Practice Management and Student Issue by Alabama Society of CPAs

ALABAMA CPA MAGAZINE NOVEMBER/DECEMBER 2015

PRACTICE MANAGEMENT AND STUDENT ISSUE

THE ALABAMA CPA MAGAZINE Alabama Society of Certified Public Accountants P.O. Box 242987 Montgomery, Alabama 36124-2987 1-800-227-1711 334-834-7650 www.ascpa.org OFFICERS Dr. Lowell S. Broom, Chair James R. L. Carroll, Chair-Elect Don McCleod, Past Chair BOARD OF DIRECTORS Lynne N. Bozeman Michael L. Brand Caitlin F. Glass Paul Marcus Hamilton M. Buddy Johnsey Lisa M. McKinney Gregory E. Sellers Dennis E. Sherrin Rachel M. Taylor Macaroy Underwood AICPA COUNCIL MEMBERS Dr. Lowell S. Broom E. Lamar Reeves John P. Shank Jimmy L. Williamson, Past Chair, AICPA The Alabama CPA Magazine is published by Alabama Society of Certified Public Accountants

Message from the Chair... Things are changing……..aren’t they always. Ben Franklin is often credited with having stated that there are only two things that you can count on in this world….death and taxes. We probably ought to add a third item to that list….. change. One of the changes that the AICPA has been focused on in recent months is the change in the nature of the accounting work force. Much has been written about the millennials lately and the AICPA has gotten in on that discussion, as well. We have heard a lot from our professional leaders about how those entering our workforce now have different motivations from most of us and how accounting professionals need to adjust recruiting and certain aspects of practice management to be successful in attracting and keeping the best and brightest. We are hearing from various sources that those in the millennial generation are perceived to be a bit less interested in the financial rewards of work and more interested in fulfillment. That group is often characterized as wanting and needing constant feedback about the quality of their work while having a need to be stretched by what they do. One of the things I find refreshing about this group is that they do seem to have a greater desire to want to give back than those in my generation did at the same point in our lives. It is interesting to me that this group is often perceived as being lazy. As you know, I work with college students every day, and I will tell you that I don’t see that. They are interested in fulfillment. They often talk about “work/life integration”. To them that seems to be a set of circumstances in which they enjoy the people they work with and are making a difference with what they do in addition to just earning a good paycheck. Frankly, I don’t know that I see that as a negative. It’s certainly different from the way I thought when I entered the profession, but I don’t know that it is a bad thing. How current practitioners might integrate that into the way an accounting practice is managed is something the leaders of our profession would like for you to give some thought to. Maybe it would be wise to let the new hires get a glimpse of the big picture a bit earlier. If they understand how their job helps clients to accomplish their dreams and provide financial security for themselves and their families, it is very likely to motivate them. Another interesting point related to practice management and millennials is the number of current accounting majors who choose to sit for the CPA exam. While the number of college students majoring in accounting is at an all-time high, the number of candidates sitting for the CPA exam has been flat for a while. In order to replace the Baby Boomers that are leaving the profession over the next few years, that trend will need to change. AICPA research indicates that one of the three major factors affecting a young professional’s decision on whether to sit for the CPA exam is the incentives offered by the employer including time off to study and compensation increases or bonuses tied directly to passing the exam. Food for thought for those looking for staff members that will be the ones to continue your practice and fund your retirement! There is no doubt that change in our profession is happening and will continue to occur. I think we would all be wise to study the factors creating those changes and attempt to manage them as best we can both for the benefit of the profession and ourselves. Best of luck to all of us on that adventure!

Lowell

Views and opinions appearing in this publication are not necessarily endorsed by the ASCPA. The deadline for submitting materials for publication is the first of the month preceding issue date.

Jeannine P. Birmingham, CPA, CAE, CGMA President and CEO

GR WTH It’s what CGMA stands for.

Diane L. Christy, Editor

A new designation representing accomplished professionals that drive and deliver business success, worldwide.

ON THE COVER

Find out more at cgma.org

Denesha Judkins, Jasmine James, Shaquilla Thornton and Maria Rives of Alabama State

as a membership service to Society members.

University at Accounting Interview Day 2015

THE ALABAMA CPA MAGAZINE

ASCPA Forms Professional Standards Committee Jason Miller, Chair

am excited to announce that in October the ASCPA established a Professional Standards Committee! This Committee will enhance membership benefits, as well as allow our Society to play a larger role in the standard setting process. The Committee’s primary focus is to support our membership in the area of financial reporting by evaluating and commenting on exposure drafts and informing the membership of accounting standard updates once issued. This focus follows the Society’s goal to protect, educate, and connect our over 6,700 members. We can protect our members by analyzing exposure drafts, collecting Committee and member feedJason Miller back on the exposures, and submitting comment letters on behalf of the Society. This feedback is critical to insure that standard setters are provided with the valuable insights of those who will have to implement the potential standards. Our Society represents a wide range of constituents ranging from small business to big business, government to private, sole practitioners to national firms. I feel it is important for feedback to be obtained from all affected groups. This is especially true for those groups who will have to implement changes but lack the resources to affect or properly implement change. As accounting standard updates are issued, we will educate members on the issuance and their primary effects. Within the last several years, I believe everyone has noticed an increase in the standards being issued. With this increased activity, it can often be difficult to track when standards are issued and when the standards take effect. By disseminating this information to our membership and posting to the Society’s various media feeds, we will provide our membership with another avenue to receive this critical information. Another great effect of starting this Committee is the ability to connect members. This connection starts by the initial volunteers who formed the Committee. I would personally like to thank Derrel Curry, Jeremy Blackburn, John Mastin, Mike Brand, and Rachel Godwin for taking time out of their valuable schedules to contribute to this worthy cause. Without this Committee, several of us may not have connected. In addition to the core group, this Committee will receive feedback and engage in conversations with our fellow members on items of interest to individual members. Also, for any members interested in being a sounding board to the Committee, please contact Jason Miller jmiller@anglincpa.com. A sounding board would be useful for us to bounce our ideas off other parties who would be affected by a particular standard being exposed. Again, I just want to say I am excited at the value this Committee can bring to our membership. I would like to thank Jeannine Birmingham, the officers, and the Board of Directors for forming the Professional Standards Committee. We look forward to serving you!

