AZ CPA January 2016

AZ CPA January 2016

Securing Arizona’s Future Workforce

Making Education a Priority

Young Professionals’ Community Service Project TRANSFORMATIONAL LEADERS

The Arizona Society of Certified Public Accountants y www.ascpa.com

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2016 Arizona Tax Guide Order the only comprehensive guide on Arizona taxes.

Authors: Pat Derdenger, Steve Rodis and Ed Zollars

Spiral-Bound Book:

❒ Members of ASCPA,

New in the 2016 Arizona Tax Guide:

• Sales Tax: The new MRRA (maintenance, repair, replacement and alteration) exemption for service contractors took effect on Jan. 1, 2015.

Phoenix Tax Workshop, State Bar of Arizona or Enrolled Agents: $89

❒ Nonmembers: $109

The Arizona Tax Guide includes the following guides: • The Arizona Income Tax Guide is a comprehensive and easy reference guide that highlights the differences between Arizona and Federal income tax law and provides references to the Arizona Revised Statutes for a more in-depth analysis. It contains individual, corporate, partnership and trust tax differences, including tax tables, and is arranged in a manner that facilitates research on any topic.

• The Arizona Sales and Use Tax Guide is a resource for anyone preparing or filing Arizona and city sales and use tax returns. The guide details the various sales and use tax rates that apply to each type of sale or product as well as the many exceptions, administrative provisions and Model Cities Tax Code provisions.

• The Arizona Personal Property Tax Guide outlines the nature of the tax, reporting requirements, analysis of forms, audit and appeal procedures and small business exemptions.

• The Arizona Unclaimed Property Guide covers Arizona rules that apply to unclaimed property, how to report and pay, and how to file your claim.

Electronic PDF:

❒ Members of ASCPA, Phoenix Tax Workshop, State Bar of Arizona or Enrolled Agents: $79

❒ Nonmembers: $99 *Call (602) 252-4144, ext. 200 for special pricing on orders of five or more.

Order and learn more about the guides at www.ascpa.com Name ___________________________________________ Company ________________________________________ Address ________________________________________ City ___________________State _____ Zip ___________ Phone __________________ Fax ____________________ Email ____________________________________________

❒ CPA ❒ Attorney ❒ EA ❒ Other: ________________

Method of Payment: ❒ Check ❒ VISA ❒ MasterCard ❒ American Express Name on Card ___________________________________ Card Number ____________________________________ Exp. Date ____________ Amount $ ________________ Signature of Cardholder__________________________

Please return this form and payment to:

Arizona Society of CPAs 4801 E. Washington St., Ste. 225-B Phoenix, AZ 85034 Fax credit card orders to: (602) 252-1511

Sales tax, standard shipping and handling prices are included.

*The ASCPA will be processing checks submitted in payment as an Electronic Funds Transfer (EFT) transaction. Funds may be withdrawn from your account as soon as the same day we receive your payment.

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AZ CPA The Arizona Society of Certified Public Accountants President & CEO

Cindie Hubiak

Editor

Patricia Gannon

Advertising

Heidi Frei

Board of Directors Chair Chair-Elect Secretary/Treasurer Directors

Rob Dubberly Greg Nelson Molly Montgomery Mike Allen Brenda Blunt Teresa Finley Gary Fleming Randy Fletchall Mike Holt Bill Judge Jennifer Nordstrom Mark Patton Vanesa Romero Curtiss Smith Nancy Thomas

Immediate Past Chair Anita Baker AICPA Council Members

Chapter Presidents Southern Chapter Northern Chapter

The Right Call in Estate Controversy and Financial Exploitation.

Cathy Poore Bethany de Alva Southwest Chapter Jennifer Sullivan North-Central Chapter Ellen Carpenter AZ CPA is published by the Arizona Society of Certified Public Accountants (ASCPA) to provide information, news and trends in the profession of accounting. It is distributed 10 times a year as a regular service to members of the Society. The ASCPA, its members, board of directors and administrative staff assume no responsibility for advertisements herein. The ASCPA and the above people also assume no liability for business decisions made by readers in reference to statements and/or claims in articles or advertisements within this publication.

Opinions expressed by contributors are not necessarily those of the ASCPA.

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Telephone (602) 252-4144 AZ Toll-Free (888) 237-0700 www.ascpa.com

AZ CPA

Volume 32 Number 1

January 2016

Features

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In it for the Outcome — Not the

Income!

ASCPA Young Professionals pitch in to make a difference.

by Kate Banker, Marissa Graves & James Sean McGettigan

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Improving Education Vital to Arizona’s Growing Economy The important role education plays in the future of the Arizona workforce.

by Michael Chesin, CPA

21

AZ CPA Quick Quiz Read the magazine and take this short quiz to get an hour of CPE!

Arizona Society of Certified Public Accountants 4801 E. Washington St., Suite 225-B Phoenix, Arizona 85034-2021 www.ascpa.com

18

Six Capabilities of Transformational Leaders

It’s not only tenure that counts, but also certain skill sets that position individuals to move into leadership roles.

by Samantha White

Columns & Departments Chair’s Message by Robert E. Dubberly, CPA

6

Members News

7

A Dash of SALT by James Busby, Jr., CPA

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Quick Quiz

21

Classifieds 22 JAN. 2016 AZ CPA

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ASCPA Chair’s Message

Advocacy — My Perspective In October, I had the privilege, along with Cindie Hubiak, Greg Nelson, Randy Fletchall, Armando Romano and Karen Abraham, to represent Arizona at the American Institute of Certified Public Accountant (AICPA) Fall Council and Annual Meeting.

by Robert E. Dubberly, CPA

Through my involvement with both the Society and the AICPA, I truly believe ongoing advocacy is a critical component to the longevity of the CPA brand.

