AZ CPA July/August 2011 by ASCPA

CPA JUly/August 2011

The Arizona Society of Certified Public Accountants

Keeping Up With Technology New SOC Reports • Mediation and CPAs www.ascpa.com

• CPA Futures Looking Brighter

Special Offer for State Society Members*. ADP®gives you the choice of doing business the way that best fits your firm. Whether you want to refer payroll or process it yourself, ADP provides world-class payroll and beyond payroll services, so you can focus on what matters most: growing your business and helping your clients be successful. In addition, your state society membership means that you will be rewarded with the following special benefits when you partner with ADP: ■

Payroll for your firm — FREE for up to 50 employees with discounted solutions to meet the needs of larger businesses

■

Special discounts for your firm’s clients

■

Free Master Tax Guides from CCH, a Wolters Kluwer business

■

30% discount on all CCH tax and accounting publications

ADP is a Recommended Payroll Provider for the Arizona Society of CPAs. Call 480-477-8992 today. Visit www.accountant.adp.com for valuable tools and resources for Accountants. *Discount/free payroll applies to companies with 1 to 49 employees that sign complete ADP sales order and to all features of standard payroll processing invoiced on client’s regular processing cycle and does not include additional non-payroll services; excludes pass through costs, courier and other delivery fees, including off cycle fees, hardware, or penalty and interest fees. Only available to new ADP Clients using EasyPay sm or RUN Powered by ADP® in the continental U.S. Must be set-up for direct debit of fees (“DDF”) as the payment method.

2 AZ CPA y JULY AUGUST 2011

© 2011 ADP, Inc. The ADP Logo, ADP are registered trademarks of ADP. EasyPay is a service mark and RUN Powered by ADP is a registered service mark of ADP, Inc. All other trademarks are the property of their respective owners.

Every small business wants to grow.

To help you do so, we’ve identified five areas key to every small business in our new guide, 20 Ideas for Small Businesses and Pitfalls to Avoid. Call 1.800.803.8367 for your FREE printed guide, or download a copy by visiting roberthalf.us/smallbusinesscenter. Phoenix • Phoenix West • Chandler • Tucson © 2011 Robert Half. An Equal Opportunity Employer. 0211-9010

JULY/AUGUST 2011 y AZ CPA

CPA

JULY AUGUST 2011

Features

Volume 27 Number 6

The ASCPA Unveils New Website

Mediation and CPAs

Members will benefit from the changes coming their way when the new ASCPA website goes live in July.

New Series of SOC Reports Replaces SAS 70 Reports

AICPA Trends Report Looks at Supply and Demand for Accounting Students

by Dustin Lubertazz

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

4 AZ CPA y JULY AUGUST 2011

CPA Futures Looking Brighter

PrInciples of Accounting Remain Unchanged But Technology Raises the Bar: Four Things Accountants Must Do to Keep Up

Learn why mediation may be the best alternative to a dispute. by Ken Mann

Columns & Departments 6

Chairâ&#x20AC;&#x2122;s Message by Mark Anderson, CPA

Focus on Members

22 Classifieds

CPA

Conﬁdential Business Sales

The Arizona Society of Certified Public Accountants

President & CEO

Cindie Hubiak

Editor

Patricia Gannon

Locally Serving CPAs & Businesses in Arizona

• CPA Practice Specialty

Copy & Advertising Deadline The first of the month one month prior to publication date. Board of Directors Chair Chair-Elect Secretary/Treasurer Directors

Mark Anderson Armando Roman Karen Abraham Anita Baker Rob Dubberly Megan Faust Barb Muller Julie Norton David Richardson Craig Robb Elva Vivas David Walser Corrine Wilson Neal Young Kevin Yeanoplos

Immediate Past Chair Julie Klewer AICPA Council Members George Cohen Layne Simmons Chapter Presidents Southern Chapter Northern Chapter Southwest Chapter North-Central Chapter

• Business Sales & Acquisitions • Exit Planning • Business Valuation Ryan Gipple (602) 614-3583 r.gipple@murphybusiness.com www.murphybusiness.com/tempe Murphy Business & Financial Corporation Southwest, Inc.

MBFC_Arizona_CPA_Assoc-RGipple.indd 1

3/21/2011 2:29:52 PM

Flo Zenblu CW Payne Jayne Wright Alyx Cohan

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 advertisements within this publication. Opinions expressed by correspondents and contributors are not necessarily those of the ASCPA.

We All Benefit From a Larger ASCPA

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

We are asking for your help to spread the word about the rewards of being part of the ASCPA. If you know of a CPA who is not a member, please encourage them to join.

Telephone (602) 252-4144 AZ Toll-Free (888) 237-0700 Fax (602) 252-1511

www.ascpa.com

As a token of our appreciation, you will receive two movie theater tickets for every CPA you refer who joins. We thank you for all you do for the profession. Please contact José at (602) 324-4741 or jherrera@ascpa.com for more information.

JULY/AUGUST 2011 y AZ CPA

Chair’s Message

by Mark Anderson, CPA

Mission on the Hill The Spring AICPA Council Meeting was held in Washington D.C. during the last week of May, and I was fortunate to attend. One of the purposes of the meeting was to meet with Arizona Congressional members and staff to talk about the profession. As a rookie to lobbying, I was anxious to understand the process better and experience our lawmaking practices firsthand. As we stepped out of the taxi and headed toward the Congressional office buildings, protesters greeted us, passionately pleading their case to us as if we were the ones casting a vote. From this visit, I experienced a small glimpse into the life of a lawmaker and the pressures they have to understand the myriad of issues and to vote according to their conscience as a representative of the people in their district. I knew my role was to simply and succinctly present our issues, describe how we wanted them to proceed and they would ultimately vote to benefit their constituents. My companions and I visited the offices of Senator Kyl and Representatives Flake, Franks, Giffords, Gosar, Pastor, Quayle and Schweikert. The AICPA was only one of many groups competing for their time, which coincidently included the AIPAC (American Israel Public Affairs Committee). I’m sure some staff members were confused until we started to cover our topics which did not include the U.S.—Israel relationship! We were there to lobby on the AICPA’s position on four topics: Tax Simplification, Adjusting Due Dates for Pass Through Entities (partnerships and S-Corporations), Stopping Tax Strategy Patents, and the Mobile Workforce State Income Tax Simplification Act of 2011.

