AZ CPA May 2019

AZ CPA May 2019

What Arizona CPAs Need to Know About the

New LLC Act Meet the New ASCPA Board of Directors Finding a Good Manager The Arizona Society of Certified Public Accountants y www.ascpa.com

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

Cindie Hubiak Patricia Gannon Heidi Frei

Board of Directors Chair Jared Van Arsdale Chair-Elect Ginny DeSanto Secretary/Treasurer Tom Duensing Directors

Rachael Bertrandt

Keith Cowan

Kelly Damron

Paul Evans

Ross Grainger

Tim Hansen

Jessica Iennarella

Andrea Levy

Anthony Lorenzo

Vanessa Makridis

Karen McCloskey

Sami Raynes-Houseknecht

Immediate Past Chair Mike Allen AICPA Council Members Rob Dubberly

Greg Nelson Chapter Presidents Southern Chapter Cathy Kinzer Northern Chapter James Shankland Southwest Chapter Helen Greenwell North-Central Chapter Gidget Schutte AZ CPA is published by the Arizona Society

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AZ CPA MAY 2019

of Certified Public Accountants (ASCPA) to provide information, news and trends to the accounting profession. It is distributed 10 times a year as a regular service to ASCPA members. 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.

Arizona Society of CPAs 4801 E. Washington St., Suite 180 Phoenix, AZ 85034-2040 Telephone (602) 252-4144 AZ Toll-Free (888) 237-0700 www.ascpa.com

Volume 35 Number 4

AZ CPA

May 2019

Features

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Katharine Drake to Receive ASCPA 2019 Excellence in Teaching Award Katharine Drake, Ph.D. will be honored at the ASCPA Annual Meeting on May 8.

by Patty Gannon

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What Arizona CPAs Need to Know About the New LLC Act Understanding the major points of the 2018 law governing LLCs can be a valuable asset for CPAs.

by J. Phillip Glasscock, Esq.

Columns & Departments

Chair’s Message by Jared Van Arsdale, CPA

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Member News

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2019-20 ASCPA Board of Directors

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

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Quick Quiz

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Classifieds 22

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Strategies for Finding a Good Manager to Work For

Job satisfaction depends largely on the quality of your manager, so doing homework on potential supervisors is vital.

by Hannah Pitstick

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Arizona Society of Certified Public Accountants 4801 E. Washington St., Suite 180 Phoenix, Arizona 85034-2040 www.ascpa.com

ASCPA Membership Opportunities The ASCPA is here to serve you and be your professional home for every stage of your career.

MAY 2019 AZ CPA

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ASCPA Chair’s Message

Operation Conformity Those who know me well know that I am an avid reader and follower of state and federal politics. I once heard politics explained as the legislative attempt to resolve uncertainty. We could all agree that some days are better than others. As a CPA, the development and planning around uncertainty are what we do best. We tend to be naturally drawn to stability and surety.

So, when it comes to the topic of income tax conformity, it elicits an almost involuntarily response that “it will pass like it does every year.”

by Jared Van Arsdale, CPA As CPAs, we play an important role as a resource, providing guidance and counsel to our elected officials, the clients we serve, our employers and the public as a whole.

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AZ CPA MAY 2019

This past January, I had the privilege of speaking with the Arizona House Democratic Caucus at the beginning of the legislative session. We were there to advocate for the conformity of Arizona’s income tax laws to the Internal Revenue Code in a year of significant federal tax reform.

Following the 2018 elections, there were a number of new faces and names at the state Legislature. Therefore, it was a safe assumption that these civil servants were not going to be experts on Arizona’s income tax laws quite yet. In fact, they were sworn in the day before our scheduled meeting and we congratulated them with a presentation on a complex income tax issue right away. I find it important to set the scene slightly as it is certainly a misunderstanding that our legislators can be experts, ready to make informed decisions on all the issues affecting our state. They come from vastly different backgrounds, varying skill sets and complemented with their own unique personalities, and we understand that there is a steep learning curve in any new position. The most effective means of communication is to offer ourselves as resources and educators.

With this goal in mind, and with an audience of approximately 15 mostly new House representatives and their staff present, the Society’s lobbyist and I communicated the need for conformity, the necessity for stability in our voluntary tax system and importance of simplicity in the state income tax laws.

We answered as many questions as we could, and as we left the capitol, the Society’s lobbyists were already melding their thoughts while strategizing what next steps would become Operation Conformity, Day One (see the ASCPA Connect site for details).

As CPAs, we play an important role as a resource, providing guidance and counsel to our elected officials, the clients we serve, our employers and the public as a whole. With your membership support of the Society, its Tax Legislative Review Committee and its leadership, we seek to reinforce these roles throughout the legislative session. Therefore, your support of the ASCPA Political Action Committee (PAC) is encouraged.

Your advocacy team at the ASCPA is committed to representing our members and the entire CPA profession. Through the Society, members can share their knowledge and experience to help minimize uncertainty, helping us better serve our clients and our organizations. As I find myself routinely hip deep in the weeds of state politics, I encourage all of us to remain engaged and informed as the landscape is ever changing.n

Member News Christine M. Murthy, CPA, joined Flowers Rieger & Associates, PLLC as a senior tax accountant.