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AZ CPA JAN. 2016

This conference brought together delegations from every state in the nation and included members from the District of Columbia, Guam, the U.S. Virgin Islands and Puerto Rico along with the Board of Directors of the AICPA. Also, dignitaries from other organizations such as the National Association of State Boards of Accountancy were in attendance to observe and, in some cases, to participate in the meeting. The agenda included business and regulatory updates, a professional issues update, a discussion on audit quality, a report on the future of the CPA exam, and reports from the finance and operations organization and the AICPA’s audit committee. The event ended with a report from the nominating committee and the induction of Tim Christen as the AICPA’s 2015 – 2016 Chair.

Throughout the several days I was at the conference, I met new people and reconnected with others that I’d met at previous meetings. It was a wonderful opportunity to get to know colleagues from across our country and participate in valuable and interesting discussions surrounding issues impacting our profession at both the national and state level, such as the CPA pipeline and audit quality.

As I think back on our discussions, one common topic comes to mind — advocacy.

Representatives from across our nation, regardless of whether they were in public practice, industry or government, all shared the common goal of protecting and enhancing the CPA brand. We, as professionals, as well as representatives of our organizations, clearly understand the responsibility we assume in endeavoring to guarantee the profession’s sustainability for future generations.

Due to differences in our respective marketplaces, we may not always have the same concerns, but we certainly seem to have many more that unite us. For example, diversity and inclusion was a topic discussed at this meeting, and is an area that appears to be relevant to all, regardless of geography. Today, more than ever before, employers, employees, customers and clients all expect, and in many cases demand, a diverse workforce. To remain relevant, the profession, and its representatives, must advocate for this evolution.

Those conversations at the fall council meeting left me thinking more specifically about Arizona. During my time volunteering with the Arizona Society of CPAs, we have spent countless hours discussing ways the Society can support CPAs in our state. One example that often comes to mind includes audit firm rotation and the Arizona State Board for Charter Schools. Not too long ago, a law was passed which required audit firm rotation at Arizona charter schools. Once the Society became aware of this development, we quickly worked with our lobbyist and the legislator who sponsored this bill to educate him about the unintended consequences of the legislation. Through these efforts, the law was subsequently repealed. Further, because of the ASCPA’s education efforts, the Board of Directors for the Arizona State Board for Charter Schools determined that it would be useful to have a CPA on their board. The ASCPA assisted them in identifying a qualified candidate.

Representing the state of Arizona at the AICPA Council meetings this last year has been very rewarding and has further inspired the pride I have in being a CPA. Through my involvement with both the Society and the AICPA, I truly believe ongoing advocacy is a critical component to the longevity of the CPA brand. n

Member News The 2015 CFO of the Year Awards, presented by FEI (Financial Executives International) recognizes professionals for their outstanding performance in roles as corporate financial stewards. There were 460 registered attendees and 37 finalists for four awards. Three of the four award recipients are Society members: Bryce Hancock, BeyondTrust Software, Inc.; Katherine Mills, Donor Network of Arizona; Larry Seay, Meritage Homes Corporation.

Phillip R. McCollum, Jr., CPA, has joined Henry & Horne, LLP as a senior manager in the firm’s tax department.

2015 AICPA/CPA-SEA Leadership Conference: (L to R) Adela Jiménez, ASCPA COO & CFO, Kimberly Ellison-Taylor, AICPA Vice Chair, Greg Nelson, ASCPA Chair-Elect, Cindie Hubiak, ASCPA President & CEO, and Barry Melancon, AICPA President & CEO.

For the second year in a row, Henry & Horne, LLP ranked on the Phoenix Business Journal’s Best Corporate Volunteer Programs List.

Travis Beeman, CPA, was promoted to partner within the audit practice at KPMG. Tyler Pennington, CPA, has joined Kotzin Valuation Partners as a valuation analyst in the firm’s Phoenix office.

CBIZ MHM, LLC, was recognized as one of the Best Places to Work by the Phoenix Business Journal.

RSM US LLP (formerly McGladrey LLP) employees completed the Making Strides Against Breast Cancer walk hosted by the American Cancer Society in Phoenix on October 24. The team raised more than $7,500, thanks to the generosity of RSM employees, friends and family members who donated.

Hunter Hagan & Co, Ltd. recently celebrated their 30-year anniversary.

Founders Debra Hunter, CPA, (left) and Darlene Hagan, CPA.