6 AZ CPA y JULY AUGUST 2011

All of these issues are meant to ease the burden on CPAs, our clients, employers and more importantly, the voting public. I was impressed with the work that was done by the leaders of the AICPA to prepare us for a successful mission on Capitol Hill. All of the elected officials and staff I personally visited with appreciated our input and agreed with the AICPA on all of these initiatives. We also reiterated our support as CPAs to work with them on tax and budget-related bills. On a side note, when we stopped by the office of Representative Giffords, I was pleased to see her staff working hard and engaging in all of these issues as she continues her heroic recovery. We recognized their devotion in her absence. I have seen our PAC donations working at both the Federal and State level. I can assure you these worthwhile donations make a difference in our efforts to help lawmakers understand issues and needed legislation. Overshadowing our visit to the Hill was the constant reminder by presenting Congressional representatives of the significant challenges facing our lawmakers over the next few months. Regardless of which side of the political arguments you find yourself on, the

national debt and credit ceiling are real problems that will have a profound and long reaching impact on all of our personal and professional lives. Representatives from both parties agreed that a bipartisan approach is needed to navigate through these troubling times. Congressman Palazzo (R-MS) who served in the armed forces made the profound statement that “the biggest risk to our national security is our national debt.” We as CPAs know better than most that our government agencies must find a way to establish a realistic budget of revenues and expenditures and live within those budget constraints. We were also fortunate to hear from Barry Melancon, AICPA President and CEO, as he discussed additional initiatives underway at the AICPA that continue to bring credibility and relevance to our profession. I can truly state more definitely now than ever that I am proud to be a CPA and a member of both the AICPA and ASCPA. Our profession is in good hands and heading in a direction that will continue to make it a much soughtAZ CPA after and trusted profession.

Focus on Members

ASCPA Leadership attend the 2011 AICPA Spring Council Meeting in Washington, D. C. (L to R) Seated: Mark Anderson, Michael Daggett, Cindie Hubiak and Peggy Ullmann. Standing: Julie Klewer, Layne Simmons, George Cohen and Dan Baran. Matt Holdsworth, CPA, was honored by the Prescott Chamber of Commerce with its Visionary Award for leadership for community leaders under the age of 40. Henry & Horne, LLP, admitted Colette Kamps, CPA, and Marilyn Mays, CPA, as partners. Partner Mark Eberle, CPA, received the 2011 Segner Award from the Scottsdale Area Chamber of Commerce.

pesident at BeachFleischman PC, as a 2011 Father of the Year. Universal Technical Institute promoted Bryce Peterson, CPA, to vice president of information technology. Jordan Taylor, CPA, joined Capital Review Group as director of taxation.

Laura Leopardi, CPA, was crowned the new Ms. Arizona United States 2011 in May. Leopardi also won the Pageant’s Ms. Congeniality Award. Leopardi plans to implement her personal pageant platform of Achieving Health and Wellness At Any Age. Through her work as a board member and volunteer of the West Valley Cancer Connection, she promotes education and awareness of making healthier choices in daily living for all ages.

James M. Susa, CPA, was appointed as chair of the Arizona State Board of Tax Appeals and will also serve as chair of the State Bar of Arizona Tax Section. James Busby, CPA, was elected as chairman-elect of the Section. Tony Finley, CPA, was elected as a public member of the board of governors of the State Bar of Arizona. The team at The Accountant’s Office was honored by the Better Business Bureau with their prestigious 2011 Business Ethics Award. The Father’s Day Council of Tucson named David J. Cohen, executive vice

During Gary Freed’s celebration of his retirement from Clifton Gunderson, he presented his son, Eric, with his CPA certificate. Eric works with Ernst & Young in Texas. JULY/AUGUST 2011 y AZ CPA

Coming soon to a computer near you…

The New ASCPA Website The Arizona Society of CPAs has been hard at work revamping our website: www.ascpa.com. Our updated website will make accessing ASCPA programs easier for you. Here are just a few improvements: CPE • Increased course search functions makes it easy to search and find the perfect course • CPE Tracker—keep track of the CPE you take from us, as well as the CPE you take from others – all in one easy place • CPE Certificates will now be available at your fingertips MY ASCPA Profile • Members will have a more personalized experience and be able to update their own information • Personalized Calendar of Events • Easier Online Dues Payment • Ability to add your own photo and join an opt-in member directory – available to members only Events and Membership Activities • Increased accessibility to upcoming events • Events calendar and fun photo galleries • More member interaction with blog population, chapter, section and committee pages, and listserves

Watch for the new and improved www.ascpa.com coming soon!

And More • Easy to access news section • Magazine will be easier to read online • New Marketplace page featuring online ordering of ethics exams, job notices, classifieds, tax guides, professional service listings – all automatically entered and billed • A more substantial page for future CPAs • User-friendly CPA Referral Service

We hope you will be pleased with the changes—watch for the new site coming soon. 8 AZ CPA y JULY AUGUST 2011

New Series of SOC Reports Replaces SAS 70 Reports Since spring 2010, CPAs have been informed about a transformation of Statement on Auditing Standards No. 70, Service Organizations. The next generation of service organization reports offers a series of reporting options aimed at providing users with information they need about entity controls that have been outsourced to a service organization. The three new reports are called Service Organization Control ReportsSM, or SOC reports for short. In recent years, SAS 70 was being used improperly. Many service organizations’ marketing materials claimed they were “SAS 70 certified” or “SAS 70 compliant” when there never was such a designation. In addition, many service organizations indicated that the SAS 70 audit examined nonfinancial subject matter, such as security, availability, processing integrity, privacy or confidentiality, when that was never an intent of the standard.

