supreme Court published its unanimous opinion on December 23, 1923 (Exhibit B). At first blush, in a reading of the Lehmann v. State Board of Accountancy Exhibit: 263 U.S. 394 (1923) B it appeared that the court decided in favor of Lehmann, however it actually carved out a special set of situations for the CPA profession (Exhibit C) that could be used nationwide to “defend” the CPA as a professional designation and license that stood for quality and knowledge, without interfering or impeding non-CPA accountants from working.

In a short period of time, the Alabama Supreme court used the federal Lehmann v Board to find in favor of ASBPA in its litigation with Henry Miller. According to the West-law data base, both the state and federal supreme court cases regarding Lehman v Board have been cited as a precedent no less than 83 times over the past ninety years. The case has been used either to uphold or defend the state’s right to regulate certain professional matters. The last one was in 2000 in a strangely-titled case ex parte (not present) Alabama State Examiners in Counseling (Re Theron Michael Covin) v. Alabama State Examiners in Counseling 796 So.2d 355.

Conclusion: Nearly 15 years after Lehmann v Board, in an odd twist to the long legal battle, the minutes of the 1937 ASCPA annual meeting at the Greystone Hotel in Montgomery included a resolution from William Christian to reinstate J. Harold Lehmann to membership in the Alabama Society. According to the minutes, the resolution was seconded by Robert Troy from Montgomery and unanimously approved. In an introduction to the resolution it was also noted the request came with a copy of the State Board’s action on Lehmann’s certificate that was originally revoked in 1922. Mr. Lehmann was able to reacquire his certificate after the state legislature amended the CPA law in a special session in February 1937 allowing for reinstatement of certificates by the board if certain conditions are met.

Regardless of this outcome, the current website of the Alabama Board of Public Accountancy continues to show Lehmann’s certificate and license was revoked.

Through Lehmann v State Board, the ASBPA has been able to assert its authority over the use of the CPA designation, thereby strengthening the effectiveness of the certificate and solidifying the early accounting profession in Alabama and possibly throughout the county. This an opinion was bolstered by the eminent accounting and history scholar James Don Edwards in his book “History of Public Accounting” (p.113), that the Lehmann case “added greatly to the professional standing of accountancy.”

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SUCCESSFUL CHANGE

Accounting professionals have a unique opportunity to develop big data competencies, lead collaborative business intelligence development efforts and become an even more valuable resource for their organization.

The key to a successful business intelligence transformation is building a collaborative culture. Best practices of extremely successful companies include defining the transformation clearly and focusing on succeeding at the basics, such as creating clarity, stretching targets and defining structure. Attention must be focused on employees’ mind-sets and behaviors, such that limited resources are used effectively and wisely.

As noted in the Harvard Business Review article, 4 Business Models for the Data Age, creating value through lowered cost, providing better products and innovation and making better decisions are not new concepts. The transformation of driving the efforts with data, however, IS new. Understanding the dynamics of this new asset and how it will impact decision-making and traditional business strategies is the challenge for accounting professionals in the data age.

Marc Hamilton, CPA, CGMA is CFO and treasurer at CDG Engineers & Associates in Andalusia. He will become the 98th chair of the Alabama Society of CPAs at the annual members meeting in June.

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