Driving to Miss Daisy N

o, that’s not a typo, it’s definitely Driving to Miss Daisy instead of Driving Miss Daisy. Your ASCPA staff is always looking at ways in which we can 1. make a contribution to the community, 2. make connections within the community and 3. inspire others to do the same. Roger Spain, an ASCPA member with Aldridge Borden, suggested getting involved with a local service for Montgomery area seniors. The Montgomery Area Council on Aging, MACOA, needs help with delivering nutritious, hot lunches through their Meals on Wheels program. They have funding for the food, and a way to get the meals prepared, but recent budget cuts eliminated some of their drivers. They are developing corporate sponsors to fill the gap. After a voice vote at the weekly staff meeting, it’s a done deal for ASCPA staff. Here’s how it works: the ASCPA will send two staff members to pick up meals from a local hospital for 8-10 MACOA clients. The volunteers are assigned a route for the same day each week and will deliver the meals to those same folks, week in, week out. That’s it, so simple. CPE Director Jessica Roberts spoke of her experience when she worked for the Central Alabama Community Foundation. “Because you see the same people every week, you really bond with them. You may be the only person who stops by their house that day and the contact is so meaningful – for both parties. They may want to chat for a minute or two! I was really sad when I learned one of my ladies had passed away. I’m excited that we are taking this on.” For more information on the program and to become a corporate sponsor in the Montgomery area, contact MACOA at 334.263.0532. Or for a program in your area, contact Meals on Wheels America, 888-998-6325, ww w.mowaa.org.

THE ALABAMA CPA MAGAZINE

Doing It Better

anaging your own accounting practice is a gratifying and fulfilling experience, especially if you’ve worked many years to make that dream a reality. However, many practitioners face similar pain points when it comes to organizing data, tracking projects and managing finances. In a business environment filled with complex client expectations, constant legislative changes and advancing technology, addressing these pain points by re-evaluating your internal work processes is more important than ever. Let’s take a look at some of the most common pain points of practice management and common sense approaches to solving them. 1. Organizing Your Client Data Needless to say, unorganized client data can lead to a complicated work environment and ultimately a disappointing client experience. We’ve all heard the horror stories of tax returns being sent to the wrong address or invoices going unpaid because a client moved offices. These problems often occur because most firms use numerous systems to address their compliance, accounting, payroll, audit, CRM, email and document management needs. With so many access points, client data is nearly impossible to keep up to date and organized. The simple answer to this challenge is a single database where changes and updates only have to be made one time. This is where an all-encompassing practice management system comes into play. With a single data entry point for all information, you can ensure consistency, accuracy and time savings for the entire firm—and this leads to a seamless client experience. THE ALABAMA CPA MAGAZINE

Managing an Accounting Firm Before you make the commitment to implementing a single system, however, make sure the owner or partners of the firm have bought in and are supportive of the process. If staff sees that management isn’t following the guidelines, they’re much less likely to comply. It’s also important to establish a champion within the firm to oversee the change. Give them accountability and clear measurements for success and make sure they have sufficient time to manage the process. Document the new process very clearly and make sure every member of the staff knows the firm’s expectations. Most importantly, make sure to properly train staff on the new process and follow up frequently to confirm their understanding and ensure that they’re following the steps properly. If they understand the benefits of using a single system and the ways in which it will help them get their job done more quickly, easily and efficiently, they will be much more engaged in the process.

2. Tracking Your Projects Whether you refer to it as workflow, due date tracking or project management, keeping track of your client obligations can be a big challenge. From current work to anticipated projects, it is imperative for a successful firm to keep track of who is working on what and what the real-time status is so that client questions can be answered in the same way, by any staff member. Further, your staff should have access to this information at any time and from any location. As we all know, clients now expect to call, email or text their firm and receive a response in real time. With an integrated project management system that is part of an overall practice management system, you can track all aspects of your firm’s projects, including client/contact management, resource management, notes and interaction tracking.

It’s important to establish a champion within the firm to oversee the change. Give them accountability and clear measurements for success and make sure they have sufficient time to manage the process.

As you evaluate and implement a project management tracking system, ensure that the system is not only easy to set up and implement but also allows for future growth and refinement, as the staff become more adept at tracking and updating the system. If the system is too complex and difficult to maintain, the staff will quit using it, which could result in a firm-wide breakdown in project tracking. You should also make certain that the system has a real-time dashboard and reporting function that allows any staff member in the firm to check on the status of a project in real time, in order to address any client inquiry quickly.

