CPA Voice - September/October 2023

RETHINK...

your approach to ERTC with FREE resources to help CPAs assess the advantages and potential risks for their clients regarding the Employee Retention Tax Credit

MANDATES PARTIAL SUSPENSION

Resources

APPROPRIATE DOCUMENTATION

Since the roll-out of the ERTC, many CPAs have faced challenges and questions regarding the credit. Our team saw the need to educate—so we built a platform for CPAs created by experts in the industry. You won’t find content like this anywhere else.

Remediation Program

The Remediation Program is a service offered through Silicon Ledger that aims to assist businesses in reviewing their supporting documents for compliance with the IRS guidelines regarding the Employee Retention Tax Credit.

Service Includes:

• Review of your underlying documentation to assess adherence to IRS guidelines

• Review of credit calculation to assess maximization

• If necessary, a consultation with an ERTC-focused tax attorney

SILICONLEDGER.COM/REMEDIATION

SUPPLY CHAIN

What Makes Us Different

REMEDIATION

Silicon Ledger is a turn-key ERTC solution: managing the process from qualification through submission.

Silicon Ledger’s qualification process is powered by Stout. Stout has an independent process to understand and analyze the challenges and impacts that each of our clients experienced during the pandemic.

Once your business qualifies, we coordinate the preparation of your 941-X with BDO, one of the nation’s leading accounting and advisory firms.

How CPA’s Can Help Their Clients

CPA’s who have Clients with insufficient documentation: It is important to identify the proper resources and services required to properly document the Client’s position before the IRS issues the Client an Information Document Request (IDR).

CPA’s are in a unique position to bring value to their Clients by providing clarity regarding ERTC: to protect shareholders, ALL Small Businesses should have thorough documentation and clarity surrounding why their business DOES OR DOES NOT file for ERTC.

VOLUME 15 |

EDITOR

5

Jessica Salerno-Shumaker –jsalerno@ohiocpa.com

GRAPHIC DESIGN

Kyle Anderson – kanderson@ohiocpa.com

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REPRINTS

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CPA Voice is the official magazine of The Ohio Society of Certified Public Accountants. CPA Voice’s purpose is to serve as the primary news and information vehicle for the nearly 19,000 Ohio CPA members and professional affiliates. Articles are reviewed for technical accuracy. However, the materials and information contained within CPA Voice are offered as information only and not as practice, financial, accounting, legal or other professional advice. While we strive to present accurate and reliable information, The Ohio Society of CPAs makes no warranties regarding the accuracy of the information provided herein. Readers are strongly encouraged to conduct appropriate research to determine the accuracy of the information provided and to consult with an appropriate, competent professional adviser before acting on the information contained in this publication. The statements of fact, thoughts, advice and opinions expressed in CPA Voice are those of the authors alone and do not represent or imply the positions, opinions, nor endorsement of The Ohio Society of CPAs or of its publisher, editors, Board of Directors, or members. It is our policy not to knowingly accept advertising that discriminates on the basis of race, religion, gender, age or origin. The Ohio Society of CPAs reserves the right to reject paid advertising in its sole discretion. We do not necessarily endorse the resources, services or products unrelated to The Ohio Society of CPAs that may appear or be referenced within CPA Voice and make no representation or warranties about those products or services or the accuracy and claims regarding those products and services. Advertisers and their agencies assume liability for all advertisement content and responsibility for all claims resulting from such advertisements made against The Ohio Society of CPAs. The Ohio Society of CPAs does not guarantee delivery dates for CPA Voice and disclaims all warranties, express or implied, and assumes no responsibility whatsoever for damages incurred as a result of delivery delays.

CPA Voice (ISSN 0749-8284) is published six times per year by The Ohio Society of CPAs, 4249 Easton Way, Suite 150, Columbus OH 43219, 614.764.2727. Subscription price for non-members: $39.95.

Copyright © 2023 by The Ohio Society of CPAs; all rights reserved. No part of the contents of CPA Voice may be reproduced by any means or in any form, or incorporated into any information retrieval system without the written consent of CPA Voice Permission requests may be sent to the editor at the address above. While care will be given to all materials submitted for publication, we do not accept responsibility for unsolicited manuscripts, and they will not be returned unless accompanied by a self-addressed postage prepaid envelope.