Wallace Plese + Dreher (WP+D) promoted Christopher T. Coots, CPA, PFS™, J.D. to partner effective January 1, 2019.

Kristine Newman was promoted to senior vice president, finance with McCarthy Holdings.

Mark David Feldman, CPA, CEO of MRA Associates, was honored by the Phoenix Business Journal as a Most Admired Leader.

Thanks to ASCPA board member Alan Gold, who recently spoke to high school students at BASIS Chandler about careers for CPAs.

Hansen

Drake

Davenport

2019 Annual Meeting & Awards Luncheon—May 8 Join us for the 2019 Annual Meeting & Awards Luncheon on May 8 at the Arizona Biltmore Resort from 11:30 a.m. to 1:30 p.m. Eric Hansen, chair of the AICPA and the COO of BKD, will be our keynote speaker. We will honor Debra Davenport, former Arizona Auditor General, with ASCPA Life Membership and recognize Katharine Drake, our Excellence in Teaching Award recipient.

Tables of 10 are available for purchase with two options, the regular table option for $750, and our premium table sponsorships for $1,000. This sponsorship level includes a $250 donation to the Arizona CPA scholarship fund. Purchase your table by emailing Gretchen Pacheco at gpacheco@ascpa.com or calling (602) 324-4745.

Thank you to sponsors: CPACharge, Enterprise Bank & Trust, Paychex, Robert Half and Sacks Tierney P.A. Attorneys

www.ascpa.com/annual2019 MAY 2019 AZ CPA

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2019-20 ASCPA Board of Directors Executive Committee Members

Jared Van Arsdale ASCPA Chair Ullmann & Company, P.C.

Ginny DeSanto Chair-Elect VP & CFO, ASU Enterprise Partners

Mike Allen Immediate Past Chair Principal, REDW LLC

Rachael Bertrandt Director 2018-2020 VP & Controller, Insight Enterprises

Keith Cowan Director 2019-2021 Chief Financial Officer Food for the Hungry

Kelly Damron Director 2019-2021 Assistant Professor of Accounting Grand Canyon University

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AZ CPA MAY 2019

Tom Duensing Secretary/Treasurer Deputy Internal Services Director, City of Tempe

Paul Evans Director 2018-2020 Vice President IMH

Ross Grainger Director 2019-2021 Senior Director of Finance WebPT

Tim Hansen Director 2018-2020 Partner Nordstrom & Associates

Jessica Iennarella Director 2019-2021 Supervisor HSNO

Andrea Levy Director 2019-2021 Chief Financial Officer Southwest Autism Research and Resource Center

Anthony Lorenzo Director 2019-2021 Managing Member Lorenzo, PLC

Vanessa Makridis Director 2018-2020 Equity Methods

AICPA Council Members 2018-2021

Rob Dubberly Audit Partner KPMG LLP Karen McCloskey Director 2018-2020 Partner BeachFleischman PC

Sami Raynes-Houseknecht Director 2018-2020 Walker & Armstrong, LLP

Greg Nelson Principal Nelson Consulting PLC

MAY 2019 AZ CPA

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Katharine Drake, Ph.D., to Receive ASCPA 2019 Excellence in Teaching Award

Free Webinar for ASCPA members

R & D Tax Credits: Recognizing the Value Across Many Industries June 13 — Noon to 1 p.m.

The R&D tax credit is a game-changing federal and Arizona tax credit that drives cash flow for businesses of every size and scope. Recent legislation changes have broadened the innovation tax credit’s reach and impact for startup companies as well as for business owners locked in an alternative minimum tax. Join Acena Consulting for this exciting and informative session about how companies across a multitude of industries can leverage the power of the R&D tax credit to increase profitability and overall business value.

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AZ CPA MAY 2019

Katharine Drake, Ph.D., a professor at the University of Arizona, will be honored with the 2019 Excellence in Teaching Award at the ASCPA Annual Meeting on May 8.

“I am honored to be chosen for the award,” says Drake. “I am especially grateful to the late Dan Dhaliwal, our former department chair, who gave me the opportunity to work at the University of Arizona with great colleagues and students. I received my Ph.D. later in life than most other professors, and thus, I consider myself very fortunate to have had the best of both worlds; I had a wonderful career as a practicing CPA and now have the opportunity to teach the next generation of accountants. I love the look on my students’ faces when they complete their first tax return — it’s priceless!”

“In my 32 years of being at the University of Arizona, I would rate Katharine as one of the very best assistant professors I have seen,” says Jeffrey Schatzberg, director of the School of Accountancy. “She is a legitimate ‘triple threat’; she is an excellent researcher, a superb teacher, and fantastic colleague and service representative. She has unlimited passion in all three of these areas.”

Join us as we honor Drake on May 8 at the Arizona Biltmore. Register at www. ascpa.com/annual2019.

A Dash of SALT

Arizona Transaction Privilege Tax Ruling In this month’s state and local tax (SALT) column, Busby summarizes a recent transaction privilege (sales) tax ruling in which the Arizona Department of Revenue (ADOR) agreed to abate penalties assessed because property management companies failed to timely report or pay sales taxes for rental properties they manage.