3. Managing Your Finances Many firms think they have a handle on where they’re making and losing money, and don’t see the need to keep track of it in detail. These firms are often surprised at the incredible visibility they get into their business when they implement a practice management system. In order to ensure the practice is running at its most optimal state, it’s important that you are able to answer questions about the type of work you do best, as well as which staff members are most productive and contributing most to the bottom line. It’s also vital to know which clients are the most profitable, as well as those clients for which you should raise fees or let go. By addressing common pain points with a comprehensive practice management system, a more efficient and productive work environment emerges, giving you more time to focus providing the best possible experience for your clients. It is important to realize, however, that making this change is a major undertaking. Without the support of the entire firm, it will be difficult to see the implementation through to completion. So, take your time, do your research, and make a thoughtful plan of action. If you do, you’ll undoubtedly realize the benefits are well worth the investment—and rest assured you’ll be providing your firm with a foundation of efficiency, productivity and growth for years to come. ________ Matt Jagst is director of product management of the professional segment with the Tax & Accounting business of Thomson Reuters. 5

MEMBERS IN MOTION PROMOTIONS AND NEW POSITIONS Jackson Thornton announced that Eden Thornton recently joined the firm as a senior manager. With more than 20 years of experience, Thornton will focus primarily on tax and assurance services for closely held businesses and the construction industry. She is a graduate of Troy University and is an active member of the Prattville Ro- Eden Thornton tary Club. Smith Dukes announced that Autumn E. Brown has been promoted to senior tax accountant. Autumn received her undergraduate degree with honors in 2010 from the University of South- Autumn Brown ern Mississippi and a masters of professional accountancy in 2011. James C. White, Jr. has been named a partner in Banks, Finley, White & Co., one of the oldest black-owned firms in the U.S. White is a graduate of the University of Maryland and has over 18 years of experience. He has worked primarily with publicly-traded companies with an emphasis on financial reporting. Wilkins Miller announced that Jack Johnson, Mandy Parker and Frank Smith have all been promoted to the position of senior accountant. Johnson’s area of special concentration includes audit and tax. Johnson became an intern for Wilkins Miller in 2013 and has now worked his way to senior accountant. He graduated from Auburn University in 2007 with a bachelor’s degree in English and completed his masters in accounting from University of South Alabama in 2013. Parker’s area of special concentration also includes audit and tax. Parker joined the firm in 2012, graduated from the University of Alabama summa cum laude in 2012 and has a master of accountancy from the University of South Alabama.

COMMUNITY NEWS Barfield, Murphy, Shank & Smith (BMSS) is pleased to announce their award as one of the Best Accounting Firms to Work for by Accounting Today. This is the seventh time the firm has been named to this prestigious list. Accounting Today invited firms from across the country to participate in a two-part survey. The first part consists of evaluating each nominated firm’s workplace policies, practices, systems, philosophy and demographics. The second part consists of an employee survey to measure their overall experience. Warren Averett Technology Group, a premier technology consulting and outsourced IT provider, and Kianoff & Associates, a leading business software consulting group, announce the joining of their firms. Their combined experience brings together bestin-class technology services, expanding the capabilities and resources, and creating additional opportunities for our professionals and our clients. Visit www.watechgroup.com/ kianoff to learn more about the merger.

REMEMBERING Robert Clarence Bibb, Jr. January 1, 1938 – September 3, 2015 Huntsville, Alabama / Certificate #839 Bob Bibb was a fifth generation Alabamian, a direct descendent of the second governor of Alabama, Thomas Bibb. He was graduated from Decatur High School in 1956 at attended the University of Alabama where he was a member of Pi Kappa Alpha. Following graduation he served in the U.S. Army 1962-64 and in the reserves 1964-67. He became a CPA in 1969. In 1978 he founded Bibb & Associates and was active with the firm until retiring in 2010. Bibb was active in the community and a fan of Crimson Tide football. The family has requested that memorial contributions be made to the Michael J. Fox Foundation, www.michaelfox.org or the Huntsville Parkinson’s Support Group, PO Box 18721, Huntsville, AL 35804.

HARD SHOES TO FILL? Where filling someone’s shoes is concerned, we get it. Fit goes beyond the shoe’s size to the style and comfort of the wearer. Otherwise, wouldn’t everyone walk around in the same shoes? We believe that when you connect the right person to the right job and the right individual to the right company, the shoes will be just right. We’re here to help you find the person to step into these shoes, And to make sure they can HIT THE GROUND RUNNING.

Jack Johnson

Mandy Parker

www.itacsolutions.com TECHNOLOGY | CORPORATE PROFESSIONAL/CLERICAL GOVERNMENT/ENGINEERING | ACCOUNTING/FINANCE

Frank Smith

Smith’s area of special concentration includes 6

audit and tax with a focus on contractor clients. Smith graduated from the University of Alabama in 2004 with a bachelor of science in finance. He completed additional accounting courses at the University of South Alabama in 2012 and was certified in 2015.

Providing temporary/contract, contract-to-hire, and direct hire staffing solutions. SOLUTIONS

Birmingham | Mobile | Huntsville | Nashville THE ALABAMA CPA MAGAZINE

Zoebelein on Tax Protect Your Client’s Continued Statutory Exempt Status and Have Your Clients Register Their Exempt Status Before January 1, 16 Important 2015 Changes to Alabama Sales, Use, and Lodging Tax Nota Bene: Statutory Tax Exemptions Expire 12/31/15.

he 2015 budget balancing act that consumed most of the regular legislative session (as well as two special sessions) produced only minor success. The first page in any government’s budget writing primer is increasing tax revenue. Sales and use tax has always been an easy target, and the 2015 legislative sessions proved no exception. I have highlighted some of the recent changes, as well as some prior changes that may impact your clients. Before I begin, I would like to thank Bruce Ely of Bradley Arant Boult Cummings LLP and the Department of Revenue for their help in educating this old goat on the finer points of Act No. 2015-237.