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The strength in a solutions-oriented mindset

It’s not easy to begin your workday with a mountain of problems to solve, and unfortunately, it’s a feeling many of us are all too familiar with. Roadblocks and hurdles are inevitable in business, but being a professional who finds ways to fix problems and encourage progress is what will set you apart.

When big or small problems arise, I encourage you to embrace a solutions-oriented mindset. Avoid getting distracted with blaming a team member for an error or how a small part of a project isn’t quite perfect. Instead, focus on moving forward with solutions that will ultimately achieve your end goal. This might seem easier said than done, as mistakes will inevitably be made, but that’s how growth happens. This mindset will serve you well in any role, especially in leadership as you become responsible for a larger team.

At OSCPA we’re focused on providing you with the solutions you need to keep up in this ever-changing environment. From learning opportunities to pipeline progress and advocating for the profession, we take seriously our role in advancing the state of the profession.

This fall, we’re offering you plenty of solutions to choose from at our October and November Accounting Shows, MEGA Tax Conference and much more. Go to my.ohiocpa.com to learn more and register.

How will you embrace a solutions-oriented mindset? Reach out to me through my contact information to share.

Self-Assessment Exam

SCOTT D. WILEY President and CEO

SEPTEMBER | OCTOBER 2023

Product ID: #58693

Online Instructions

1. Log in to my.ohiocpa.com

2. Search "CPA Voice" and then find the appropriate exam.

3. If you're a member, click "Enroll." If you're a nonmember, click "Add to cart" and purchase the exam.

Log in to my.ohiocpa.com, look up the exam using the product ID number above and answer the 12 required questions based on content in CPA Voice

Cost

Members Free

Nonmembers $40

Exams remain available online – and may be completed for CPE – through the same month of the following calendar year.

4. On the Confirmation Page click “Go to your learning center.”

5. The exam will be available under the "Current" section. Turn off pop-up blockers, then click "Launch."

Self-Assessment Exam Results

Respondents taking the exam online receive their results immediately. Respondents who pass with a grade of 70% or better receive one hour of CPE credit in specialized knowledge, as approved by the Accountancy Board of Ohio.

Updates in CAT and Beneficial Ownership Reporting requirements

Commercial Activity Tax (CAT)

House Bill 33 enacted the first major changes to the CAT exemption amounts since its inception in 2005. For tax periods beginning in 2024, the new law exempts from CAT all taxable gross receipts of $3 million or less, and then for tax periods beginning in 2025, taxable gross receipts of $6 million or less are exempted. Businesses with taxable gross receipts exceeding the exemption amounts will pay the current existing CAT rate of 0.26% only on the excess.

The new exemptions apply to all businesses and are a substantial increase in contrast to the current exemption for taxable gross receipts of $150,000 or less, which has remained unchanged for the past 18 years. After the twoyear phase-in, nearly 90% of all Ohio-based businesses will no longer pay CAT – estimated to be 145,000 of the current 163,000 CAT payers.

Included in the Governor’s vetoes of H.B. 33 was one impacting the CAT as he struck the inflationary adjustment to those thresholds, and he also vetoed the provision enabling businesses with over $150,000 but less than $6 million in annual gross receipts to avoid filing tax returns.

As a result of these changes, the annual filing and annual minimum tax (AMT) will be eliminated effective Jan. 1, 2024. This means that while a large majority of taxpayers will not owe CAT, those taxpayers having more than $150,000 of gross receipts may need to file quarterly zerodollar tax returns UNLESS they take action to cancel their accounts.

The Ohio Department of Taxation (ODT) released its “official” guidance on August 21.

The OSCPA advocacy team continues to lead the charge to secure pro-business legislative changes at both the state and federal level. Below are some of the recent developments that will impact members or their clients.

OSCPA staff report

2024 – Taxpayers with taxable gross receipts not exceeding $3 million:

• Generally, taxpayers may cancel their account effective 12/31/2023.

• File a final return for 2023:

• For annual filers, the deadline is 5/10/2024.

• For quarterly filers, the deadline is 2/10/2024.

2025 – Taxpayers with taxable gross receipts not exceeding $6 million:

• Generally, taxpayers may cancel their account effective 12/31/2024.