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ASCPA Members Who Serve on AICPA Committees for 2016 Karen Abraham Council - Elected Members Corey Arvizu Practice Monitoring Task Force for Single Audits

Suzanne Heidenreich Peer Review Board Oversight Task Force; Technical Reviewers Advisory Task Force

Gregory Nelson Designated Council Representative for One Year Ryan Patterson Government Performance and Accountability Committee (GPAC)

Anita Baker Technical Standards Subcommittee

William Heimerdinger Health Care Expert Panel; Healthcare Revenue Recognition Task Force

David Baldwin Individual & Self-Employed Tax Technical Resource Panel

Craig Isakson Airline Revenue Recognition Task Force

Nicholas Daddario Hospitality Revenue Recognition Task Force

Mark Landy Technical Standards Subcommittee

Michael Daggett Board of Examiners

Lela Lawless Business Valuations Committee

Jacob Wilkinson Partnership Taxation Technical Resource Panel

Michael Fahlman FLS Damages Task Force; Forensic and Litigation Services Committee

Sharon Lechter Financial Literacy Commission

Chastity Wilson IRS Advocacy & Relations Committee

Randy Fletchall AICPA Foundation Board of Trustees Stephen Harris Technical Standards Subcommittee

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AZ CPA JAN. 2016

Gabrielle Luoma PCPS Executive Committee Raelynn Mackenzie Joint Trial Board

Armando G. Roman Council - Elected Members Alix Smith Benevolent Fund, Inc.

A Dash of SALT

Arizona’s Sometimes Stealth Use Tax Reporting Requirements This month’s state and local tax (SALT) column explains how how and why Arizona taxpayers should comply with their use tax obligations.

Similar to other states with sales and use taxes, Arizona imposes both transaction privilege (sales) tax and use tax, and most Arizona municipalities that impose sales tax also impose use tax. Arizona’s use tax applies to purchases of tangible personal property from retailers and utility businesses if the property is stored, used or consumed in the state.

by James G. Busby, Jr., CPA

Arizona Use Tax Liability Purchasers, rather than vendors, are responsible for payment of Arizona’s use tax — but the tax does not apply to property sold in the state that was subject to Arizona’s sales tax, whether or not the tax was paid. Likewise, purchasers are entitled to an offset against their Arizona use tax liability for excise taxes paid on property that was subjected to tax in another state.

Essentially, Arizona’s use tax is meant to complement its sales tax such that every retail transaction involving tangible personal property that is stored, used, or consumed in Arizona is subject to one of these taxes, unless a deduction or exemption applies.

Common Applications of Arizona’s Use Tax The most common Arizona use tax triggers include: (1) purchases from out-ofstate retailers without nexus in Arizona that cannot be required to collect Arizona taxes, (2) purchases from out-of-state retailers that collect tax for another state at a rate lower than Arizona’s use tax rate, and (3) purchases of items for resale that are pulled out of inventory and stored, used or consumed in Arizona.

Use Tax Reporting and Audits Businesses licensed to collect and remit sales tax are accustomed to paying use tax when they file their monthly, quarterly, or annual sales tax returns. And when the Arizona Department of Revenue (Department) performs sales tax audits on those businesses, it also determines whether they paid use tax on all of their transactions that were subject to use tax.

James G. Busby, Jr., CPA, is a state and local tax attorney at The Cavanagh Law Firm. Busby previously worked in the SALT departments at Arthur Andersen and Deloitte & Touche. Before entering private practice, Busby was in charge of all transaction privilege (sales) tax audits at the Arizona Department of Revenue.

If you have any questions, please contact the author. He can be reached at (602) 322-4146 or JBusby@CavanaghLaw.com.

Arizona’s Stealth Use Tax Reporting Requirement Although most Arizona businesses are not licensed to remit use tax, and even though hardly any Arizona citizens are licensed to remit use tax tax, Arizona use tax applies to every retail transaction involving tangible personal property that is stored, used or consumed in Arizona, unless a deduction or exemption applies.

Similar to what many states have done for years, for tax year 2012 Arizona

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added a line to its individual income tax forms requiring those who stored, used or consumed property in Arizona for a nonbusiness purpose to declare the use tax due, unless sales tax was collected by a registered retailer. But after public and tax return preparer outcry, the state discontinued that requirement after just one year.

Thus, most Arizona businesses and virtually all Arizona citizens who make out-of-state purchases from retailers that do not collect sales tax are subject to Arizona use tax yet lack a convenient way to pay it. Although the Department invites those who make a single purchase subject to use tax to contact them for payment instructions, very few take them up on the invitation.

Beware of Use Tax Liability While every conscientious business owner and citizen should consider

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how they can comply with Arizona’s use tax laws, those who make sizeable purchases of tangible personal property from out-of-state retailers that do not collect sales tax should heed that liability because the Department can assess penalties that quickly add up to at least 25% of the tax, plus interest, when they conduct audits. In fact, the Department’s auditors routinely audit businesses and individuals that purchase automobiles, aircraft and valuables that pass through Customs to determine whether sales or use tax was paid on such items.

The Arizona use tax audit risk for businesses and individuals that do not file sales or use tax returns may be compounded by the lack of a statute of limitations for taxpayers who fail to file returns. Thus, the Department may not be required to limit audits of those businesses and individuals to standard four-year audit periods.

Practice Tip Tax professionals should make sure that their employers and clients are aware of Arizona’s use tax and help them comply with it. Businesses and individuals that are not licensed to collect and remit sales tax in Arizona but regularly incur Arizona use tax liability should register to report use tax by completing sections A, C and F of Arizona’s Joint Tax Application and comparable applications for any non-program cities where they have use tax liability. However, to minimize their exposure to tax, penalties, and interest for past periods, those with significant unsatisfied use tax liabilities may be good candidates for a voluntary disclosure agreement or a managed audit before registering to report use tax. n

Photo by Liz Nielsen

In it for the Outcome – Not the Income!