Act No. 2015-237 Requires Yearly Registration for Exemption. The Department of Revenue’s new requirement that entities (other than government entities) granted exemption from sales, use, and lodgings tax under Alabama Code §40-23-5 or Chapter 9 must now register and obtain an exemption certificate by 12/31/15 to keep their exemption in 2016 and beyond. The entity registers by filing Form STE – 1 by December 31st of 2015 and every year thereafter. Form STE-1 can be downloaded from the department’s website at http://revenue.alabama.gov/salestax/stexa1.pdf. According to the Department Representative, the entity will not be tax exempt in 2016 without the exemption. Any of your clients that sell to this group can no longer rely on §40-23-5 or other similar exemptions, and must obtain the tax exempt’s certification of exemption for all sales after January 1, 2016. Failure to obtain the exemption certificate by January 1, 2016 will subject the former tax exempt entity to eventual revocation of their exemption. According to the Department Representative, here is THE ALABAMA CPA MAGAZINE

how the Department plans to administer the sanction against the tax exempt failure: “If the entity fails to obtain a certificate prior to January 1, 2016, their current exemption will be invalid until: 1. They obtain a certificate. 2. Any subsequent certificate must be renewed prior to expiration and reporting requirements must be met before a certificate will be renewed. 3. If a certificate is not renewed prior to the expiration date, the entity will not be allowed a tax exemption until a certificate is obtained. 4. If an entity fails to meet the reporting requirements it may be barred from the use of any certificate for a. up to six months for the first offense and b. one year for the second offense. c. On the third offense, the entity shall be barred from the use of any certificate until such time as the entity is authorized to obtain a certificate of exemption pursuant to a joint resolution by the Legislature. Why this new change? According to the Department Representative, it was to meet the requirement of quantifying the loss revenue from this tax exemption, which must be reported to the Legislative Fiscal Office (LFO) to provide the Alabama Legislature for budget purposes. Act No. 2015-448 Simplified Seller Use Tax Remittance. This Act allows out-of -state vendors to use a Flat 8% local tax effective October 1, 2015 (tax returns due November 20, 2015). It also allows the out-of-state vendor to participate in a program to collect, report, and remit a flat eight percent (8 %) seller use tax on all sales made into Alabama. An eligible seller is one that sells tangible personal property or a service into the state of Alabama from an inventory or location outside the state, but does not have a physical presence in the state. This is a long overdue measure that this writer has championed for many years. Hopefully the simplification will lead to more compliance and stopping the revenue loss on internet sales. Other Revenue Raiser • ncrease of 15 cents for each prescription filled or refilled for a citizen of Alabama effective 9/1/15.

• Act No. 2015-536, which imposes a secondary supplemental privilege assessment at an annual rate of $401.28 or $33.44 a month for each bed in a nursing facility. This amount will increase the total annual nursing facility rate from $4,028.04 to $4,429.32 or $369.11 per month per bed. This change will be effective October 1, 2015. One last note on sales tax collection & exemptions for your retailing clients: • Just like your jar of peanut butter, all Department-issued sales tax exemption certificates now have expiration dates, including manufacturers. So be watchful the ones you have are current for the date of sale. Beginning January 1, 2016, all vendors must obtain a copy of the certificate of exemption before selling ex-tax unless selling to a governmental agency. • I tell my retail clients to err on the conservative side and charge sales tax when in doubt. Failure can mean a profit loss of eight to ten percent, not counting interest & penalties. • Contractors & Subcontractors please note: Form STC-1, Sales and Use Tax Certificate of Exemption for Government Entity Project. Exemption Certificates will be issued as of the project start date or the received date of the application. If, upon receipt of the application, the project has already commenced, the certificate will be issued as of the received date of the application. Any purchases made prior to the issuance of a certificate will not be exempt. I hope this has been somewhat helpful. Have a wonderful holiday season and a Happy New Tax Year 2016! -Tom _____ Tom Zoebelein, CPA, Tax Manager 110 Office Park Drive, Suite 100, Birmingham, AL 35223, 205-323-5440 |www.pearcebevill.com tzoebelein@pearcebevill.com To access the relevant information on the ADOR website, go to www.ador.state.al.us. Click on the following: Divisions/Property Tax tab/Taxes Administered by this Section/ Personal Property tab 7

Congratulations to the 2015/16 ASCPA Educ

“My scholarship has given me the peace of mind to focus on my studies. It also helped me attend the National Association of Black Accountants (NABA) Southern Region Conference in Atlanta in September.”

Lauren Cleveland Auburn University

Christina Glass University of Alabama

Stephanie Howe University of Montevallo

Nichole Green, Alabama State University

Aubrey Dodt University of Alabama at Birmingham

Rebecca Glosemeyer Auburn University

William Baldwin University of West Alabama

John Borowski University of Mobile

Jessica Brown University of South Alabama 8

Tim Hufford University of Alabama in Huntsville The Alabama Society of CPAs’ scholarship helped alleviate the financial burden on me and my family, especially with my husband and son in college concurrently. This scholarship allowed me to concentrate more on my studies instead of on ways to make my tuition payments. Thank you Alabama Society of CPA! ennifer Saringo Paris J Troy University Dothan

Summer Faulkner Troy University

Kalyn Fuller Samford University University of Alabama

James Hayley University of Mobile

Symone Husbands Tuskegee University

THE ALABAMA CPA MAGAZINE

cational Foundation Scholarship Recipients

Demetrius Johns Athens State University

Ambur Love University of North Alabama

Josh McGowan Troy University

Ashley Purvis Spring Hill College

Michelle Rogers Troy University Montgomery

THE ALABAMA CPA MAGAZINE

Quala Thompson Athens State University

“Being a recipient of the Alabama Society of CPAs’ scholarship has allowed me to spend less time at work and more time pursuing my goal of obtaining my Masters of Accountancy and becoming a CPA. I am extremely grateful for their generosity and investment in my education and future.”