• File a final return for 2024:

• For quarterly filers, the deadline is 2/10/2025.

ODT has indicated most taxpayers should cancel their accounts unless they are close to the $3 million threshold in 2024 or the $6 million threshold in 2025, for example, taxpayers who previously were close to $1 million in gross receipts typically filed quarterly instead of annually. In addition, taxpayers may not want to cancel their account if they need to file to claim a tax credit, especially refundable credits.

Ohio Society of CPAs reaches out to Congress to support delay in Beneficial Ownership Reporting requirements

OSCPA has called on federal legislators to support two bills that have been introduced – Senate bill S. 2623 and companion legislation in the House, H.R. 4035, the Protecting Small Business Information Act of 2023. This legislation would delay the start date for the Beneficial Ownership Information (BOI) reporting requirements until all required rulemaking is final, and all rules would take effect on the same date.

The BOI reporting requirement is an anti-money laundering initiative enacted through the Corporate Transparency Act (CTA) in 2021, which mandates that BOI information is reported to the Financial Crimes Enforcement Network (FinCEN).

In conjunction with the AICPA, OSCPA will continue these efforts to delay the implementation of BOI and allow for additional time for small businesses and their CPA business advisors to understand the potential impact of these often confusing reporting requirements, including steep penalties for non-compliance.

Increase your productivity with task batching

By Jenna Blackwood, financial and accounting coordinator, Boomer Consulting, Inc.

This powerful technique can help you organize projects, prioritize tasks, and maximize efficiency while helping reduce stress levels on busy days.

What is task batching?

Task batching is a time management method that involves grouping similar tasks together and completing them in one sitting. This allows you to focus more deeply on a single task, saving time and energy by eliminating the need to switch back and forth between systems and tasks.

Maybe you're wondering how much time task batching can really save. Well, a study published in the Harvard Business Review found that, on average, it takes a little over two seconds to switch from one application to another. That might not sound like much, but the average knowledge worker toggles between different applications and websites 1,200 times a day. Over a year that adds up to five work weeks, or 9% of your annual time at work.

So how would you like an extra five weeks of productive time every year?

Group related tasks

Start by gathering related tasks together. This could mean anything from responding to emails to meeting with clients to sending invoices to different elements of client engagements. Once you have a list of tasks, prioritize them according to their importance.

Use the "snooze" feature in your email

Email can become a black hole. And as much as we try to stay on top of it, you can lose a lot of time just filtering through your inbox and deciding what needs a response.

Did you know Gmail and Outlook have a snooze feature?

In Gmail, the icon looks like a clock face on the far right. In

Outlook, right-click any message you want to postpone and choose when you want the message to reappear in your inbox.

Leverage a project management tool

I've been using Asana for quite a while now but it's been a personal goal of mine to get all of my monthly, quarterly, and annual projects into Asana rather than using it strictly as a daily task list. This offers several benefits:

• I have more peace of mind knowing projects and deadlines will not fall through the cracks because I can clearly see what needs to be done and prioritize.

• It's easy to collaborate with other members of our team who are involved in those projects.

• If I need to be out of the office for an extended period of time, someone else could step in and have a holistic view of all my responsibilities and deadlines.

One note on using a project management tool: resist the urge to put ALL tasks in your project management system. If I can handle something from start to finish in a few minutes, I keep it in my email—snoozing it until a later day or time if necessary—rather than setting up a project for it in Asana. Otherwise, I might spend more time setting up the task than it would take to get it done.

Do you feel overwhelmed by your never-ending to-do list? Do you have days when it feels like there's no way to get everything done? We've all been there. But one simple change can help boost your productivity and create more capacity to take on higher-level work: task batching.

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Land the perfect professional connection

Whether you’re still basking in the glow of passing your CPA exam, a mid-level manager who needs a change, or a seasoned CFO who wants top talent, the OSCPA Career Center is your one-stop-shop to uncover rewarding careers and discover untapped talent.

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• Access videos and articles on interviewing, resume writing and more

• Get free interview coaching via email or more personalized coaching for a fee

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Don’t miss the opportunity to join thousands of your peers!

DIVERSITY, equity & inclusion

DEI is evolving: Is your company keeping up?