JULY/AUGUST 2011 y AZ CPA

To conform U.S. standards to international standards, the AICPA’s Auditing Standards Board in April 2010 under its Clarity Project issued a new attestation standard that superseded SAS 70’s guidance for service auditors. Furthermore, to alleviate past SAS 70 misunderstandings and to better meet market needs, two authoritative attestation guides have been developed to assist with the new SOC engagements, including a separate guide that illustrates the examination of controls over nonfinancial areas. • SOC 3 reports are Trust Service Here are brief descriptions of examination reports. They cover the the three new SOC reports: • The examination of controls that pertain to financial reporting at a user organization has been moved to a new Statement on Standards for Attestation Engagements, SSAE 16 – Reporting on Controls at a Service Organization, which results in a SOC 1 report. SOC 1 reports examine controls at a service organization that impact a user entity’s controls over financial reporting. This report is to be used only by auditors of user organizations and the management of user entities. SSAE 16 makes clear that the auditor is required to obtain the same level of evidence and assurance as did the former SAS 70 service auditor engagement. A new attestation guide, Service Organizations: Applying SSAE No. 16, Reporting on Controls at a Service Organization, will help practitioners perform and report on these engagements. • SOC 2 reports provide detail on controls at a service organization covering security, availability, processing integrity, confidentiality or privacy. It is generally a restricted-use report. To assist practitioners with these report engagements, the AICPA developed a new authoritative guide, Reporting on Controls at a Service Provider Relevant to Security, Availability, Processing Integrity, Confidentiality or Privacy. The SOC 2 guidance was designed to fill the market void where SAS 70 may have been applied incorrectly.

10 AZ CPA y JULY AUGUST 2011

same subject areas as SOC 2, but in a shortened version (about one page, in fact) that can be used in a service organization’s promotional efforts. SOC 3 reports can be used as a marketing tool, with potential customers for instance, to show they have appropriate controls in place to mitigate risks on the nonfinancial subject matters. “The CPA and the client together should decide which engagement(s) and resulting SOC report(s) are most appropriate for the user,” said Cindie Hubiak, president & CEO of the Arizona Society of CPAs.“These reports respond to a market need, while leveraging the core competencies of CPAs and upholding our profession’s mission to protect the public interest.” SAS 70 audits for service organizations should no longer be performed as SSAE 16 is effective for service auditors’ reports for periods ending on or after June 15, 2011, with early application permitted. The new attestation guides became effective upon issuance. So, all three reporting options for service organizations are now illustrated, including the new reports for examining and reporting on controls over security, availability, processing integrity, confidentiality or AZ CPA privacy.

Principles of Accounting Remain Unchanged, but Technology Raises the Bar: Four Things Accountants Must Do to Keep up By Dustin Lubertazz Luca Pacioli, an Italian mathematician and Franciscan friar, is widely known as the “Father of Accounting” for publishing 36 chapters on the double-entry accounting method used by Venetian merchants during the Italian Renaissance. His book, Summa de Arithmetica, Geometria, Proportioni et Proportionalita (which translates, “Everything about Arithmetic, Geometry and Proportion”), was written as a textbook for students in Northern Italy at the end of the 15th century. Pacioli’s documentation of double-entry accounting and ledgers taught entrepreneurs of the day how to conduct business using timely and accurate financial information, and it established the fundamentals of accounting still practiced today.

JULY/AUGUST 2011 y AZ CPA

To attract new clients, you have to meet prospects where they are—online.

Pacioli’s fundamentals were only feasible thanks to the written numeral system and the abacus developed before that. And since then, the industry has seen further and more ground-breaking developments including the introduction of the typewriter, then computers, and later the internet. With each of these milestones, technology not only impacted how accountants handle financial information but also how they interact with their clients. With the changing technological landscape, what must accountants do to stay competitive in the future, and how will technology change the future role of the accountant?

1) Increase Value-Add Services to Retain Clients Compliance work is getting more and more standardized and streamlined due to technological advances. If you can shift time and resources from these commoditized services, focus more on becoming an indispensible advisor. It is no light commitment and might require a paradigm shift by some, but balancing compliance work and helping clients make strategic decisions to protect and grow their business is the role of the accountant for the foreseeable future. Craig Weeks, a consultant to accounting firms, shares what he has seen in the industry and what role he thinks accountants should play, “One challenge the accounting field faces today is coming to grips with the incredible amount of financial detail their clients are both receiving and generating. The new frontier for accounting/tax

12 AZ CPA y JULY AUGUST 2011

related information services is filtering, assembling, prioritizing and then presenting the most vital data in a format that is readily usable by the management team.”

2) Differentiate Your Firm It is normal now for the buying process to begin online with a search engine. What makes your firm different from the firms listed ahead of you in search results or from the firms down the street? Do something to stand out when speaking with prospects, and prospects will spread the word. For the initial meeting, familiarize yourself with their industry beforehand, provide something more to take home than your marketing brochure (maybe a one page document with a few areas of focus and strengths), and follow-up with a handwritten thank you note. Many firms, like WithumSmith+Brown in New Jersey, have embraced the opportunity to utilize technology to differentiate their overall services to current clients. Justin O’Horo, senior manager at WS+B, calls it his duty: “Our responsibilities as CPAs command that we are our clients’ most trusted business advisors and with the abundance of technology solutions available, it is critical that we use the right applications to help us maintain that status. [We are] relying on a multitude of additional platforms for the dual purposes of adding efficiency and effectiveness to our required procedures while simultaneously providing value-added service to our clients.”