On April 15, 2019, the ADOR’s Interim Director Carlton Woodruff, issued the first sales tax ruling bearing his name — Arizona Transaction Privilege Tax Ruling TPR 19-1.

Background and The ADOR’s Investigation Beginning in January of 2018, property management companies were supposed to begin utilizing an electronic system the ADOR developed to report and remit sales taxes due for the owners of rental properties they manage. The system requires management companies to file consolidated electronic returns that identify the locations of each owner’s rental properties as well as the gross income and deductions for each property.

Many property management companies did not timely report and remit the sales taxes due for the properties they manage using the ADOR’s electronic system.

Accordingly, the ADOR assessed many property owners with penalties and interest for failure to timely report and remit sales taxes.

Because the problem was so widespread, and because the ADOR received so many complaints about its new electronic filing system and the penalties and interest it assessed, the ADOR initiated an investigation to examine the underlying causes for the problems property managers experienced and whether there was reasonable cause to abate the penalties.

by James G. Busby, Jr., CPA

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.

The ADOR’s Findings On March 1, 2019, the ADOR hosted an open forum to determine the extent of and reasons for the concerns with its new electronic filing system for property management companies. During the forum, the ADOR learned that, despite “extensive efforts made by taxpayers and property managers to transition to the Department’s electronic filing process ... many were unable to successfully submit returns and payments on behalf of property owners by the statutory deadline.”

At the forum, the ADOR also learned more about the technical difficulties property managers experienced with the ADOR’s new electronic system that resulted in their “failure or inability to timely file or pay applicable taxes and renewal fees,” including complications involved with the process of “merging preexisting city licensing information with new Department licensing information,” which resulted in some payments being misapplied.

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The ADOR’s Ruling

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After the forum, and upon consultation with city officials, the ADOR determined that the complications property management companies experienced with its electronic filing system constituted reasonable cause for their failure to timely file and/or pay applicable taxes. Accordingly, in TPR 19-1, the Department announced that it is planning to issue a notice with additional information for property managers affected by this ruling “to facilitate the application for abatement of penalties assessed.” n

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Behind the Scenes at the Arizona Ballet Sept. 18 11:30 a.m. – 1:30 p.m.

Meeting dates and times The following Saturday meetings are held at the ASCPA offices in Phoenix from 9 a.m. to noon. A full breakfast is included with each meeting. You may also participate by webcast from your home or office.

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Nov. 16, 2019

June 22, 2019

Jan. 18, 2020

Sept. 21, 2019

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April 25, 2020

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AZ CPA MAY 2019

Join your fellow CPAs as we go Behind the Scenes at the Arizona Ballet! Take a look behind the curtain at the ballet and hear an interesting presentation from a few members of their team, including the Executive Director Samantha Turner. We will have an opportunity to peek in on a rehearsal as we tour their facility. This is an exciting and rare opportunity to visit and learn more about the inner workings of the Arizona Ballet. Lunch will be provided.

www.ascpa.com/ballet

What Arizona CPAs Need to Know About the

New LLC Act

by J. Phillip Glasscock, Esq. Understanding the major points of the 2018 law governing Arizona LLCs can be a valuable asset for CPAs in advising their clients … and in ensuring that their own entity is in compliance.

The new Arizona Limited Liability Company Act (ALLCA), which was enacted in 2018, imposes a number of important – and possibly detrimental – default provisions that, by the time the new law is in full effect, calls for a thorough review and possible revision of virtually all Arizona LLCs. ALLCA has two effective dates: • September 1, 2019, for all LLCs formed on or after that date, whether through traditional formation or by conversion from another entity or domestication in Arizona of a foreign LLC; and • September 1, 2020, for all other LLCs, including those formed under the previous law.

LLCs formed under previous law can choose to be subject to the new act before the 2020 deadline by stating their intent to do so in their operating agreement.

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Intended Effect and Possible Issues The intent behind ALLCA is to “fill in the blanks” and provide more detail than the previous law in governing LLCs that (a) do not have operating agreements or (b) have operating agreements that fail to address the default provisions of the new law.

As innocent as that may sound, ALLCA poses potentially serious repercussions, and LLC managers and members need to understand how the new law might affect their entity. This is important whether the LLC has a written operating agreement, no operating agreement, or some kind of verbal understanding. Specifically, the Act states that an operating agreement may either be in writing or verbal, which could lead to disagreements and unintended consequences. As such, a consultation with your business attorney regarding the creation of a new operating agreement or a review and updating of your existing agreement would be prudent.

Basic Formation Requirements ALLCA retains some of the previous law’s basic provisions regarding LLC formation, including the requirement to file Articles of Organization.The articles must state whether the LLC is member managed or manager managed. They must also name the managers and certain members. Though this is a longstanding requirement, we still see articles without any designated members whose filers are either not familiar with the requirements or failed to check the appropriate boxes on the Arizona Corporation Commission’s online forms.

Does a manager-managed LLC without any named members mean that the LLC was not properly formed and expose its owners to unlimited personal liability? It is easy to see how serious consequences can result to those owners who make mistakes when forming their LLCs or improperly updating their articles to change members or managers.

Required Provisions The new act mandates several provisions that cannot be changed, even if the LLC has a written operating agreement

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opting out of coverage under the new act or has provisions contradicting the new act.