Chang Park University of Alabama at Birmingham

“Thanks to the ASCPA scholarship I have been able to pursue higher education through the MAcc program. Without a doubt I would highly recommend to all accounting students to join the ASCPA, not only for its scholarship program, but it fantastic networking opportunities as well.” Walter Dulaney Auburn Montgomery

Brianna Roberts Jacksonville State University

Jasmine Pettaway University of Alabama

Chelsea Rollo Samford University

Kendall Williams Alabama State University

Kaylen Stanley University of Alabama

Bryan Womack Alabama State University 9

ASCPA Educational Foundation

2015 EDUCATOR CONFERENCE

John Shank, Chair

he Educational Foundation was begun in 1967 as a way to support college accounting majors. The fund itself has grown through your generosity, and the awards have also grown, now providing $2500 for qualified students. The board meets quarterly to discuss Early each year applications are distributed to department heads at 23 college accounting programs. Both ASCPA staff and the Educational Foundation Board of Directors screen and select the recipients for general scholarships at each of the schools, for two Kassouf & Co. endowed scholarships at the University of Alabama and at Auburn University, for the Pearce Bevill Minority Scholarship at the University of Alabama at Birmingham, and for the 5 diversity in accounting and 2 financial need scholarships (Chairman’s Awards) created as a result of the Fortune Forward capital campaign in 2011. We hope that you will continue to support the good works of your ASCPA Educational Foundation. As more and more career opportunities are presented to our youth, we need to make sure that we reach the best and brightest and help create an environment (which includes financial considerations) that keeps them in our profession. We also want to offer a helping hand to those who may not be financially able to pay the high cost of a college education, just like many of us were helped. Did you know that, through your Educational Foundation, we gave 32 scholarships for a total of $77,000 this past year? Please consider the Educational Foundation as you plan your charitable giving throughout the year and, in particular, at the end of the year. We would also be happy to talk to you about planned giving opportunities. Please reach out to Diane Christy at 334.386.5752, dchristy@ascpa.org.

Thank you to all the amazing speakers at the 8th annual Educator Conference, held on October 9. Special thanks to Mike Duffy and Karen Reetz of Wiley CPAexcel, sponsor for the program. To learn more about the work of the Education Committee and to volunteer contact Dena Mitchell, dsmitchell@troy.edu.

Educational Foundation Board of Directors The board is currently comprised of four immediate past chairs of the ASCPA and two educators. They meet quarterly to discuss the board’s fiscal condition, to review proposals for projects or support outside of annually-awarded academic scholarships and to conduct other business. John P. Shank, Chair

Barfield, Murphy, Shank & Smith

Lowell S. Broom

Samford University’s Brock School of Business

Renee B. Hubbard

Jackson Thornton & Co.

Amanda N. Paul

Troy University School of Accountancy

E. Lamar Reeves

Smith, Dukes & Buckalew

Steve A. Shelton

Way, Ray Shelton & Co.

In 2011 the Foundation conducted a capital campaign to increase its endowment. More than $620,000 was raised, resulting in an increase in the amount of each scholarship award from $1500 to $2500. ASCPA interns receive the equivalent amount in a stipend at the conclusion of their roughly 13 week intern period.

THE ALABAMA CPA MAGAZINE

ETHICALLY SPEAKING:

Let’s Not Forget Who Brought Us to the Dance George W. DuRant, CPA/ABV, CFF, ASA

ssume one of your tax clients instructs you to provide select information from your file to a third party. You know the information is incomplete and would be misleading for the third party’s specific use. What do you do? Likely, if you are a tax return preparer not subject to the AICPA’s Code of Professional Conduct, you would send the information as instructed because you would not want to risk losing the client’s business. As long as no laws are broken, that would be just good business practice. If you are an attorney, you might do the same thing, but for a different reason. Many attorneys believe they are ethically obligated to advance a client’s interest within the bounds of the law without necessarily considering the morality of a client’s actions. Thus, as long as no laws are broken, many would consider it just good legal practice. However, and in contrast to business people and attorneys, CPAs are generally seen as having a greater ethical obligation to third parties and the public. So much so that the public has reason to think, and tends to think, of CPAs as watchdogs for the public interest. To understand why that is so, it helps to remember who brought us to this dance – it was the public. Public accounting as a profession in the United States got its big kick-start in the 1930s with passage of the Securities Acts of 1933 and 1934. That legislation was responsive to the stock market scandals of the 1920s and early 30s – in particular the 1932 Swedish Match Company investment scheme that, in current dollars, might rival investor losses in Enron. For the first time, federal law required public companies to include audited financial statements in their registration statements and annual reports. At the time, there was considerable debate over whether the government should do the auditing. The prestige of public accounting is owed, in large part, to those who persuaded the U.S. Senate Committee on Banking and Currency not to assign the external audit function to a government agency. Essentially, the argument was, and continues to be, that CPAs - in fact all accountants – can be trusted to be accountable to the public at large. Recently, Olivia Kirtley, former chair of the AICPA board of directors and current president of the International Federation of THE ALABAMA CPA MAGAZINE