3) Build an Online Presence If prospective clients start their buying process online, it is important for your firm to at least be among search engine results. That is difficult, though, if your firm does not maintain a website. According to the 2010 AICPA MAP Survey, 33 percent of CPA firms still don’t have an active site. To attract new clients, you have to meet prospects where they are—online.

4) Be Conscious of Your Clients’ Time (or Lack Thereof) - Business Owners are busy running their business, so be conscious of their time and make things easy for them. Technology can help: (a) Make file transmission less of a hassle by giving clients the ability to connect with you online through a client portal. (b) Provide detailed information on your services through your website, so prospects and clients can easily find what they are looking for. (c) Stay in touch with them proactively and regularly; consider sending out an electronic client newsletter or other regular electronic correspondence. Ultimately, when evaluating how to move forward with technology in your firm, it is vital to understand your market, clients and the strengths that make your firm unique. Given how far technology in the accounting industry has come since the time of Pacioli, it is no longer an option just to provide timely and accurate financial information. Exploit new technologies in your client interactions, and you’ll find that your firm is better prepared to gain and AZ CPA retain valuable clients. Dustin Lubertazzi is a senior consultant for Sageworks, a leading provider of private industry data, financial analysis, and risk management software for accounting firms and financial institutions. He can be reached at www.sageworksinc. com.

MEDIATION and CPAs by Ken Mann, Esq.

“This case will settle over my dead body!” snarled the adversary’s general counsel during a break in my deposition of his boss – responding to the reasons I offered why both sides would be better served by settling than going to the mat. Unfortunately, his defiant words proved prophetic. It took about seven more years, including a two-week federal jury trial, an appeal, a reversal, and, oh yes, his fatal heart attack, before the case settled in a second mediation before the second trial. So why should CPAs care about mediation? Because you, your employer, your company or your client may become involved in a dispute and what you know about mediation may save you money or make you money. For in-house CPAs, the examples here can be extended by analogy, so that depending on context, the employer may variously be viewed as the CPA or the client.

CPAs as Parties CPAs may become parties to a lawsuit, whether to sue for unpaid fees, or if sued by unhappy clients (or occasionally, by third parties asserting some basis to sue), or both – e.g., where a sued client not only denies liability, but also files a counterclaim that your services were deficient. Even assuming you recoup (or your carrier pays) some or all of your legal fees, the CPA loses – forever -- the billable time that you devote to that litigation. I fully understand fighting as a matter of principle; but don’t lose sight of the interest.

JULY/AUGUST 2011 y AZ CPA

Arizona Society of Certified Public Accountants Members may be eligible to

Save 5% on quality health inSurance from Blue Cross Blue Shield of Arizona. Call to see if youâ&#x20AC;&#x2122;re currently receiving the Association Discount.

*Discount is based on BCBSAZ published rates and only applies to certain PPO individual under 65 plans (will not apply to all plans). Applications must meet all eligibility requirements including qualifying for coverage under BCBSAZ underwriting guidelines. If approved for coverage, pre-existing waiting periods and waivers may apply.

08-1720

The Argus Group (602) 863-0080 ext. 105 or 106 TheArgusGroup.com

08-1256

08-1720 Broker Postcard 7.5x9.5 final.indd 1

14 AZ CPA y JULY AUGUST 2011

10/7/08 2:29:40 PM

Physicians are probably the most steadfast profession in reluctance to settling when sued, often to the consternation of their insurers. However, in recent years, several well-known and highly respected self-insured hospitals have begun using pre-suit mediation of medical disputes, among them, Rush Hospital in Chicago, University of Michigan Medical Centers and Drexel University in Philadelphia, with remarkable results. Not only did disputes get resolved much more quickly, inexpensively and privately, but the vast majority of patients, physicians and attorneys who participated were pleased with the outcome even when the mediation failed. (Not surprisingly, these pre-suit mediation programs typically screened out cases of gross malpractice; but the hospitals also made good faith, concerted efforts to settle those as early as possible, in post-suit mediation.) Often, the mere presence of the physician at the mediation, and an “I’m sorry,” were enough to satisfy the patient or the deceased patient’s family with the mediation process, even when accompanied by no money and only the physician’s frank but empathetic explanation of why bad things can and did happen without conduct below the applicable prevailing professional standard of care (and sometimes, accompanied by the hospital’s agreement to improve certain protocols going forward). This stood in contrast to the “conspiracy of silence” that often pervades bad medical outcomes. Additionally, the hospitals received the advantage of early input into how they might improve their procedures where the conduct didn’t quite rise to negligence, but could have been better. The State Bar of Arizona has a longestablished, voluntary, no-cost, successful, binding arbitration program for resolving attorney/client and attorney/ attorney fee disputes, but unfortunately does not currently have a formal mediation program for fee disputes. (However, it does use volunteer “settlement officers” to mediate disciplinary complaints filed by the Bar after an independent, volunteer committee of

attorney and public members has found probable cause of an ethical violation.) Some attorneys’ retainer agreements/ engagement letters require their clients to agree to binding arbitration of any future fee disputes. Some offer it after a dispute arises. Regardless, suggesting or requiring mediation as a first step - if not in the engagement letter, then at the first hint of a dispute—may be the best option for lawyer or CPA/client relationships. If the above sounds attractive, ASCPA members can seek a mediator or arbitrator themselves, or obtain one through the American Arbitration Association. I understand there is currently no provision in the CPA licensing statutes expressly addressing alternative dispute resolution.