One of the most important mandates prevents the elimination of the duties of good faith and fair dealing. Another prevents the elimination of adverse consequences for willful or intentional malfeasance. The new act also prevents the LLC from unreasonably restricting members’ rights to LLC information.

Key Default Provisions New Fiduciary Duties and Modification. Under the “old” LLC act, members did not automatically have fiduciary duties to other members. For better or worse, the new act specifies that managers (or members in member-managed LLCs) owe certain fiduciary duties to the LLC and its members. Those duties include the duties of loyalty and due care – duties which, along with the duty of good faith and fair dealing, are commonly cited in business litigation.

For example, the fiduciary duties prevent self-dealing, benefiting third parties with interests adverse to the LLC, and competing with the LLC. They also require accountability for illgotten benefits and require disclosure of conflicts of interest.

However, the duties may be modified in certain respects. For example, an action that might otherwise violate the duty of loyalty may be approved, provided that such approval is by all the members after each of them has been apprised of all material facts related to the action ratified. This is key for LLCs where a manager may be expected to act for multiple LLCs or engage in self-dealing, such as a real estate syndicator managing multiple real estate investment LLCs. It might also apply in professional service LLCs where management committee members set their own compensation, normally without the approval of other members.

Changes in Voting Rights. The Act changes the old “one member, one vote” default to voting according to owner-

ship percentages. Unless the members intend to have equal ownership, the operating agreement should specify the ownership interests. However, the members should also know that the ownership percentages are not necessarily the same as the profit/loss splits or capital accounts.

Changes in Information Rights. The Act contains some subtle changes regarding the kind of information available to members and managers.

Both the previous law and the new one contain lists of information available to all members – i.e., members names and addresses, articles of organization, operating agreements, capital contribution and subscription agreements, tax returns and financial statements.

The new law adds the requirement to share documents related to member and manager votes. Also, it allows “just and reasonable” inspection of documents for any purpose pertaining to a member or manager’s rights. This differs slightly from the old law, which allows inspection of other documents, with the only requirement being that the documents be “reasonably related” to the member’s interests. The new law also has information provisions pertaining to dissociated members, legal representatives, and assignees. Time will tell how the new information inspection rights will affect practitioners, especially those who take on the responsibility to distribute tax,

financial and other information to LLC members.

Changes in Distribution Rights. Under the old law, unless the operating agreement specifies otherwise, interim distributions first are applied to the members until their capital contributions are fully paid and then go to the members equally (i.e., per capita).

The new law’s distribution provision requires only that interim distributions be allocated equally among the members. Practitioners should discuss with the members their intentions regarding distributions. Also, for practitioners helping clients with subchapter S elections for LLCs with more than one owner, it is critical that the operating agreement be written to comply with the subchapter S rule that requires distributions to be in accordance with ownership interests.

The CPA’s Important Role With respect to their clients’ LLCs, Arizona CPAs should recognize that

complying with ALLCA, which is a complete replacement of its predecessor, can be a complex process.

While ALLCA’s important legal, operational and governance issues require the involvement of the LLC’s business attorney, complying with the new law also triggers significant financial and tax considerations that require the involvement of the entity’s financial professionals.

Protecting the LLC’s managers and members from the consequences of a non-compliant operating agreement may require effective coordination and shared leadership on the part of the entity’s attorney and accountant, and your familiarity with the fine point of the new law may prove to be invaluable in protecting your clients’ interests. n J. Phillip Glasscock, Esq. is a senior partner at Smith Saks Kuzmich PLC. He is an ASCPA member and can be reached at: jpg@sskattorneys.com.

Endnotes The adjectives “previous” and “old” are used in this article to refer to the law that the 2018 ALLCA replaces. While “old,” the pre-2018 LLC law remains in effect for most existing Arizona LLCs and will continue to govern them until the 2018 ALLCA goes into full effect on September 1, 2020.

1. A.R.S. § 29-3102(17).

2. A.R.S. § 29-632; A.R.S. 29-3201(A).

3. A.R.S. § 29-3201(B)(4).

4. A.R.S. § 29-3201(B)(4).

5. A.R.S. § 29-3105(C)(5).

6. A.R.S. § 29-3105(C)(6).

7. A.R.S. § 29-3105(C)(7).

8. TM2008 Investments, Inc. v. Procon Capital Corp., 234 Ariz. 421, 424-25 P.3d 704 (Ct. App. 2014).

9. A.R.S. § 29-3409(A).

10. A.R.S. § 29-2105(D)(1).

11. A.R.S. § 29-3407(B)(3).

12. A.R.S. § 29-3410.

13. A.R.S. § 29-3410(D).

14. A.R.S. § 29-3410(B).

15. A.R.S. § 29-607(B)(2).

16. A.R.S. § 29-3410(F); A.R.S. § 293410(I).

17. A.R.S. § 29-703(B)(1).

18. A.R.S § 29-3404(A).

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MAY 2019 AZ CPA

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Here are a few traits to look for and tips on how to spot them when trying to determine if someone will be a good manager to work for:

Forms Genuine Relationships With Employees

Strategies for Finding a Good Manager to Work For Job satisfaction depends largely on the quality of your manager, so doing homework on potential supervisors is vital.

by Hannah Pitstick When looking for a new job or transfer, employees have several variables to consider, including salary, promotion potential and job responsibilities.