Accountants (IFAC), posted the following on the AICPA Insights blog: “I’ve always thought the world would be a better place if only there were more professional accountants working throughout organizations. Each and every day, we bring transparency and accountability to businesses and governments around the globe. We promote financial integrity, expose wrongdoing, and lift the veil of uncertainty to shine light on the truth. When you think about it, we are much like the Swiss-Army knife for modern business—equipped to bring solutions in countless ways.” Without regard to the type of service performed (audit, tax, litigation support or other services), the AICPA Code of Professional Conduct obligates members to always act in the public interest, always honor the public trust, and always demonstrate a commitment to professionalism (§0.300.030.01). Our obligation to the public interest is far more than just a lofty aspiration. George Oliver May, one of the giants of the accounting profession observed in 1932, that accountants can be seen to have greater ethical obligations to persons who are not clients than other professionals such as lawyers and physicians. As the late Harvey Kapnick (chairman and chief executive of Arthur Andersen from 1970 to 1979) put it: “The accounting profession is – or should be – the link between responsible business and the public in providing adequate financial data in an understandable manner for use in arriving at sound, unbiased conclusions about the effectiveness of business enterprises in managing our economic wealth for the overall benefit of society.” 1 Kapnick succinctly described the accounting profession’s public service calling. It is our integrity and objectivity that warrants the public trust. It is our fidelity to that trust that makes us professional and different from other business people and attorneys. Acting in the public interest can and often does conflict with a client’s interest or the CPA’s self-interest. The Code provides that CPAs must resolve conflicting pressures from clients, credit grantors, governments, employers, investors, the business and financial community, and others by acting “with integrity, guided by the precept that when members fulfill their responsibility to the public, clients’ and employers’ interests are best served” (§0.300.030.03).

The “conflict” dilemma described at the beginning of this column has a multitude of variations in practice, all with the same solution. For example, a client asks you to prepare a tax return based on information that you know or suspect is wrong; what do you do? Or, you are asked to prepare cash basis financial statements for an insolvent client seeking capital; what do you do? In each case, acting with integrity and objectivity in the public interest requires subordination of all other interests, including the CPA’s own interest as a business person. Fortunately, most clients do want to act morally and legally. When tempted to do otherwise, they welcome a virtuous response from their CPA. For the few who do not, we should remember that helping them obtain an unjust result is the same as helping them to steal. We are at the dance because the public trusts us. Let’s keep it that way. ________ George DuRant is a member of DuRant, Schraibman & Lindsay, LLC in Columbia, South Carolina. He currently serves as a member of the AICPA’s Joint Trial Board and is a past president of SCACPA’s Central Chapter. This article was reprinted with permission of the SCACPA. Kapnick, Harvey, Accounting and Financial Reporting In the Public Interest, Arthur Andersen & Co. 1974, Vol. 1

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5. Tell us about your experience as an accounting major at Alabama State.

Fall Intern Profile

Rachel Cochran 1. When did you decide you wanted to major in accounting? Did you take any courses in high school which influenced you? I decided I wanted to major in accounting my senior year of high school. I had always wanted to be a teacher. However, the conversations I overheard from both primary and secondary school teachers expressed dissatisfaction with their pay but also how much they loved their jobs. I knew as an accounting major I would most likely always be able to build a career, be compensated well, and teach at the college level if I desired. Unfortunately, at my high school, due to its small size there were limited classes outside of core subjects and those electives required for graduation.

talk to. You can go to her to talk about things other than school when needed and she will listen intently, with an open-mind, and give her honest opinion. She is an extraordinary teacher and I have learned so much from her that will be beneficial to my future career. 4. Was there a member of your family or a family friend who was a CPA? I have a great uncle who is a CPA and passed the exam his first time. Though I’m not super close to him, I keep [his achievement] in the back of mind as motivation. It’s a reminder that I can accomplish anything I set my mind to.

I graduated summa cum laude from Calhoun Community College in the spring of 2012 with an A.S. degree in general studies and transferred to Alabama State the following fall. As a senior at ASU, I can say my experience has been more than I ever imagined. I’ve made some life-long friends with students and faculty, I have been an active member of the business honor society, Delta Mu Delta (I’m now the chapter president), and have learned so much more about accounting than I thought possible because of the outstanding professors and their experiences in the field. 6. What are some community service projects that you’ve been involved with? This past August I participated in Devoted 24/7. It’s a week that the students of the Landmark Campus Ministry, along with other campus ministries, dedicated their time to being devoted to God in many different ways. The event for the Friday of that week was devoted to service. I went with a group to Common Ground Montgomery. We took Continued on page 15

2. O ur Young CPA Board is working hard on a student recruitment campaign. What would have been the most persuasive message for them to bring to you as a high school student? As a high school student, I’d say simply telling me about the profession in general, what practitioners do on a daily basis and relating personal experiences would have had a tremendous impact. Maybe sharing handouts with some of the basic principles of accounting would illustrate the nuts and bolts. Personally, I didn’t know much about the accounting profession. As a result, I did some research and couldn’t resist articles titled “The Top 10 Paying Careers” or “The Top Fastest Growing Professions.” I know that a Young CPA’s own story would help me gauge whether I could see myself in their situation.

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I’ve had one mentor in accounting and that is one of my professors at Alabama State University, Ms. Jorja Bradford. She takes the time to develop relationships with her students and is so approachable and easy to

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Meet the Young CPA Cabinet RODNEY HAWKINS – Chair Supervisor, Himmelwright, Huguley & Boles, Opelika Hawkins is from east Alabama, growing up in Alexander City and living currently in Opelika. So naturally he attended Auburn University, ended up with his BSBA and MAcc. On his bucket list are travelling to Ireland and the UK, which he also considers his ideal vacation destination. If he weren’t a CPA he’d be a skilled bluecollar guy, most likely a welder.

BEN ADAMS – Staff accountant Byrd, Smalley & Adams, Decatur This UA grad loves sports and would be a coach if he were not a CPA. His ideal vacation spot is on a Caribbean island with an endless supply of bubblegum or sweets.

BEST MOMENT AS A CPA: “Being on the front cover of the ASCPA magazine.”