ASCPA Young Professionals Make a Difference

by Kate Banker, Marissa Graves and James Sean McGettigan For the past few years, the Emerging Leaders Conference has been held to introduce topics relating to leadership, ethics and stewardship of the community, as well as to provide networking and team-building opportunities.

The conference’s format provides attendees numerous opportunities to network, update social media profiles, make new connections, and take away some great ideas and thoughts.

In addition to the annual conference, a demand emerged from our young professionals to not only meet more regularly to network, but also to be of service in the community. The ASCPA listened, surveyed the CPA community and responded by facilitating the inaugural event. Consequently, “In it for the Outcome – not the Income!” came alive. Save the Family Foundation of Arizona, whose mission is to combat multi-generational homelessness, was chosen as the recipient of our first efforts.

The Event On a brisk Saturday morning in early November, while most CPAs were still sleeping away the recent deadlines we all survived, 20 accounting professionals

chose to volunteer together and make a difference.

After a fun and interactive ice breaker, Laura Pahules from Save the Family taught us more about Save the Family and the impact they have on the local community. She then explained what the next few hours would entail.

Our mission sounded simple enough – to clean, sanitize, and paint two twobedroom apartments for families to move into just three days later. So we divided ourselves into two groups of 10 and away we went. Now, one could imagine the tenacity and eagerness a group of stereotypical “type A” accountants cleaning an apartment would be like. But there was no room for perfectionism here – we worked independently to delegate tasks as a team. Cleaning came first, and there was no shortage of surfaces to clean! You name it; we cleaned it: oven, cabinets, windows, ceiling fans, the bathroom (and all that entails), and more. Then came the painting, but don’t forget all of the necessary preparations that go into painting walls. With the fresh paint left to dry over the next day, we packed up all the cleaning materials and passed the final inspection with our Save the Family representative.

After completing the work, we gathered as a group for a quick lunch and

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Photo by Liz Nielsen

some informal networking. Everyone left with a smile and a sense of peace – for it is extraordinarily humbling to realize how much we have to be thankful for that we so frequently can take for granted. We were also invited to tour Save the Family’s headquarters in Mesa, AZ.

How You Can Help

Photo by Liz Nielsen

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AZ CPA JAN. 2016

Walking down the halls of Save the Family, you can see the impact they have on our community. The passion in the employees’ and volunteers’ voices, the dedication of the case workers who care for these families as their own, and the career coaches who do everything in their power to make sure these families succeed. Transitional housing is only a fraction of what they do. Their facility contains supply rooms of clothing, food, cleaning supplies, personal care items and a toy chest to reward the children when they have made an accomplishment.

These all come in through donations received at this facility or their donation center located at 456 N Vineyard in Mesa. The organization also offers life services to its clients to minimize the risk that they end up homeless again.

From career coaching, to budgeting classes, to daycare, to legal services, no stone is left unturned. They don’t forget about the kids either! A van picks them up from school and takes them back to the facility where they offer tutoring, a library, art and pet therapy. Homelessness is often multigenerational. All of these services

help to prevent them from becoming homeless adults and break the cycle.

Now that you know what an amazing organization Save the Family is, let us tell you how you can help! Cash donations benefit the organization the most. These donations also qualify for the Charitable Organization Arizona Tax Credit for charities that provide “assistance to the working poor” ($200 Single & $400 Married Filing Joint.) Secondly, all of the items and services mentioned above are donated. Professional clothing, personal care items, pillows and pullup diapers are the most needed items.

The children and teen centers are also always in need of tutors. Additionally, if you are interested in volunteering your time cleaning and painting apartments, please contact the organization at (480) 898-0228, ext. 201, or volunteer@ nullsavethefamily.org. They also have several annual charity events. The next event is the Hearts of Gold Gala on February 6, 2016 at the Omni Scottsdale Resort & Spa at Montelucia. Visit www. savethefamily.org for more information.

If you missed out on all of the fun, we encourage you to join us for a future volunteer event to show the Arizona communities that CPAs are truly “In it for the Outcome – not the Income!” n Kate Banker, CPA, (Tull, Forsberg & Olson, P.C.), Marissa Graves, CPA, (McDonohue Corp.) and James Sean McGettigan, CPA, (Grant Thornton) are ASCPA members who helped plan this event.

Improving Education Vital to Arizona’s Growing Economy

by Michael Chesin, CPA Cultivating a growing economy is a topic of much discussion in Arizona.

Policy makers and business leaders alike are recognizing the inextricable link between education and the economy. We can no longer underestimate the important role that education plays in developing the human capital that will fuel our state’s economic future. An improved education system will lead to a dramatically different future for Arizona because educational outcomes strongly affect economic growth, job attainment and the distribution of income. A growing economy will also directly affect those of us practicing as professional CPAs — whether we work in corporate accounting or private practice.