But if they hope to thrive in a new workplace, they should make sure the job comes with a good manager.

Research has backed up the claim that people leave managers, not companies, including a 2015 Gallup study of 7,272 U.S. adults that found 50 percent of employees left their job “to get away from their manager to improve their overall life at some point in their career.”

Significant research has been conducted to get to the bottom of what makes a good manager, but the traits of a good manager are not so different from those of an empathetic person.

“The qualities employees are looking for in a manager are the same anyone would be looking for in a good human being,” said Bernard Marr, an author and consultant based in England. “People want fairness, respect and recognition; they want someone who listens and is a good and consistent communicator; someone who supports, sets a clear vision and expectations, challenges and inspires people and creates a no-blame culture.”

Because management is such a crucial variable in job satisfaction, it is wise to research and vet the managers at companies you’re hoping to work for, just as they vet their prospective employees. It may take a few phone calls and some internet sleuthing to find the right sources, but a little due diligence on your part can boost your chances of career fulfilment. Don’t be afraid to tap your network and online resources such as LinkedIn, Indeed and others to help answer the question: Will this manager help make me a happier, more empowered employee? Once you’ve done that, use the interview process to see if your values align with a potential manager’s values.

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The best managers will connect with their employees and demonstrate genuine care and respect.

That sort of connection isn’t formed through a one-on-one held once a week where you go through a tick-box exercise, but rather by asking what’s going on in their lives and being aware when an employee might need some extra support.

“It’s more the informal, sit down with a cup of coffee, and discuss where you are at and where you would like to grow,” said Teresa Kruger, Ph.D., senior manager, People and Business Solutions for BDO South Africa, based in Johannesburg, South Africa. “I think that has a lot more value than any formal structures.”

During the job interview process, you might get a hint of how your potential boss views the employee-manager relationship by taking note of whether they seem curious about you as a person. Do they ask you anything other than directly work-related questions? If you ask about their life or background, do they get uncomfortable or annoyed?

Depending on the type of boss you prefer, it may be a red flag if they show little interest in you other than your potential work output.

Recognizes Strengths and Empowers Employees to Use Them A good manager will keep you engaged, and you will be less likely to leave a company. They provide growth opportunities and encourage you to learn from projects you have ownership in.

If the potential for growth is important to you, ask during the interview about what opportunities employees have for skill building at the company and how often they are allowed to work on a project with minimal oversight.

“I think micromanagement was out of the window long ago,” Kruger said. “It’s definitely more about a coaching and mentoring type of relationship between employee and manager and allowing the scope and opportunity to grow.”

Employees want to be utilized in a manner that highlights all their strengths, she added, and managers can facilitate that by figuring out what those skills are and thoughtfully placing employees on projects they are best suited for.

Talk to current and past employees of the company about their career trajectories. If you find stagnated employees stuck in long-term positions without gaining new responsibilities or skills, it could be a sign management is not empowering them.

Fosters Honesty and Vulnerability Managers can create a healthy, trusting environment by letting employees know that everyone can be vulnerable. How a potential manager reacts to your answers about your shortcomings and areas you want to grow in can be a gauge of whether your potential boss practices and encourages vulnerability and honesty.

“Being vulnerable doesn’t mean they’re weak, but it does mean they can be open about their shortcomings and they’re not going to be attacked for it — they’re going to be supported in them,” said Drew Dudley, founder of Day One Leadership, a Toronto-based leadership coaching organization.

“A manager makes that clear by demonstrating it, by being open about the things they’re not good at or the things they need help with, and it gives permission to the employees to do the same thing. Then what happens is people aren’t spending their energy covering up the things they’re afraid of or bad at. They’re spending their energy doing their best work.”

If it seems appropriate, ask about ways a potential manager is planning to improve the company or employee morale to see how they discuss weaknesses or areas that could use improvement. It’s a good sign if they

“When a supervisor becomes a thought partner with you, you can get the job done more effectively, not just efficiently.” look at vulnerabilities as a starting point for potentially exciting growth rather than blemishes that need to be covered up.

Maintains Consistency and Fairness Dudley maintains that along with vulnerability, consistency is necessary to create an environment of trust.

“Consistency means the employees know that the manager has a set of clear criteria for decision-making, which means no matter what the decision, they’re going to make it using the same criteria every time,” Dudley said.

Consistency is essential when it comes to how managers deal with delivering criticism and discipline.

“If I come late, I’m going to be dealt with in a certain way, but if someone else comes late and they don’t get the same treatment, obviously I’m going to start thinking, ‘Hang on, there’s something wrong here,’ and that’s where a lot of managers lose that credibility,” Kruger said.

The best way to figure out whether a potential boss is consistent is by speaking with past and current employees, if possible. During the interview process you could ask your potential boss about company policies that are important to you. Then you could verify those answers with past or present employees to see if the responses match up with the reality of how the boss handles various situations.

Promotes Clear Communication Saving perhaps the most obvious for last, good managers need to maintain clear and effective communication.