ANDREA ARMSTRONG – Senior accountant Jamison Money Farmer, Tuscaloosa Armstrong has a strong affinity for two things: chocolate and the Dominican Republic. She honeymooned there and recently went on a mission trip with Feed My Starving Children. An amazing experience for her. She’d work as a missionary full-time if she were not a CPA. Endless supply of…chocolate. Favorite late night snack….chocolate. She graduated from the University of Alabama with both undergraduate and MAcc degrees.

LORI HALL – Vice Chair Bank Independent, Muscle Shoals A native of Tuscumbia and resident of Muscle Shoals, Hall earned both her bachelor’s degree and MBA from the University of West Alabama. She is assistant controller and manager of the accounting department at Bank Independent. Hall wants to travel and her destination is “everywhere”. I’D LIKE AN UNLIMITED SUPPLY OF: “Groceries. Then I wouldn’t have to shop for them.” ALLISON GUICE – Secretary Senior Manager – Jackson Thornton, Montgomery Guice attended Auburn Montgomery and has both an undergraduate degree and MBA. She has a passion for children and has winning Survivor on her bucket list. If she weren’t a CPA she’d be a ballet dancer or magazine editor. Leadership Academy Class II IF I COULD HAVE AN ENDLESS SUPPLY OF ANYTHING IT WOULD BE: “Key lime pie” TRENTON SHEPHERD – Golf Chair Shepherd has a passion for the outdoors. He has the Master’s golf tournament on his bucket list. He’s from Northport and didn’t stray very far from home to attend the University of Alabama. He has both his bachelor’s and MAcc from UA. BEST MOMENT AS A CPA: “Assisting with the Young CPA Charity Golf Tournament this year and learning firsthand the impact it has on The Exceptional Foundation.” JEFF SIMS – Classroom Blitz Chair Manager - Dent, Baker & Co., Birmingham From Pinson, Alabama, Sims has a passion for teaching others and would be a teacher if he were not a CPA. He has a fear of heights, but has an Antarctic cruise or rafting the Colorado River through the Grand Canyon on his bucket list! Leadership Academy Class III LATE NIGHT SNACK: “Popcorn or Fruit Loops”

BUCKET LIST: “Attending some of the world’s premier sporting events.”

WHAT SCARES YOU: “The dark. My big brother made me watch Are You Afraid of the Dark? when I was little!” JOHN BEDSOLE Kalifeh, Bedsole & Company, Mobile Leadership Academy Class IV A graduate of both the University of Alabama and the University of North Carolina at Chapel Hill, Bedsole has an undergraduate degree and two master’s degrees – an MA in economics and a MAcc. On his bucket list is obtaining his SCUBA certificate, although his ideal vacation spot is Montana! He uses late night injections of McDonald’s French fries to keep him going, but fears phone calls on April 14. IF I COULD HAVE AN UNLIMITED SUPPLY OF ANYTHING: It would be Tuna sashimi. CATHERINE CASEY – Senior Accountant Carr, Riggs & Ingram, Birmingham Casey is a graduate of Rhodes College and completed her master’s degree at Samford. She has a passion for working with local governments and small businesses and considers Monterey, California an ideal vacation destination. If she weren’t a CPA she’d be a public health professional, snacking late night on hummus and pita with an unlimited supply of Icebox Cold Brewed coffee (Birmingham-based company). ON MY BUCKET LIST: “Seeing the northern lights.” KATE FLUKER – Supervisor Barfield Murphy Shank and Smith, Birmingham Fluker is a self-described Army brat whose footloose upbringing has given her the motivation to travel extensively. Visits to all seven continents are on her bucket list. She’d have popcorn to snack on and a personal chef serving healthy meals. Her personal THE ALABAMA CPA MAGAZINE

FALL INTERN PROFILE Continued from page 13 faith has led her to mentor high school girls. Currently attending Class V of Leadership Academy. BEST MOMENT AS A CPA: “Observing the abstract become real when you consult with a client, putting a human face on facts and figures.” DANA HESS, Tax manager – estate and trust tax specialist – Jackson Thornton, Montgomery Hess was a double major in accounting and IS while at Auburn. She wants to visit each state at least once, with a generous supply of pumpkin spice cookies to fuel her. She is passionate about learning new software and equally passionate about enjoying college football with her family. (It was such a close call that she didn’t know which was the better answer!) Leadership Academy alumna IF I WERE NOT A CPA: “I’d like to open an animal rescue center. There is something soothing about being around animals that just makes everything better.” BENJAMIN MACDONALD – Senior staff accountant Joan Sanders & Assoc., Anniston MacDonald is a man with lists. On his bucket list: “I would love to travel to every country in the world.” He loves the outdoors and a mountain retreat in Colorado is his idea of an ideal vacation. Big picture fears are unfunded pension liability, the state of the world’s economy and a disregard for planet earth and its resources. IF I WEREN’T A CPA I’D BE: “An insurance salesman. As a young boy, I created my own fictitious insurance company. I had an old typewriter and I would create invoices for the policies that I sold to my sister and her dolls. I created a checkbook and would pay bills and issue refunds to my customers.” CARLTON MELTON – Senior accountant McNorton, Ishee & Jones, Mobile Melton is a Mobile native who attended Auburn Montgomery and graduated with his undergraduate and MBA degrees. His best moment as a CPA was making a presentation to accounting students at Spring Hill College. If he weren’t a CPA he’d be “a janitor at a college even though I’d be smarter than most of the people there. Sometimes, while I’m working, I’ll see an unfinished equation on the blackboard and just solve it. And my best friend would be Ben Affleck.” Leadership Academy Class III WHAT SCARES YOU: “Spiders, Sasquatch, unicorns and Very Large Sea Creatures.”