By Andrea Wright, CPA, partner, Johnson Lambert LLP

Like many other industries, the accounting profession has had to navigate a lot of challenges in recent years. The most obvious being the COVID-19 pandemic and the resulting hiring and retention difficulties. Though, in my opinion, maybe one of the more threatening issues, and more specific to the accounting profession, is the stagnating

CPA pipeline—a troubling trend that industry stakeholders have been warning us about for many years. The resulting talent shortage we’re now seeing is, in part, a result of national college and university accounting degree programs continuing to see declining enrollments, compounded by a decline in new candidates pursuing the CPA credential.

To attract and connect with a new generation of CPAs, firms must renew their commitments to creating a more equitable—and transparent—workplace.

According to a May 26, 2022, report from the National Student Clearinghouse Research Center, undergraduate enrollment declined 4.7% from spring 2021 to spring 2022, which follows a 4.9% decline from spring 2020 to spring 2021. This means undergraduate enrollment has now fallen by nearly 1.4 million students since the COVID-19 pandemic started (i.e., spring 2020 to spring 2022), compared to 2.6 million students over the past decade.

With the profession’s candidate pool shrinking more every day, it’s imperative for firms to use every recruiting tool available to attract the next generation of CPAs. More importantly, if firms wish to remain relevant, they need to rethink how they connect with this incoming labor force.

CONNECTING WITH A NEW GENERATION OF CPAS

One powerful way to make connections with any job candidate is to show them how the values of your organization mirror those they’re seeking. For students and young professionals, this increasingly means showing a commitment to diversity, equity, and inclusion (DEI) in the workplace.

According to a recent Monster survey, 83% of Gen Z individuals stated that an employer’s commitment to DEI plays a significant role in their decision-making process when choosing where to work. Another survey by Staffing Industry Analysts found that 75% of candidates would reconsider applying to a company if they were unsatisfied with the organization’s DEI efforts.

I think it goes without saying that firms need to consider these stats and pivot their recruiting strategies if they plan to have any sway in ushering in a new generation of CPAs. Also, it’s important to understand that Gen Z candidates don’t operate within the same rules of the generations before them. Decisions about where to work, what kind of work to pursue, and what kind of colleagues they choose to surround themselves with are largely influenced by their values around culture and diversity. Not only is Gen Z the most diverse generation within themselves, but they expect their future employers to increase the diversity of their organizations to reflect society more accurately.

EQUITY CALLS FOR PAY TRANSPARENCY

For Gen Z, a clear indication that DEI is an organizational value is a commitment to making their culture more equitable. Over the past three years, in particular, there’s been a significant increase in companies promoting their DEI and sustainability targets, goals and initiatives. It’s now common to see organizations supporting open forums, bias training, and the formation of DEI committees, among other actions, to show their employees they’re committed to cultural change and are making strides to achieve equity.

One area of historical inequity that’s garnering greater attention today is pay. Pay transparency laws have cropped up in many states. Pay scale is defined as the salary or hourly wage range that the employer reasonably expects to pay for the posted position. Notably, studies have indicated that including a pay range within a job posting has had a positive impact on reducing the gender pay gap and inequity for other marginalized groups.

While pay transparency isn’t without its challenges, firms should view it as an additional tool in their recruiting toolbox. Whether you agree with it or not, this change is coming. Firms need to adjust their perspectives and think of pay transparency not as another challenge to overcome but rather as a way to differentiate themselves and illustrate renewed commitment to the DEI initiatives they may have committed to years ago.

Simply put, employees’ DEI expectations are evolving and are playing increasingly bigger roles in guiding them toward employers. DEI is no longer simply about supporting minority employees and having conversations that provide new perspectives. Now, employers must be prepared to show top-down commitment to stated DEI and sustainability policies, with demonstrated buy-in at every level, to attract top talent.

If we’re going to help improve the CPA pipeline, it’s in our profession’s best interest to embrace incoming policy changes and use them as a catalyst for forging connections with the talent we want and need. Now more than ever, prospective employees want you to put your money where your mouth is—right now, that’s in your job descriptions.

Interested in learning more about OSCPA’s efforts to help the CPA pipeline and the talent shortage? Tune in to our podcast, The State of Business, to hear more

Reprinted with permission from the Illinois CPA Society.