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As a gateway to intellectual growth and diverse careers, a postsecondary education including certificates, licenses and college degrees opens the door to opportunities. Individuals who attain a higher level of education tend to have higher incomes, pay more taxes, are less likely to be unemployed, require fewer state supported services, save more for retirement, and, in general, live longer. A postsecondary education also provides the kind of skills and knowledge that are vital to success in Arizona’s growing economy, including the ability to create, innovate and think critically to solve complex challenges.

Critical thinking and problem-solving are key skills for accounting and other business-related professions. Despite the clear benefits of postsecondary education, many full-time Arizona students fail to earn a credential.

In Arizona, only 15 percent of fulltime students earn a two-year degree within three years and less than 60

Five Things Arizona Should Do to Help Develop a Robust Economy • Ensure all students read at grade level by the end of third grade.

• Set high standards and increase rigor in classrooms.

• Create a college-going culture in which all students set a postsecondary degree as their end goal.

• Increase the postsecondary degree completion rate.

• Close the Latino student achievement and degree completion gaps. percent complete a four-year degree in six years. In addition, only 35 percent of Arizona adults have an associate’s degree or higher.

However, the Georgetown University Center for Education and the Workforce estimates that by 2018, 61 percent of Arizona’s jobs will require some form of

Degree Attainment Leads to Higher Earnings

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postsecondary training. Furthermore, by 2020, Arizona is projected to fall short of market demand for degreed professionals by 900,000. There is no question that if not addressed, the gap between the preparation of those looking for jobs and the credentials required for available jobs, will have

a negative effect on our economy.

Arizona must focus efforts on closing this gap and increasing the number of degree holders who are prepared to enter the workforce and contribute to the state’s long-term economic growth and development. This will also help spur on more immediate economic activity which will lead to long-term economic growth in Arizona.

When thinking about increasing the postsecondary degree attainment rate in Arizona, there is significant opportunity within one demographic group in Arizona — the Latino community. Arizona is experiencing a Latino student achievement gap.

Latino students trail their White peers in almost every education assessment category. Only 69 percent of Arizona Latinos graduated from high school on time compared to more than 76 percent of non-Latinos, 65 percent of Latino adults lack post-high school training and only nine percent of Latino adults have

Arizona: The Economic Impact of an Educated Population

College Success Arizona

a bachelor’s degree or higher.

These statistics are even more sobering when you consider that the Latino population is the fastest growing population group in both our state and the nation. Arizona has the fourth largest concentration of Latinos behind New Mexico, California and Texas.

Between 2001 and 2010, Arizona’s Latino population grew by 46 percent while the non-Latino population grew by 17 percent. It is projected that by 2050, Arizona will become a minoritymajority state. At 44 percent, Latinos already make up the largest proportion of the state’s population of children and

Educational Attainment and Public Assistance

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there are more Latino children than White children in the state’s public schools.

The sheer number of Latino students in our state’s K-12 and postsecondary education systems today is a sign of things to come. Latinos will make up the majority of Arizona’s workforce pipeline tomorrow and far into the future. Improving Latino student college success will contribute to Arizona’s ability to expand, attract and retain vital growth industries, such as high tech and medical, and ultimately, transform Arizona from a low-skill, service economy to a highskill, knowledge-based economy. The seismic shift in Arizona’s population requires that we consider how we are preparing students to lead our state successfully into the future.

Progress cannot be made without a willingness for all sectors of our community — business, government, philanthropy, education — to work together to ensure more students have opportunities to complete a postsecondary certificate or degree.

The good news is that there is increased focus on education in our state and there is robust dialogue about how best to change the conversation around education to be focusing on education as an investment and not an expense.

There are specific things we can do, collectively to improve our education system and contribute to building a strong and growing economy. Starting in the earliest years, our state must commit to ensuring that all children enter kindergarten ready to succeed and read at grade level by the end of third grade. Third grade is a pivotal year in which children move from learning to read to reading to learn. There is also a direct correlation between third-grade reading and high school graduation.

Children who are not reading at grade level by third-grade are less likely to be academically successful moving forward. We must also focus on setting high standards for our classrooms and ensuring that a student is exposed to rigorous and challenging academic

The most important thing we can do to improve the future of the Arizona economy is to strengthen our education system.

experiences that will prepare them for success in college and career.

Arizona must prioritize the educational success and degree attainment of our students in order to secure the future economic viability of our state. While there is much conversation about how to improve Arizona’s economy and how to ensure a business-friendly climate, there really is no debating the fact that the most important thing we can do for the future is to strengthen our education system, close the Latino student achievement gap and increase the number of individuals with college degrees. This is the key to breaking the cycle of poverty, ensuring a strong, qualified workforce pipeline and putting Arizona back on the path toward economic prosperity. n Michael Chesin, CPA, is senior vice president and chief financial officer of the Helios Education Foundation. Helios Education Foundation is focused on creating opportunities for individuals in Arizona and Florida to succeed in postsecondary education by advancing the academic preparedness of all students and fostering a high-expectation, college-going culture. As an engaged foundation, embedded in communities across both states, the Foundation is contributing its expertise and financial resources to better prepare students for college and career and to compete successfully in a globally-competitive economy.

Since 2006, Helios has invested over $155 million in education-related programs and initiatives in Arizona and Florida. For more information about the Foundation, visit www.helios.org.