“A good manager is someone who is clear, who listens, and they’re not just always telling, but understanding what it is their people need,” said Bob Hewes, Ph.D., senior partner at

Camden Consulting Group based in Boston. “When a supervisor becomes a thought partner with you, you can get the job done more effectively, not just efficiently.”

A potential manager’s communication skills can at least partially be revealed during the interview process. Do they maintain eye contact? Do they seem genuinely curious about what you’re saying? Are they asking questions about areas that are important to you? And do they comprehend and enthusiastically answer any questions you have for them?

Beyond being an effective listener, good managers make an effort to look past behavior to the underlying cause and address problems with empathy.

“People leave because of managers, that’s what the data says, but I always point out to managers that at the foundation of any individual or organizational dysfunction, there is a fear,” Dudley says. “People are afraid that they’re going to have something taken away (money, a job, influence, respect) or they’re afraid they’re going to have something given to them they don’t want (more work, a task they’re not equipped for), and when you deal with issues at the level of the fear that generates them, rather than the behavior that emerges, you’re always going to be better off.” n Hannah Pitstick is a freelance writer based in the U.S. To comment on this article or to suggest an idea for another article, contact Drew Adamek, an FM magazine senior editor, at Andrew.Adamek@aicpacima.com. This article first appeared in Financial Management magazine. For more articles, sign up for the daily email update CGMA Advantage at http://bit. ly/2svn2AY.

MAY 2019 AZ CPA

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What I Can Do With My ASCPA Membership I Can: Learn • Grow • Lead • Build Relationships As an ASCPA member, you have opportunities to learn, grow, lead and build relationships. The ASCPA is here to serve you and be your professional home for every stage of your career.

MEMBERSHIP FAST FACTS: 5,300+ ASCPA Members 8 hours FREE CPE Annually

412

1,790

New/Reinstated Members in 2018-19

20+ Years of Membership

25% Savings on Most CPE

ACCESS YOUR CPE TRACKER Login to your ASCPA profile www.ascpa.com

15% Additional CPE Savings *Register by May 31

GET NEW CLIENTS! Join the CPA Referral Service Free listing: www.ascpa.com/findacpa

The “Listserv” is the same as Connect Join the conversation at connect.ascpa.com 18

AZ CPA MAY 2019

Learn

Stay up to date with changing laws that affect the profession.

Take courses that fit your schedule — in person or online. Learn from your peers and join educational discussions daily on the ASCPA Connect site. Don’t forget to take advantage of the free CPE offered throughout the year!

TAKE ACTION Check your inbox for your 2019-2020 ASCPA renewal invoice.

Grow

Develop your technical skills with programs geared to enhance your career. Impact your business, register for the CPA referral service and grow your business with potential new clients. Save money by using exclusive member savings and preferred provider services.

Lead

Be an inspiration by volunteering as a speaker, presenter, write an article or join a section/conference committee. Using your skills and experience will inspire others, including future CPAs!

May 31, 2019 Last day to save an additional 15% on CPE

Build Relationships

Be proactive and challenge yourself by attending ASCPA events, taking courses and interacting with your peers. Don’t wait – build your brand and your professional community today.

RENEW TODAY! You must renew your membership by May 31 to take advantage of the 15% early registration discount. www.ascpa.com/renew

QUESTIONS or UPDATES?

Happy 50-Year Anniversary

Call: (602) 252-4144 Email: membership@ascpa.com

Congratulations to the following ASCPA members on their 50 years of ASCPA membership:

Ira S. Feldman Paul A. Finger

Gerald Levy Allen L. Nahrwold

Carl H. Osterman Steven M. Scheiner Nancy Thomas Edward A. Villanueva MAY 2019 AZ CPA

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AZ CPA MAY 2019

6/16/14 12:40 PM

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

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

Fees: Members: $25 Nonmembers: $40 Online Access Go to www.ascpa.com/quickquiz to access links to all active quizzes. Once a quiz is purchased, a link and password will be emailed to you. Your results will be sent immediately after completion, 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 May 2020. Please note that users have three attempts to pass the quiz with at least a 70 percent score.

May 2019 Issue of AZ CPA* 1. In his Chair’s message, Jared Van Arsdale encourages support of: m The CPA Bill m The ASCPA PAC m The Realtor Bill 2. Who are the AICPA Council Members on the ASCPA Board of Directors for 2018-2021? m Rob Dubberly & Greg Nelson m Mike Allen & Jared Van Arsdale m Kelly Damron & Paul Evans 3. Who will receive the Excellence in Teaching Award for 2019? m Joan Smith, MBA m Katharine Drake, Ph.D. m Deborah Davenport, CPA 4. The Arizona Transaction Privilege Tax Ruling TPR 19-1 was issued on: m April 15, 2019 m Jan. 10, 2019 m April 15, 2018 5. The Arizona Department of Revenue agreed to abate penalties assessed because property management companies failed to timely report

or pay sales taxes for rental properties they manage. TPR 19-1 was implemented because: m There were complications involved with the process of merging pre-existing city licensing information with new Department information m Technical difficulties made payments difficult m All of the above