THE ALABAMA CPA MAGAZINE

on the project of reconstructing a house. It’s the first time I had participated in community service with construction. I really enjoyed it and definitely plan on doing more service activities like this! 7. Have you worked while going to school? If so, how have those experiences contributed to your accounting career? When I was attending Calhoun, I worked at Lowe’s as an associate in the paint and home décor departments. I was also a cashier when needed. I also worked as a receptionist in a pediatric office. I was very appreciative to have flexible jobs allowing me to work, go to school and still have enough time for homework. From both of these jobs I learned the importance of customer/patient satisfaction, multi-tasking, and healthy relationships with co-workers. I also learned how to manage my time better and my money. All of these things have contributed to my future accounting career by showing me to be a better employee and able to help my future clients in the best manner possible. 8. D o you have brothers and sisters? Tell us a little about them. I’m the oldest of three and the only girl. My brothers are Jacob and Joshua Warren. Jacob recently began his college education at Calhoun Community College and plans to major in biology and teach and coach high school students. He enjoys working out, playing games, and spending time with family. My younger brother, Joshua, is a junior at New Hope High School. He plays varsity football and basketball. He enjoys spending time with his friends, doing anything that involves being outdoors, and spending time with family. He plans to join the military after graduating in 2017 in hopes of becoming a Navy SEAL. 9. You’re about to become a military wife. What are your plans to finish the steps leading to the CPA? Because my husband will be commissioned in the Air Force in the spring, I will be moving quite often in the next several years. I’ve decided to take my first year after graduation off to study for the GRE and the CPA exam and to look for on-line master’s programs in accounting or business administration. 10. And after that, what does your professional life look like? After my recent internship with governmental accounting at the Retirement Systems of Alabama (RSA), I’ve realized that working in a large-scale environment is not for me. I think I’d rather work for a small-town CPA firm. Having a family is really important to me and being in a flexible situation will enable me to find balance between my work and home lives.

Learn how to claim approximately $10.5 million in state tax credits for the 2014 tax year. Schedule your �irm’s Lunch & Learn

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Presented by the Alabama Opportunity Scholarship Fund (AOSF), the Alabama Accountability Act (AAA) Course “Tax credit donations focuses on the AAA legislation, give me an opportunity!” taxpayers’ bene�its, Scholarship Granting Organizations, and how to claim dollar-for-dollar tax credits. For more information or to schedule your �irm’s Lunch and Learn, contact Bri Jackson at 205-206-7803 or bjackson@alosf.org.

AOSF’s 2014-2015 School Year: 2,851 students were awarded. 12,000 students applied. $16,899,434 in scholarship funds were distributed. www.alabamascholarshipfund.org 16

P.O. Box 59188

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205-206-7803

THE ALABAMA CPA MAGAZINE

Ethics Committee

$6&3$ 9ROXQWHHUV Education Committee Dena S. Mitchell, Chair Dr. Mark Lawrence Garrett Allen Dr. Lowell Broom Dr. Jim Byrd Tiffany DeRoy Brittany Harris Dr. Jan Heier Charlie Hickman Dr. Tom Noland Gerald Pentecost, Jr.

YOU are the key to the ASCPAâ&#x20AC;&#x2122;s success!

Federal Taxation Committee Joe B. Abbott, Jr. G. Allen Cave, Jr. Jake R. Culotta, Jr. Carol E. Gilliland Laura Q. Hanks Renee B. Hubbard Kendall T. Jordan, Jr. Gerard J. Kassouf Diana S. Knight George W. Lorimer, II Frank M. Messina Jim L. Richardson Dr. Kaye F. Sheridan Timothy B. Smith Glen H. Strickland

Audit Committee Charles H. Adams, Chair J. Brian Barksdale Steven M. Baranco Lucinda S. Bollinger Phyllis S. Ingram Doug L. Smith THE ALABAMA CPA MAGAZINE

Gary S. Anglin, Chair Catherine M. Bostrom Daryl M. Feige Gregory B. Guin S. Jon Heath Donnie Holder William A. Julian J. Kevin Smith Timothy B. Smith Richard A. Turpen

State Taxation Committee Thomas C. Zoebelein, II, Chair Martin R. Abroms Jane B. Bochnak John C. Boohaker Frank D. Brown Roger F. Bryant G. Allen Cave, Jr. Vivian Chateau Edward F. Cutter William A. Dow Wallace Dunn, II Michael A. Frost Larry B. Gilley Whitcomb H. Guerin Henry H. Haisten, III David L. Harwood Renee B. Hubbard William B. Hughes, Jr. Stanley C. Huner Robert M. Hunt, Jr. Clifton T. Jackson Leon M. Kelley

Gregory P. Logan Michael E. Mason Justin L. Mitchell Jeremy D. Mosteller Cathy A. Mozingo Darren L. Neuschwander Karen R. Poist Lyvonnia S. Poppell Lamar Reeves James L. Richardson Elizabeth D. Sasser Dr. Kaye F. Sheridan Jeffrey M. Sims, Jr. Kimberly B. Smith Kimberly D. Tarnakow Rachel M. Taylor William T. Thistle II Peggy R. Wall James A. Watson

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CLASSIFIEDS

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Kathy Brents, CPA, CBI, Cell 501.514.4928 Office

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It's the simple things which speak loudest. Have a wonderful Thanksgiving holiday. The Alabama Society office will be closed on November 26 and 27.

Presorted Std US Postage PAID Permit No. 131 Montgomery, AL NOVEMBER/DECEMBER

2015

The Alabama Society of Certified Public Accountants 1041 Longfield Court P.O. Box 242987 Montgomery, AL 36124