Accounting and financial management in economic uncertainty

By Laura Hay, CPA, CAE, OSCPA executive vice president

rising interest rates, inflation and market instability, businesses are experiencing shifting accounting and financial management priorities.

Changing environments can significantly impact financial statements, risk management strategies and investment decisions. The CPA profession demonstrates leadership in effectively navigating complexity in accounting, reporting and financial management during periods of uncertainty.

Some rising priorities resulting from this environment include:

Cash and working capital

Organizations are renewing focus on working capital management and cash flow. After many years of low interest rate environments with essentially “free” cash, financial leaders again need to balance working capital and necessary investments in the business. Challenges may include:

• Identifying and addressing assets “trapped” on the balance sheet based on decisions made in lower interest rate environments

• Re-tightening metrics for managing receivables, inventory and payables to a “cash flow culture”

• Using technology and reporting improvements to measure KPIs and support decision-making

• Managing liquidity for necessary investments in business model changes while sustaining historic business lines

• Projecting cash flow and discount rates used in prospective financial information

• Responding to changes in cash management based on developments in the banking sector

Asset valuation and impairment

Higher interest rates and inflation may influence the fair value of assets and trigger impairment tests. Changes in estimated future costs of materials, labor and commodities may influence estimated costs of production.

Financial reporting issues include:

• Changes to inputs to valuation models

• Changes in investment asset valuations

• Changes in deferred tax asset valuations and assessments of realizability

• Changes in measurement for financial assets and estimates of credit losses

• Changes in assumptions used in the fair value measurement of derivatives, including counterparty risk or collateral value

• Changes in assessments of hedge effectiveness

• Changes in intent to hold assets to maturity

• Asset impairments, including the assessment of goodwill, property plant and equipment, right-of-use assets and net realizability of inventory

• Valuation in business combinations

Capital

Borrowing costs eligible for capitalization will likely increase. Projections may not be able to assume that capital expenditures will be equivalent to depreciation expense.

Facing

Liabilities

Rising interest rates can change the incremental borrowing rate used to measure lease liabilities.

Retirement obligations and postretirement benefits

Inflation and rising interest rates may affect cash flow, rate of return and discounting assumptions for retirement obligations and postretirement benefits.

Debt

Companies need to consider the effects of slowing economic activity and developments in the banking sector on debt and credit availability. Considerations include:

• Changes in financing arrangements

• Changes in the classification of debt

• Potential impact on debt service obligations and debt covenants

Revenue recognition

Rising interest rates may affect the assessment of the financing component of a contract, increasing the interest income or expense portion.

Currency fluctuations

Entities may need to consider the impact of highly inflationary economies, including the utility of the functional currency applied.

Disclosures

Disclosure considerations include:

• Disclosures about critical accounting policies

• Material changes in internal controls over financial reporting

• Changes to liquidity disclosures or risks

• Changes to fair value disclosures, including changes in hierarchy assessment

• Disclosure of the nature and extent of risks arising from financial instruments and related mitigation efforts

• Changes to credit agreements or debt terms

• Material changes in contracts with customers or suppliers

• Changes in terms for share-based payments

• A potentially more robust analysis of going concern

• Additional risks to be disclosed in risks and uncertainties or in risk factors that make the organization vulnerable to near-term impact, which may include:

n Changes in significant estimates

n Business concentrations

n Potential supply chain disruptions

Management’s discussion and analysis

Companies including management’s discussion and analysis should address changes in financial condition and results of operations resulting from the current economic environment, including unusual or infrequent events or significant economic changes. They should also disclose known trends or uncertainties that have or are expected

to have a material effect on results of operations, revenue, liquidity or capital resources.