6. The new Arizona Limited Liability Company Act (ALLCA) has what two effective dates? m 2018 & 2019 m 2019 & 2020 m 2020 & 2021 7. The new ALLCA changes the old “one member, one vote” default to voting according to ownership percentages. m True m False 8. Gallup found that 66 perecent of employees left their job “to get away from their manager.” m True m False 9. What qualities were presented as ideal in the manager-employee relationship? m Consistency & Fairness m Oversight & Assertion m Command & Confidence

10. The ASCPA’s Connect site is the same as what? m ASCPA Blog m Website m Listserv

Quick Quiz Registration Name: ____________________________________________________ Email:_____________________________________________________ Telephone: _________________________________________________

Payment

m Member: $25 m Nonmember: $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 180, Phoenix, AZ 85034-2040; fax to (602) 252-1511 scan and send to ASCPACPE@ascpa.com.

MAY 2019 AZ CPA

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Classifieds Business Opportunities $520K+ MESA, AZ TAX AND ACCOUNTING FIRM FOR SALE Contact cpapracticearizona@gmail.com.

Mesa based 30+ year practice, partner seeks retirement. 50%+ business related work, $520k in billings/$300k in discretionary owner income. Owner will help transition, can be flexible on deal structure, and is seeking a sale this year.

SCOTTSDALE CPA TAX AND ACCOUNTING SERVICE FOR SALE $750k+ in Billings - Scottsdale-based 35+ year practice, partner seeks retirement. Consistent growth, 77% business related work, $750k in billings/$370k in discretionary owner income. Owner will help transition, can be flexible on deal structure, and is seeking a sale this year.

Contact cpapracticearizona@gmail.com.

PARTNERSHIP OPPORTUNITY — Eaton-Cambridge CPA P.C. - Interested in joining a fast-growing Tax/Wealth Management Team? We are looking for an entrepreneurial CPA interested in becoming a partner. Great opportunity for someone who has considered going out on their own or doesn’t want to wait

a decade for partnership. Send resume to marc@eatoncambridge.com.

Employment TAX PREPARERS — North Scottsdale CPA Firm seeking Tax Preparer to prepare business and personal returns.

Must have 3-years recent experience in preparing returns. QuickBooks Proficient. Preference for EA/CPA. Growth Opportunity, Benefits, Competitive Salary DOE. Contact: Joy@partridgecpas. com.

EXCELLENT CAREER OPPORTUNITY for 5-15 year CPA with strong tax and accounting experience. We are an independent, mid-size firm with a diverse small/medium business and individual client base. Our strong, continued growth is a direct result of our people and our service. We offer a friendly, positive work environment with competitive salary, benefits and growth potential. Please contact us at slpsht99@aol.com.

or better, proficient in QuickBooks, both desktop and QBO. Managerial accounting experience a plus. Work with small business owners for their varied accounting and bookkeeping needs. You choose how much and when you work.Email and resume to: info@onthemoneyaz.com.

Office Space for Lease EXECUTIVE OFFICE SPACE FOR LEASE — Executive office $800.

Beautiful garden-style office complex in a great office environment located in north Phoenix. Easy access to both the SR 51 and SR 101 just north of NWC of Tatum and Shea Boulevard. Ample parking, beautiful conference rooms, seminar room, and copier, telephone and internet ready. Contact Julie (602) 953-5000.

For classifieds and display advertising, go to www.ascpa.com.

ON THE MONEY, LLC — We have accounting contract opportunities available. Require accounting degree

2019-20 CPE Schedule Now Available Renew your membership and register for classes by May 31 to take advantage of an additional 15% off most ASCPA CPE. Check out the new version of the 2019–20 CPE Catalog which has three new sections Including: • Around the State • Popular Presenters • What’s New Renew today at www.ascpa.com/renew Online version of CPE Catalog: www.ascpa.com/catalog

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AZ CPA MAY 2019

differences, and explain why the most sophisticated investors in the 21st century were duped by this most basic of all fraud schemes. The session will also explain the defining and descriptive characteristics of Ponzi schemes and explore whether it is fair or accurate to compare such schemes to the Social Security program.

Financial Planning Conference June 6

Desert Willow Conference Center, Phoenix Available In-Person or via Webcast Pricing: Member: $299 Nonmember: $399 Recommended CPE Credit: 8 hours As a CPA providing financial planning services, your clients trust you to offer the best, most objective advice based upon your thorough understanding of the latest issues and information. This conference is designed for practitioners already providing this service, those interested in adding financial planning to their practice and those wanting to get up to speed on these important issues. Join us as expert speakers explore best practices, challenges and opportunities that prepare you to be the advisor of choice.

CONFERENCE HIGHLIGHTS: Welcome — John Chichester, TrustBankCommittee Chair Economic Update Jim Rounds, Rounds Consulting Group, Inc. Rounds will provide an update on the most important things impacting our economy, from basic data summaries, to what the federal and state governments are doing to advance (or restrict) our ability to grow and prosper.

Carlo Ponzi, Bernard Madoff and … the Social Security Program?