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a multifaceted way of looking at the world, an ability to reflect on and learn from each experience, and the humility to enquire rather than advocate and engage instead of command. Strategists can articulate a vision for the future of an organization while also ensuring it runs effectively in the present. They also create opportunities for others to thrive.

The Six Capabilities According to researchers, the six capabilities that strategists possess are:

A Fresh Perspective Being able to see a situation from a number of perspectives can generate new approaches and therefore promote innovation and problem-solving.

Six Capabilities of Transformational Leaders

by Samantha White Increasingly complex demands are being placed on leaders as social change, shifts in the global economy, resource scarcity, and technological advances disrupt long-standing business models. Leaders are being called upon to create new ways of working to meet these challenges and to drive cost reduction without destroying value. Yet less than 10 percent of senior management have the capabilities and experience required to bring about this type of transformational change, according to a study of 6,000 leaders conducted

by Harthill Consulting in collaboration with PwC. It’s not just tenure that counts, and the skillset needed for successful transformation is different from that needed to excel in the day-to-day running of a company or to thrive in a crisis. The research describes 52 percent of current senior management as “achievers.” This type of leader is action- and goal-oriented and well-suited to managerial roles. He or she is able to juggle managerial duties and market demands, as well as achieve strategic goals efficiently, through his or her team.

However, solving direct challenges to business-as-usual calls for a different type of leader with different attributes. The “strategists” who are capable of leading successful transformation in a complex business environment possess

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The Ability to Act on the Big and Small Picture Leaders must be able to provide vision and direction, as well as get involved in detailed action where necessary.

Passionate Detachment Leaders must balance passion for their mission and objectives with the detachment to weigh situations objectively and change course when required.

Creative Use of Power Whether it is formal, informal, institutional, or personal power, using it wisely builds long-term commitment and trust amongst peers, employees and other stakeholders.

Positive Use of Language Strategist leaders use language with skill and awareness to inspire and influence, with the clear goal of creating positive outcomes.

Leading With Vulnerability and Courage Effective leaders have the courage to make tough and potentially unpopular decisions. Meanwhile, vulnerability, a characteristic less common amongst leaders, is crucial to enabling others to

both take responsibility and give frank, honest feedback. Such leaders are in short supply, and few have emerged over the past decade. Research conducted in 2005 classified seven percent of all senior managers as strategists, and the figure for the 2015 survey was only eight percent.

The research also indicates that strategists are often to be found working in consultancy or advisory roles, and may be reluctant to work directly for an organization, particularly if it relies on hierarchical management structures. In this context, organizations need to do more to attract, retain and develop the type of individuals capable of taking their business forward.

1. Distribute Responsibility.

How to Develop and Retain Transformational Leaders

To develop transformative leaders, life coaching, action learning, and reflective thinking should be prioritized.

Drawing on best practices observed in the study, researchers suggest organizations take the following steps to develop transformational capabilities:

The first step to developing this type of capability is distributing responsibility downwards and outwards, enhancing the organization’s adaptability, resilience, and intelligence as a whole.

transformative leaders right from the recruitment and on-boarding processes helps create the conditions they need to thrive and ensures cultural fit.

6. Address Conflict and Failure Openly.

In successful transformations, there is 2. Be Realistic About the Quality of a culture of experimentation in which Information.

Be aware of and acknowledge the limitations of available data.

3. Build An Empowering Collective Culture.

Turn shared aims into behavioral norms across the organization.

4. Invest in Professional Development Opportunities.

5. Recruit for Transformation.

Prioritizing the attributes of

failure is seen as a necessary part of the development process. Some companies in the study discuss unsuccessful projects, identifying what went wrong and what lessons can be learned.

Other organizations in the study have developed forums in which colleagues can discuss the personal aspects of any conflicts that arise.

Take a Holistic View of Employees Those organizations defined by researchers as strategists demonstrate their concern for their employees’ overall well being with policies such as life

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JAN. 2016 AZ CPA

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Upcoming ASCPA Conferences

Accounting & Reporting Standards Conference

Jan. 13

Black Canyon Conference Center Get updates and guidance on accounting and reporting standards with the following topics: • Everything You Did and Didn’t Want to Know About This Year’s Accounting Changes • Importance of Audit Quality • Arizona State Board of Accountancy Update • Revenue Recognition • Internal Security IT: 10 Things You Need to Do Before Moving an Application (or Your Entire Business) into the Cloud • Using Data Mining to Detect Fraud and Misuse of Public Monies

Governmental Accounting Conference Feb. 12

Arizona Biltmore Resort Barry Melancon, President & CEO of the AICPA, will open up the conference with an update on the profession.

General Sessions Include: • Changing Economics for Arizona Universities – Eileen Klein, President of the Arizona Board of Regents • GASB Update – David Bean, GASB • Latest on Fraud – David Cotton, Cotton & Company, LLP First Concurrent Sessions: • Economic Outlook • Nuts and Bolts of GASB • IT Risks & Best Practices Second Concurrent Sessions: • Horizons 2025 Panel – Future for CPAs • Fraud is Still Fraud • New Pension Standards

Special Thanks to Platinum Sponsor: Henry & Horne, LLP

coaching or on-site child care. Other approaches include:

Build Strategy Collectively Many strategist organizations have defined methods of working collectively on business strategy. The theory is that anyone who shares responsibility for execution of the strategy should get a say in its formulation.