Business implications

As financial managers assist organizations in maximizing resilience and staying on track toward long-term growth goals, some business considerations include:

• Re-examining contractual agreements and strategies, including lease agreements, contracts linked to floating interest rates, hedging strategies and debt agreements

• Accelerating transformation and deployment of digitization, cloud solutions, data analytics, cybersecurity, and AI

• Heightening data-driven scenario planning, in a period of more complex risk scenarios, to model potential impacts of market factors

• Prioritizing human capital investment to drive growth goals, including strategic hiring and targeted upskilling for people with specialized skill sets in analytics and insight, forecasting and scenario planning, operational efficiency and effectiveness, and risk management

• Implementing capital discipline, investing selectively

consistent with the organization’s business transformation strategy

• Revising pricing models, balancing with long-term customer demand, and incorporating inputs such as supply chain and resource risks into valuation models

• Fine-tuning compensation strategies driven on outcomes

• Integrating financial and non-financial reporting systems

During periods of rising interest rates, inflation, and market instability, CPAs lead in addressing business accounting, financial reporting and financial transformation challenges. Properly navigating these challenges is essential to maintain transparency, make informed decisions, and provide stakeholders with accurate information about an organizations’ financial health. By addressing issues related to asset

valuation, debt management, foreign operations, revenue recognition, and risk management, businesses can better weather economic uncertainty and position themselves for sustainable growth. It is crucial for organizations to stay agile and alert, seek professional advice when necessary, and maintain a proactive approach in adapting to the changing economic landscape. In a period of more complex risk scenarios, heightening data-driven scenario planning to model potential impacts of market factors.

Laura Hay, CPA, CAE, is the executive vice president of The Ohio Society of CPAs and the staff liaison to the Accounting, Auditing, Professional Ethics Committee and Peer Review Committee. She can be reached at Lhay@ohiocpa.com or 614.321.2231

THREE THINGS

1. Changing environments can significantly impact financial statements, risk management strategies and investment decisions.

2. Rising interest rates may affect the assessment of the financing component of a contract, increasing the interest income or expense portion.

3. During periods of rising interest rates, inflation, and market instability, CPAs lead in addressing business accounting, financial reporting and financial transformation challenges

The new state of work: How workplace culture is shifting and why your organization should care

By The Indiana CPA Society

“Right now we are feeling a heightened sense of ‘us versus them’ between organizations' employees and senior leadership when it comes to things like working remotely or working in the office,” said Samantha Julka, president and founder of DORIS Research, a workplace research firm based in Indianapolis.

Firms that aren’t taking note of these tensions and considering cultural shifts to their organizations are at risk of falling behind—especially when it comes to competing for a currently shrinking talent pool of future CPA professionals. Are you prepared to move toward meeting their expectations?

The new office space

There’s no way around it: the pandemic has created an awakening around whether the traditional office still has merit.

“The next five years will provide us with ample time to really dig in and prototype what the workplace of the future could be,” Julka said.

In general, employees are no longer seeing the physical space as the place where work happens, but instead a place for connection. Sure, it’s important to assess whether or not your team has access to the tech and supplies they need when working in-house. But it’s also important to examine if your space is supporting a positive and productive culture. The more the space is conducive to creating connections and giving team members opportunity to collaborate and engage with each other—both professionally and personally—the more likely your team is going to want to find themselves in the office.

But there’s no one-size-fits-all solution. “The organizations that succeed will do so by truly listening to the needs of all stakeholders involved,” Julka said. “Those that can show empathy and grace for both the needs of the organization and the needs of the people who make up the organization will achieve far greater success than their counterparts that want to battle over mandates.”

The new dress code

Dress codes have been loosening gradually through the years, even in traditionally buttoned-up industries. But Zoom calls and Teams communications over traditional face-toface have loosened expectations even more. What does this mean for the new era of working in the office?

According to the Journal of Accountancy, HR professionals in firms across the country are getting more creative with approaches to dress codes. One of the most popular tactics is the “dress for your day” policy, giving flexibility to wear more casual attire—within reason—when employees aren’t handling client-facing tasks for the day, and more appropriate dress on days when meeting with clients. Most keep a back-up ensemble on-hand at the office for surprise meetings.

It’s also important to remember client dress codes are changing, as well. Reflecting their dress code in meetings is becoming increasingly acceptable and, for some clients, preferred.

The past few years have propelled workplace culture into ever-changing territory. But even before the pandemic, generational attitudes and emerging technologies were creating pressing conversations around how workplaces function.

The new work schedule

When people have had a taste of flexibility, they’re not going to want to head back into the box.

“Over 80% of employees want a hybrid schedule, and the sweet spot for coming into the office is merely one to two days a week,” said Lindsay Boccardo, a speaker and consultant who helps companies navigate multigenerational workforces. “It is still helpful to be in person, after all. Just not at the expense of our freedom and productivity.”