David Cotton, Cotton & Company, LLP Carlo Ponzi “invented” the Ponzi scheme. Bernie Madoff seems to have “perfected” it. Some politicians have recently called the Social Security Program nothing but a Ponzi scheme. This session will explain Ponzi’s and Madoff’s two schemes, describe key similarities and

Common and Not-So-Common Risks for Financial Planning Clients Eric Franz, UBS Financial Phillip Glasscock, Smith Saks Kuzmich PLC Risks clients are exposed to are seemingly infinite. Focusing solely on financial risks places your clients, and your relationship with them, in peril. Expanding the scope of your client conversations to incorporate other aspects of their lives goes a long way to protecting their interests and fulfilling your duty of care responsibilities.

Managing Client Expectations Alex Cudzewicz, Oak Brook Asset Management, Corp.

A key to satisfied financial planning clients is to manage their expectations through client communication and education. Help clients understand volatility, asset allocation, rebalancing accounts and what returns are possible or not with a diversified portfolio of financial assets.

Understanding Corporate Trustees Greg Furseth, TrustBank What is a corporate trustee? How can you evaluate a corporate trustee? Could a corporate trustee help you?

Furseth will share seven reasons to use a professional to help you build, manage and protect your wealth.

New Tax Issues: §199A, Opportunity Zones and More Ed Zollars, Thomas, Zollars & Lynch, Ltd. We've been living with the changes brought to us by the Tax Cuts and Jobs Act for just about a year and a half and now have significant guidance on the new issues. This session will look at the guidance we've gotten on §199A's 20% pass-through deduction, qualified opportunity zones and other changes brought about by the Tax Cuts and Jobs Act of 2017. The session will also look at what guidance remains to be issued regarding this bill.

For more information and to register: www.ascpa.com/fpc2019

MAY 2019 AZ CPA

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Concurrent Sessions Three:

Dashboards & Data Analytics: Using Data to

Drive Greater Social Impact in Our Communities

Dave Paddison, Impact Analytics

Economic Update

Not-for-Profit Conference June 20

Black Canyon Conference Center, Phoenix Available In-Person or via Webcast Pricing: Member: $299 Nonmember: $399 Recommended CPE Credit: 8 hours Not-for-profit organizations must learn how to operate efficiently and effectively, making the most of their limited resources. This conference will bring you up to speed on the most pressing issues facing the industry: ethical risks, internal controls, revenue recognition and dashboard reporting

What Not-for-Profits Gain (or Lose) Under Tax Reform Amy O’Loughlin, CBIZ MHM, LLC

Concurrent Sessions Four:

Emerging Technologies

Nick Mortensen, Eide Bailly LLP

Stan Pugsley, Eide Bailly LLP

To Record or Not to Record?

Harriet “Hatsy” Cutshall, Your Part-Time Controller, LLC

Basic Taxes for Tax Exempt Organizations Michael Payne, Payne Financial, PLC Chad Huebsch, Huebsch Financial LLC

Concurrent Sessions Five:

Adoption Stories: A Discussion on the

Implementation of FASB 2016-14

Panel with Kathy Gerhart, State Bar of Arizona Cybersecurity Mike Nyman, CLA (CliftonLarsenAllen) LLP

CONFERENCE HIGHLIGHTS:

Welcome — Jackie Eckman, CLA (CliftonLarsenAllen) LLP, Committee Chair

Best Practices for Protecting Your Nonprofit Status

Robert Erven Brown

Schmitt Schneck, Casey Even & Williams, P.C.

Lisa Lumbard, Lisa B. Lumbard, CPA

Ethical Risk in Nonprofits and How Accountants Can Help Marianne Jennings, W.P. Carey School of Business Concurrent Sessions One: How Not-for-Profit Organizations Can Prepare for the New Leasing Standard Allan Klose, CBIZ MHM, LLC Nonprofit Number Wrangling Carolyn Sechler, Sechler Morgan CPAs PLLC

Arizona’s Leadership in Deregulation and the Impact on Financial Professionals Serving the Nonprofit Community Cindie Hubiak, Arizona Society of CPAs

Thank You to Our Sponsors

Intro to the 990 Form Brenda Blunt, Eide Bailly LLP

Platinum Sponsor Eide Bailly LLP

Concurrent Sessions Two:

Functional Expenses

Sarah Zelhart, Make-A-Wish America

Gold Sponsors CBIZ MHM, LLC • CLA (CliftonLarsonAllen) LLP Fester & Chapman, PLLC • Henry+Horne National Bank of Arizona Your Part-Time Controller, LLC

Payroll Brenda Blunt, Eide Bailly LLP

Cover Your Assets: Internal Controls for Any Size Nonprofit Lisa Stevenson, Stevenson, CPA, LLC Jill Foley, Four Leaf Financial & Accounting

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AZ CPA MAY 2019

www.ascpa.com/npc2019

Financial Planning Conference June 6

www.ascpa.com/fpc2019

Not-for-Profit Conference June 20

Platinum Sponsor

www.ascpa.com/npc2019 MAY 2019 AZ CPA

25

Arizona Society of CPAs 4801 E. Washington St., Suite 180 Phoenix, AZ 85034-2040

PRSRT STD U.S. Postage PAID Phoenix, Arizona Permit No. 952 ADDRESS SERVICE REQUESTED

PLAYFULL

EBLAWYERS.COM

602.271.9090

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AZ CPA MAY 2019