CPAs As Experts Prudent parties consult their CPAs, and sometimes other financial experts, before (and occasionally during) an important mediation. For example, a CPA’s advice before settlement is prudent regarding potential significant tax consequences and/or GAAP reporting requirements under various settlement alternatives; and if a structured settlement via annuity is contemplated, a knowledgeable insurance broker is also essential— for quotes, carrier ratings and options. Similarly, “a picture’s worth a thousand words.” Timely brainstorming with counsel and one’s CPA in preparation for mediation often generates visuals, compilations, etc. that clearly and persuasively demonstrate the key financial matters for opposing parties, counsel, and the mediator. (Most lawyers don’t take accounting courses as an elective. Accordingly, your informational charts, etc. should usually assume all parties’ lawyers have the accounting knowledge of the average judge and juror—zero.) In general, mediators are bound by confidentiality unless waived. Furnishing the mediator “smoking-gun” documents in strict confidence often accomplishes little besides mediator education. After all, the mediator is the neutral facilitator to persuade one’s

adversary, and necessarily cannot be as persuasive if his/her lips are sealed regarding the confidential documents.

Closing Observations I recall mediating a dispute (before our current economic tsunami) between a managing partner and his less sophisticated silent partner over their numerous and diversified real estate holdings. Both parties brought their CPAs, and both parties had outstanding attorneys and CPAs. I believe the parties’ counsel, and I did a worthy job in effecting a mediated settlement (signed near midnight); yet, I’d have to give the MVP award to the parties’ CPAs. Mediation won’t work if conducted in bad faith, or, as occasionally occurs, if a party or its counsel inadvertently sabotages the process. (For example, “you’re a crook and we’ll prove it at trial” rarely endears a defendant into cutting a settlement check – even if he is a crook.) However, properly and timely utilized —sometimes pre-suit, other times after some preliminary judicial or arbitral skirmishes, but usually before tempers and positions harden into steel and “scorched earth” has become the battle cry— mediation can be a valuable tool. Mediation can minimize the time, professional fees, related costs, executive and staff distraction, publicity, emotional baggage, etc. devoted to conflict resolution, and yield the best overall outcome. To litigators, combat is exhilarating, and there are some matters that simply can’t be resolved any other way. But for most parties and disputes, closure and control over the outcome are usually preferred. Using a trained and experienced mediator can enhance the odds of closure on acceptable (and often creative) terms. Trials are a little like do-it-yourself open-heart surgery. You have the right; but the results may AZ CPA prove disappointing. Ken Mann has a law office in Scottsdale (ADR and Law Office of Kenneth L. Mann). He is a member of the Arizona and Florida Bars and a former CPA (FL and NC). He can be reached at ken@ reasonablemann.com or (480) 789-1025.

JULY/AUGUST 2011 y AZ CPA

PER MONTH*

Business-class Internet, phone and free long distance •

• • •

Get to know the

BUSINESS SIDE OF COX.

Up to 33 phone features including voice mail, call forwarding and three–way calling 5M download/1M upload Internet Security Suite to eliminate potential viruses Online backup to protect your data

Call Today!

Phoenix: 623-594-7299 Tucson: 520-300-5283

coxbusinessaz.com

Increase your productivity through tax season and beyond. With Cox Business, you can securely share documents faster, simplify billing by tracking client calls with VoiceManagerSM and instantly connect multiple locations via call or Web conference.

It’s not Cox. It’s Cox Business.

Internet. Data. Phone. TV.

*Offer valid until 9/30/11 to new customers of Cox Business VoiceManagerSM Basic Service and Cox Business InternetSM 5.0Mbps/1.0Mbps in Arizona Cox-wired, serviceable locations. Minimum 3-year service contract required. Free installation offer includes waived standard phone installation fees and waived standard Internet installation fees. Additional costs for installation, construction, inside wiring and equipment may apply. Offer price includes monthly service fees for 1 VoiceManager Basic line and up to 33 free features, 5.0Mbps/1.0Mbps Internet service, and free long distance is limited to 250 minutes every month for calling within the continental United States, Alaska, Hawaii, Guam, Puerto Rico and the U.S. Virgin Islands. Offer does not include applicable taxes, surcharges or fees. Discounts are not valid in combination with or in addition to other promotions, and cannot be applied to any other Cox account. Telephone modem equipment may be required. Modem uses electrical power to operate and has backup battery power provided by Cox if electricity is interrupted. Telephone service, including access to e911 service, will not be available during an extended power outage or if modem is moved or inoperable. Cox cannot guarantee uninterrupted or error-free Internet service or the speed of your service. Actual speeds vary. Rates and bandwidth options vary and are subject to change. Services not available in all areas. Other restrictions apply. Telephone services are provided by Cox Arizona Telcom, LLC. ©2011 CoxCom, Inc., d/b/a Cox Communications Arizona. All rights reserved.

16 AZ CPA y JULY AUGUST 2011

CPA Futures Looking Brighter AICPA Trends Report Looks at Supply and Demand for Accounting Students

The AICPAâ&#x20AC;&#x2122;s 2011 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits Survey reports on the latest information, insights and developments in the supply of and demand for accounting students nationwide at the undergraduate and graduate levels. The 2011 edition of the survey for the 2009-10 academic year shares the opinions and experiences of CPA firm human resource officers, accounting professors and college admissions officials on the industryâ&#x20AC;&#x2122;s most pressing staffing issues. The survey focused on BA and MA degree program enrollment levels, graduation statistics, growth of degree specialties, demographic changes and recruitment trends and forecasts.

JULY/AUGUST 2011 y AZ CPA

Bigger is Better

As our member firms increase recruiting efforts this year, they rely on knowing there is a solid pool of educated recruits who are well-trained, knowledgeable and enthusiastic about their futures in accounting. The Trends report is an invaluable tool for firms to forecast and set expectations for future growth.

Hiring Levels Show Signs of a Rebound In-demand Degrees

Call 1.800.584.4595 Ext. 05 www.accountingpracticesales.com

Gary Hankins, CPA Member Arizona Society of CPAs

Behind the Scenes with ...