Prioritize Reflection All staff should set time aside for unstructured reflection on a regular basis.

Tone from the Top For strategists to grow and develop at all levels of the organization, senior leaders must also embody these values and lead their team. n Samantha White is a senior editor at CGMA Magazine. She can be reached at swhite@aicpa.org. (Copyright © 2011-2015 American Institute of CPAs. Copyright © 2011-2015 Chartered Institute of Management Accountants. All rights reserved. This article first appeared in CGMA Magazine is reprinted with permission.

Who Doesn’t Love Movies and Popcorn?

Refer a member by the end of January and we’ll send you a couple of movie tickets and a popcorn voucher as a thank you! You know the value of the ASCPA—help us spread the word!

To register, go to www.ascpa.com and click on conferences.

Email membership@ascpa.com

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AZ CPA JAN. 2016

AZ CPA Quick Quiz You’ve Read It, Now Get Credit Take this quiz online or submit this hard copy on AZ CPA content.

Receive a score of 70% or more and earn one hour of CPE credit in specialized knowledge. It’s that easy!

Fees: Members $25 Non-members $40 Online Access Login to www.ascpa.com and go to CPE/OnDemand CPE Quick Quiz to access links to all active quizzes. Purchase quiz and the quiz link and password will be emailed to you. Your results will be sent immediately after completing, and certificates are emailed within two business days.

Hard Copy Please select one answer for each question. Fill out registration/payment information below and mail or fax to the Society office. Quiz results and certificates will be emailed to the address provided on the registration form. *This quiz will be available until January, 2017. Please note that users have three attempts to pass the quiz with at least a 70% score.

January Issue of AZ CPA* 1. What types of purchases impose the Use Tax? m All Arizona retail purchases

being stored, used or consumed in Arizona m Only retail including personal property stored, used or consumed in Arizona from outof-state m All out-of-state purchases being stored, used or consumed in Arizona 2. What businesses are routinely audited for their Use Tax? m Clothing Retailers m Pawn shops and supermarkets m Car dealerships and aircraft

dealers 3. What organization did the Young Professionals group volunteer with in November?

m Homeward Bound m Save the Family m St. Mary’s Food Bank 4. This organization also offers career coaching and daycare? m True m False

5. One thousand new college graduates generate how much additional annual state tax revenue? m $ 1 million m $ 2,244,448 m $ 1,222,000 6. Currently, there are more Latino children than White children in the state’s public schools. m True m False

7. By 2020, Arizona is projected to fall short of market demand for degreed professionals by: m 100,000 m 600,000 m 900,000 8. What percent of senior managers have what it takes to be transformational leaders: m Less than 10 percent m 20 percent m 35 percent 9. According to 2005 research, what percent of senior managers were classified as strategists? m 52 percent

m 10 percent m Seven percent 10. What two things are common in strategist organizations? m Life coaching and childcare m Unstructured reflection and Hierarchical structure m Creative use of power and focusing only on the big picture.

Registration Name: ____________________________________________________ Email:_____________________________________________________ Telephone: _________________________________________________

Payment

m Member: $25 m Non-member $40 Checks: Please make payable to: The Arizona Society of CPAs Credit Card:

m Visa

m MasterCard m American Express

Credit card #: _______________________________________________ Expiration Date: _____________________________________________ Name on Card: _____________________________________________ Mail to: ASCPA, 4801 E. Washington St. Suite 225-B, Phoenix, AZ 85034-2021; fax to (602) 324-6043; scan and send to ASCPACPE@ascpa.com.

JAN. 2016 AZ CPA

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Classifieds Business Opportunities/ Practices for Sale NORTH SCOTTSDALE CPA FIRM SEEKING TO BUY CLIENTS — Established over 30 years, we are experienced in smooth transitions and maintaining high client retention.

We specialize in servicing small to medium businesses. If you are planning on retiring, we can customize a transition for you. We service the entire metropolitan Phoenix area and offer complete accounting and tax services. Call Joy today at (480) 9902727 or email joy@partridgecpas.com.

TUCSON CPA TAX PRACTICE AVA I L A B L E F O R M E R G E R / BUYOUT OR NEW PARTNER — Two retirement minded partners of a $1 million, primarily tax practice in Tucson seek a firm that wants to merge or buyout the partners over an agreed upon time frame. The practice is well established over the last 30 years and highly profitable with a strong concentration in business and individual tax preparation and consulting. Firm would also consider a strong candidate to buy into the practice. Firm has a no cost 90-day notice to landlord, if firm merges and cancels lease. Please send inquiries and desired goals to yazzr33@gmail.com or CPA, 6590 North Regal Manor, Tucson, Az 85750.

TWO PARTNER CPA FIRM SEEKS SUCCESSION PLAN — Located in north central Phoenix the firm serves a wide variety of clients with writeup, compilation, review, audit and consulting in addition to trust, estate, corporate, partnership, fiduciary and individual income tax services. The firm has a 25+ year history with annual revenues of $450K+. The partners wish to explore merger/buyout possibilities.

Principals only, please respond to: cpa85020@gmail.com.