Nimbus Brewery in Tucson August 10 4-6 p.m.

18 AZ CPA y JULY AUGUST 2011

Join us at Nimbus Brewery in Tucson. We’ll hear from Joe Adragna, who leads Nimbus’ Marketing, and take a private tour of the Brewery, do some tasting of their finest brews and enjoy some delicious food.

Despite a still unsteady economy and its repercussions on job seekers, accounting graduates have genuine reason to be optimistic. Hiring across all segments has increased since the 2009 survey, with the hiring of BAs and MAs increasing from 25,488 to 33,321—the second highest level since the survey was launched 40 years ago. There were also strong increases in the hiring of MA graduates, reflecting the degree’s rising prominence. The number of MA hires rose from 26 percent to 37 percent, with the strongest demand for graduates with a Master’s of Accountancy. Hires of graduates with that degree rose from 75 percent to 82 percent. Although there was a decrease in the hiring of graduates with a Master’s of Taxation from 13 percent to six percent, the decrease was primarily driven by an increase in the hiring of graduates with a Master’s of Accountancy. However, the outlook for BA graduates is less optimistic, as their hiring percentage fell from 56 percent to 43 percent.

Service Area Shifts The past few years have ushered in dramatic changes for both accounting graduates and employers alike, and the types of services that are most in demand is no exception. Since the survey was last conducted in 2009, the largest change in services was an increase in hiring for “Other” roles (outside of taxation, accounting/ auditing and MIS), or most likely consulting services, which grew from 3 percent to 16 percent. In contrast, there was a measurable decrease in hiring

for taxation, which fell 10 percentage points from 35 percent to 25 percent.

VA LU E D B Y T H E C O M PA N I E S W E VA LU E

Projected Outlook Looking ahead, there is a clear indication that a rebound from challenging economic times is well underway. The survey shows that nearly 90 percent of all firms expect to hire the same or more new accounting graduates in 2011 than they did in 2010, with 71 percent of the largest firms anticipating an increase in hiring in 2011 as compared with 2010.

Key Academic Areas Make the Grade Enrollments Despite the emergence of a wide range of new degree programs at colleges and universities across the country, and waning interest in a number of once highly desirable programs, survey responses reveal robust enrollment increases at both the BA and MA accounting degree levels. In fact, combined enrollments reached more than 225,000 – the highest level since the first survey was conducted in 1971. The Master’s of Accountancy led all other degrees in terms of growth in enrollment by increasing an impressive 30 percent since the survey was last published in 2009. Looking ahead, estimates for future enrollments are fairly unpredictable; however, survey participants are generally positive. Fifty-nine percent of academic institutions predict increases in enrollments for an MBA in Accounting and 76 percent predict increases in enrollments for a Master’s in Taxation. As colleges and universities are experiencing wide-scale increases in their accounting program enrollment, capacity constraints remain a top challenge. Thirteen percent of Association to Advance Collegiate Schools of Business (AACSB)-accredited business programs each rejected an average of 165 qualified students due to capacity issues, up from 134 candidates in 2009 (a six percent increase). This increase is most likely caused by the economic conditions educational institutions currently face. It is also likely caused by the shortage

2800 N. Central Ave. Suite 1725 Phoenix, AZ 85004 602-544-3550 www.kotzinvaluation.com

Provided financial reporting valuation consulting services

Provided valuation consulting services in accordance with ASC Topic 718 and Internal Revenue Code 409A

Provided financial reporting valuation services in accordance with ASC Topic 815

Provided financial reporting valuation consulting services

Provided purchase price allocation services in accordance with ASC Topic 805

Provided valuation consulting services in accordance with ASC Topic 718 and Internal Revenue Code 409A

Provided purchase price allocation services in accordance with ASC Topic 805

ASMR CONSULTING LLC Personal Property Tax Specialists

• Arizona CPA • Over 12 years experience • We produce refunds for over 80% of new clients • Average refund is 20% of tax paid plus interest • Contingency fee only • See us on Linked In, Facebook and Twitter asmrconsulting@gmail.com www.asmrconsulting.com

(480)

204-1289

JULY/AUGUST 2011 y AZ CPA

One- and Two-Hour Seminars Quick Programs at a Minimal Cost to You

Below is a list of our upcoming one- and two-hour programs recommended by your fellow CPAs. These programs are meant to provide valuable information and insight, as well as give you an opportunity to network with other business professionals while earning CPE. Highs and Lows of the Arizona Medical Marijuana Law July 7- Phoenix —8:30 – 9:30 a.m. Webinar: Highs and Lows of the Arizona Medical Marijuana Law July 7- Phoenix —8:30 – 9:30 a.m. Long-Term Care: The Financial Wildcard July 19- Prescott—12- 1 p.m. The Basics of Executive Bonus Planning July 19- Flagstaff —12- 1 p.m. Dealing with Single Member or Small LLCs July 21- Tucson—12- 1 p.m. ASCPA Book Club: Mojo: How to Get It, How to Keep It, How to Get It Back if You Lose It by Marshall Goldsmith Aug. 2- Phoenix—11:30 a.m. – 12:30 p.m. ASCPA Book Club Webinar: Mojo: How to Get It, How to Keep It, How to Get I It Back if You Lose It by Marshall Goldsmith Aug. 2- Phoenix—11:30 a.m. – 12:30 p.m. Hiring, Firing and In Between – Arizona Employment Law in a Nutshell Aug. 11- Tucson—12 -1 p.m. Long-Term Care: The Financial Wildcard Aug. 16- Flagstaff —12 -1 p.m. Register today at our website

www.ascpa.com

and search by one- and two-hour programs.

20 AZ CPA y JULY AUGUST 2011

of academically qualified accounting professors, which is a problem that the AICPA Foundation—of accountancy and accounting education—is helping to resolve through its Accounting Doctoral Scholars Program (www.adsphd. org). The program provides funding to help CPAs with recent public accounting experience in auditing and tax obtain their doctorates.

Graduates The record-setting results for student enrollments is further bolstered by the impressive number of combined BA and MA students who graduated, which rose by 3.3 percent to 68,639 since the 2009 survey. Similar to enrollments, this number represents an all-time high since the survey was first conducted. BA degrees showed the most impressive growth at 4.2 percent to 51,036 graduates. The MA degrees experienced a more modest increase – 0.6 percent to 17,603. Interestingly, the overwhelming majority of accounting professionals (approximately 65 percent) graduated AZ CPA from public universities. Go to www.aicpa.org for more information on the AICPA’s 2011 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits and to compare the 2011 report to those of previous years.

What Does This Symbol Mean? Quick response codes are small bar codes in magazines and on brochures and signs that allow scanners in mobile devices to access data. Watch for this symbol on our upcoming brochures and other marketing materials to help direct you to more information and registration links on our website.

You get tWo doLLars in heartBurn from this cLient for everY doLLar in fees?

“Let’s taLk this through” Ron Klein, JD, CFE, VP Claims Counsel for CAMICO, discusses the risks faced by CPAs every day.

ok, ron, is this client relationship really a risk to me?

Well, let’s look at the red flags. The client has careless record-keeping practices, is late in providing information and is often non-responsive, causing you delays. What happens if the business fails or you later discover the client had been deliberately withholding information due to unethical activity. How might you be blamed? isn’t it better to fix the problem and keep the client? Sure, if you can. But at what cost to you, your staff and your firm?

But disengagement is such an unpleasant business... Not nearly as unpleasant as getting sued. Proactively managing your risk through client selection and retention is really about upgrading your client base and thus upgrading your firm.

ok, so i’m ready to disengage from this problem client. What’s the next step? Calling CAMICO is always your first step. Our risk management specialists will help you tactfully and securely end the relationship. We have dozens of sample disengagement letters and will even help you tailor your own letter to make sure all your bases are covered.

not insured by us? give camico a call, and we can start the conversation about lowering your risk – and easing your heartburn – today.

see a video of ron klein talking about how cPas can best handle disengagements at www.camico.com/disengage

ce Le B rati n g a Quarte r ce ntu rY of Pr ofe s s i onaL LiaB i LitY i n s u ran ce f or cPas Com pr e h e n s ive Cove rag e • pr oaCtive r i s k manag e m e nt r e s ou r Ce s • e x pe rt Clai m s han d li n g cam i co r e Pr e s e ntative

Larry stuckey Phone: 602.264.5533 / 800.224.2264 stuckey@stuckeyinsurance.com www.stuckeyinsurance.com

camico professional liability insurance is recommended by the Arizona Society of CPAs. at l a n ta • n e w Yo r k • s a n F r a n C i s C o BaY a r e a ca L L 8 0 0 . 6 5 2 . 1 7 7 2 o r e m a i L i n Q u i rY @ ca m i c o . c o m W W W. ca m i c o . c o m

JULY/AUGUST 2011 y AZ CPA

Classifieds Business Opportunities BUYING OR SELLING A PRACTICE? Let me make it happen for you. • Integrity • Confidentiality • 48 years selling Arizona businesses. Call Allan Jeffryes, the Jeffryes Company at (602) 279-4988. WANT TO SELL OR BUY AN ACCOUNTING PRACTICE? Make it easy on yourself. Call Gary Hankins, CPA (800) 584-4595, ext. 05. hankins@ apsleader.com. www.accountingpracticesales.com. OWN YOUR OWN TAX PRACTICE —New to Arizona. Looking for professionals interested in owning their own Tax Preparation and Financial Services practice? Easy and affordable to get started, with training and great support. You choose your location, we provide the system to attract premier clientele. Confidential. Reply to Box 100, Arizona Society of CPAs, 4801 E. Washington St., Suite 225-B, Phoenix, AZ 85034. CPA SEEKS TO PURCHASE Scottsdale Tax Practice—Successful, experienced CPA interested in purchasing existing accounting/tax practice in the Scottsdale area. Please reply to maazcpa@msn. CPA SEEKS TO ACQUIRE TAX PRACTICE.Experienced and well qualified CPA seeks to acquire central Phoenix/Scottsdale/Tempe accounting & tax practice with gross revenues between $300,000-$500,000. Please send confidential inquiries to: azcpataxpractice@gmail.com.

Employment Opportunities Full service Tucson CPA firm seeks full time accountant with five plus years of public accounting experience. BS in accounting or related field. CPA or candidate preferred. Near term partnership potential. Please send resume to hhvcpa@earthlink.net.

22 AZ CPA y JULY AUGUST 2011

TEMPE CPA FIRM seeks to replace retiring manager. 6+ years CPA firm experience required: proven client handling skills a must. Reviews, compilations, loads of tax and closely held business consulting – no audits. Our 11-member firm offers great benefits, flexibility and personal growth opportunity. Please send a resume and description of your recent experience to: tempecpa2011@gmail.com. CPA – Tax Accountant—Established Scottsdale CPA firm seeks an experienced CPA/Tax Accountant for its busy practice. Outstanding work environment and growth potential available.The office is paperless with state-of-the-art software and computer equipment, has flexible hours and work/life balance. Easily accessible from the 101 expressway. Position requires CPA license, public accounting experience, and tax preparation experience for businesses and individuals.Word, Excel and QuickBooks proficiency required; Lacerte software knowledge preferred. Masters in Tax a plus. Salary is dependent on experience. Full or part-time considered.Send resume and salary requirements to mcminnhrrecruit1@cox. net; please use Accountant as the subject on your email. CPA, AUDIT MANAGER, part time, assist with compilations and reviews in Phoenix. auditmanager2@yahoo.com. GOVERNMENTAL/NPO SPECIALISTS—Heinfeld, Meech & Co., P.C., recognized leaders in governmental and non-profit accounting and auditing, seeks ambitious and motivated individuals with at least 8 years experience specializing in governmental or nonprofit accounting and/or auditing for our offices in Phoenix, Tucson and Flagstaff. Nationally recognized on the “25 Best Small Companies to Work for in America” list for the past four years, our firm is committed to providing a superior work environment and career opportunities for our staff. Competitive salaries and benefits offered. BS in accounting and at least eight years