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AZ CPA JAN. 2016

Employment Accountant — Well established Chandler company that provides business products and services is seeking an Accountant with 3-5 years of solid accounting experience. Successful candidate will have a wide range of key accounting responsibilities and will work directly with the chief financial officer. B/S in Accounting or related field of study is preferred, but other experience/education will be considered. Working knowledge of GAAP is required. This is a fulltime position with excellent benefits.

Qualified candidates please send resume to hr@dns-ans.com.

Accountant II — Maricopa Community Colleges District — Position#15789. FT salary $46,110 $54,755. Provides analytic support to the District, including fiscal oversight, reporting, and compliance reviews of transactions in the general, auxiliary, grant, and/or capital funds. Responsible for the proper treatment of transactions in any of the following functional areas: Capital Assets Accounting, F i n a n c i a l R e p o r t i n g , Tre a s u r y / Investments, General Accounting, Grants Accounting. There are five positions to be filled in the following areas: Capital Assets Accounting, F i n a n c i a l R e p o r t i n g , Tre a s u r y / Investments, General Accounting, Grants Accounting. A completed online application at the company website is required. Position(s) will stay open until filled. Applications will be reviewed bi-weekly. MCCCD is an AA/EEO Institution.www.maricopa.edu/jobs.

LOOKING FOR A WORLD CLASS PART TIME TAX PREPARER —Solex Accounting, PLLC - I am looking for a long-term fit with a special person who can complement my skills and abilities.

Together we’ll generate amazing results.

There are promotion opportunities available for the right person. This position offers part-time, flexible hours and is perfect for a professional returning to the workforce who would love to be

home when school lets out. The position is part-time but can lead to full time for the right candidate. Five plus years of QuickBooks and individual, partnership, and corporate tax return experience. http://www.SolexAccounting.com.

Part Time Staff CPA — Harvey E. Amwake, PLLC — Established sole practitioner near 7th Street and Bethany Home seeks CPA for part time position.

35 hours per week tax season, 10-20 hours per week until October 15th.

Position could lead to full time or ownership in the future. Ideal candidate will have 5+ years experience including QB clean up, some research, individual and small business tax returns. QB and Lacerte experience a plus. We provide exceptional client service and are looking for the right person to enhance our team. Hourly rate open, hours flexible, casual work environment. E mail resume to Harvey@amwakecpa. com.

Sr Tax Accountant/Supervisor-N Scottsdale — North Scottsdale CPA firm seeking individual with 3-5 years recent business and personal tax preparation. Supervisory/ management and Lacerte experience a plus. High proficiency with QuickBooks a must. We offer a comfortable work environment with growth opportunities.

Benefits and Salary DOE.Send resumes to joy@partridgecpas.com.

Tax Manager —Tafoya Barrett and Associates PC — Here is your opportunity to live and work in the beautiful mountain community of Durango Colorado, with all the outdoor activities you could want while working in a professionally challenging environment.

We are a growing CPA firm specializing in income tax and financial planning services for high net worth individuals/ businesses. We are currently looking for a CPA with 2-10 years of advanced tax experience and some management experience. The potential for future ownership exists for the right candidate.

Send resume to Tafoya Barrett and Associates PC, Attn: Cindy Morin, 150

E 9th Street, Suite 300, Durango, CO 81301 or CMorin@TafoyaBarrett.com.

Tax Preparer — Lisa M. Wheeler CPA LLC — Tax preparer needed for individual tax returns for up to 40 hours per week for February through April. Office located in Paradise Valley.

Please email your resume to miriam@ lmwheelercpa.com or call (602) 9536996 for more information.

Miscellaneous BUSINESS PROPERTY TAXES TOO HIGH? — I’ve been successfully appealing property tax assessments for over 15 years, both real estate and personal (business) property on a contingent fee basis. The annual business property reports are also filed for a flat fee. Reasonable rates. Arizona CPA. Visit my pages on LinkedIn, Facebook and Twitter. Call John at ASMR Consulting LLC, (480) 204-1289.

For information about classifieds, go to www.ascpa.com and go to marketplace.

New Online Tax Courses Join experienced tax professionals Don Cochran, JD, CPA, Mark Patrick, CPA ,and Ed Zollars, CPA, for a four CPE credit, virtual conference dealing with tax matters of importance for the upcoming tax season. This course will be presented as a roundtable discussion of the issues for each topic, giving insights into what has taken place recently in these areas and discussing what you need to know to get through the upcoming 2016 tax season.

2016 Practitioners Online Tax Forum Jan 23 8 a.m. - Noon Jan 27 2 - 6 p.m.

Feb 6 7 - 11 a.m.

Register online at www. ascpa.com

Conversations with the Kachina I would like some more clients for this upcoming tax season, but I don’t have any money in my marketing budget.

As a member of the ASCPA, you can join the ASCPA referral service for free.

We market this service to the public, so they can search for you on our website.

Go to www.ascpa.com, click on My ASCPA, then Join CPA Referral.

JAN. 2016 AZ CPA

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Arizona Society of CPAs 4801 E. Washington St., Suite 225-B Phoenix, AZ 85034-2021

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Committed to a

STRONG AND HEALTHY ARIZONA

132583-15

For more than 75 years, we have been helping take care of Arizonans.

We focus on the health of our members and the well-being of the communities in which they live. That’s why we’re proud to support Arizona Society of CPAs and the work they do to foster a strong and thriving business climate now and far into the future.

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AZ CPA JAN. 2016