accounting or auditing experience specializing in governments/nonprofits required. CPA or CPA candidate preferred. Travel required Email resume and salary requirements to info@heinfeldmeech.com. Tax Manager—Established Scottsdale CPA firm seeks a Tax Manager for its busy practice. Outstanding work environment and partnership potential through client growth are available. The firm is paperless, offers state-of-the-art software and computer equipment, has flexible hours and work/life balance. Easily accessible from the 101 expressway. Position requires CPA, Masters in Tax, and 8+ years of experience in a CPA firm, including review experience. Word, Excel and QuickBooks proficiency required; Lacerte software knowledge preferred. Salary is dependent on experience. Full or part-time considered. Send resume and salary requirements to mcminnhrrecruit1@ cox.net; use Tax Manager as subject on your email.

Miscellaneous ENTREPRENEURIAL CPA NETWORK (eCPAn)—Wednesday, July 13—Tax Aspects and Reporting of Foreclosures, Short Sales and Cancellation of Debt Income —Kelly C. Mooney, Esq. Gallagher & Kennedy, P.A. Regular luncheon meetings are 11:30-1:30; all meetings located at DoubleTree Suites, 320 N. 44th St. More information at www.ecpan.org or e-mail us at info@ ecpan.org.

Office Space Broadway Village—your clients will be impressed! Office space with full kitchen in historic Broadway Village on the southwest corner of Broadway and Country Club. Newly remodeled with an inviting lobby, conference room and four separate offices. Clay Frey at (520) 795-0095 or cfrey@clayfreyfinancial.com.

CUT $$$$$$—Move into the “ACCOUNTING ANNEX”—Tenant sought. Office space to rent. Suitable for a dynamic CPA or CPA firm. Share phenomenal resources. On light rail and next to a station. Two conference rooms, included. 3,687 ft. to 4,210 ft. Unique property next to the heart of downtown, walk to baseball and basketball stadium. Short-term lease is welcome. Call Lance at (602) 741-7876 cell. PROFESSIONAL ACCOUNTING OFFICE AVAILABLE—16th Street & Glendale Avenue, 3,000 SF of prime office space now available. 8 private offices, large open bullpen for cubicles, conference, utility/workspace area, and employee break room. Email jason@ azcre.biz for more information.

CPA

Reach our Members!

MAY 2011

The Arizona Society of Certified Public Accountants

ASCPA Members Receive a Discount 403(b) Plan Sponsors

Still Having Compliance Problems New ASCPA Board Members

Marketing Financial Restructuring Services www.ascpa.com

The Arizona Society of CPAs offers a variety of ways for companies to get their name, service or product noticed by our members. Take advantage of the following avenues to increase your business:

The AZ CPA magazine — Check out our display and classified advertising opportunities. Our members read our magazine, and it’s a great way to reach CPAs. 2011 ascpa guide.qxp

North Central CPA firm as office space available for a professional interested in starting a CPA practice. We will share the tax software (ProSystems FX), use of the copier, postage meter, and fax machine. Please respond to licht@jlhcpas.com or biglou @jlhcpas.com.

Services ESTATE/GIFT/GST TAX RETURNS AND PLANNING ISSUES POSE A CHALLENGE FOR YOU? I can work with you or your client. Estate planning/ compliance is not a science; it’s an art. Let’s make a better plan for your client. Ira Feldman, CPA/CVA/CEP (602) 8505101 or ira@felco.biz or www.felco.biz. IRS AUDITS squeezing your practice? Wondering how to find time for the paperwork and follow up? I can help. AZ CPA with 30+ years’ experience. IRS Audits and Appeals are my specialty. Please visit cpatocpa.com.

3/24/2011

7:54 PM

Page 1

The CPE Resource Catalog — The CPE Resource Catalog is published once a year and is a great way to keep your name in front of CPAs all year long. Sponsorships — The Arizona Society of CPAs offers a variety of opportunities to sponsor events. We provide sponsorships of our 10 conferences with exhibit space so you can meet our members face-to-face. We offer exhibit space, break and luncheon sponsorship at all our conferences. Other opportunities include sponsorship of our Annual Meeting, networking events such as CPAs on Tour and Building Your Connections and many other special events throughout the year. Website Advertising — Advertisers can reach our members via our website. CPAs use the website to find and register for seminars, view our calendar of events, use our list serves, look for job opportunities, and read our online publications. Banner advertising can offer direct links to your website and our professional listings offer year-long coverage for advertisers. Electronic Communications — We offer one exclusive sponsorship of the ASCPA Enews, our monthly Enewsletter, and sponsorships of our CPE Enewsletter as well.

Call José Herrera at (602)324-4741 or e-mail: advertise@ascpa.com

JULY/AUGUST 2011 y AZ CPA

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

Arizona Society of Certified Public Accountants 4801 E. Washington St., Suite 225-B Phoenix, AZ 85034

ADDRESS SERVICE REQUESTED

ASCPA Webcasts CPE where you want it ... Enjoy the convenience of live webcasts and earn CPE from the comfort of your home or office with the ASCPAâ&#x20AC;&#x2122;s new live interactive webcasts. For more information or to register, go to www.ascpa.com

24 AZ CPA y JULY AUGUST 2011