A desire for work schedule flexibility isn’t new. The pandemic just pushed us to jump into a “group experiment” where we questioned our productivity without the office and, for many, the standard 9–5 schedule.

“We've known for a decade that millennials wanted flexibility in work life and location. Now the next generation in the workforce, Gen Z, can't imagine a world without it,” Boccardo said.

Gen Z will continue to demand this flexibility, and the generations behind them are likely to expect it.

“They grew up with a desk's worth of work tools in their backpacks,” Boccardo explained. They want to work not only where they want—”What does a desk really offer when my laptop can sit with me in my van by the beach?” Boccardo mused—but also when they want.

Schedule flexibility is a driving force of employee engagement, a crucial area for helping to address talent pipeline concerns. According to a recent Inc. article: “Engaged employees are both more productive and more likely to stay with you for the long term. So giving the people who work for you the flexibility to be good spouses, good parents, good partners, and good friends—as well as good employees—will benefit both you and them.”

While Gen Z and millennials, who are now approaching middle age and more likely to be juggling parenting responsibilities, are quick to embrace this flexibility, it might bring up mixed emotions for others.

“This can be uncomfortable for those of us who worked from an office for decades believing this was the only way. It can also be frustrating,” Boccardo said, especially when coming to the realization working from home could have been happening for years prior to the pandemic.

The important thing to remember? “Technology has exponentially changed and there is a new way to work that's available to all of us,” Boccardo said.

Reprinted with permission from The Indiana CPA Society.

THREE THINGS

1. The pandemic created an awakening around whether the traditional office still has merit.

2. A popular dress code approach is the “dress for your day” policy, giving flexibility to wear more casual attire—within reason.

3. Schedule flexibility is a driving force of employee engagement, a crucial area for helping to address talent pipeline concerns.

WE WALK THE TALK.

What to do if you suspect money laundering

By Jessica Salerno-Shumaker, OSCPA senior content manager

“I’ve come across quite a few CPAs and finance professionals who did not know what money laundering looked like,” said Robert Norlander, CPA. “And they were even preparing tax returns for drug dealers.”

Norlander was a special agent with the IRS Criminal Investigations Unit for more than 20 years and will present on the topic at the upcoming Ohio Accounting Shows this fall. He said that the general public might see money laundering on TV or hear about it in the news, but don’t really understand what it looks like in real life. He’s also spoken to CPAs who, unaware that their client was laundering money, instead thought “they were really great businessmen.”

When working with clients, one area that can reveal money laundering is cash deposits under $10,000. Norlander said banks are required to file a currency transaction report with the IRS if someone has received over $10,000 in cash, so receiving $9,900 can go unchecked.

A second sign of money laundering is unusual cash deposits that are not reflective of the system. An example of this would be if someone is consistently paying their rent in cash, something that is rarely done anymore.

“You may have one or two renters paying $500 to $600 depending on your clientele,” he said. “But if you're renting houses that are $2,000 or $3,000 a month and they're always paid in cash, that is probably a problem.”

While money laundering might be a well-known term when it comes to fraud, not enough accounting professionals can spot some of the telltale signs.

Businesses that seem to serve no economic purpose are also a cause for concern.

“This is a business where money comes in, money goes out, and there's no postage, no rent and no office supplies,” he said. “They don't have a brick-and-mortar location and there's no website. That doesn’t always mean it’s money laundering, but it's a key indicator that something's going on. Because no one operates a business with no overhead.”

Norlander said the awareness of money laundering hasn’t improved in recent years, and said while it might be mentioned in college courses it’s usually a very brief description that doesn’t go into enough detail.

“Not all fraud is money laundering,” he said. “But money laundering can be proceeds of fraud.”

Money laundering isn’t only dealing in cash, either. It’s helpful to be able to spot trade-based money laundering, too.

“You sell your drugs for cash, and you go to pay your supplier in Colombia,” he said. “Then you go out and you buy a bunch of sneakers. And you ship those sneakers to Columbia. Well, the sneakers are now sold for pesos. And that's how they pay for stuff. The cash never leaves the United States, only a product. It just changes from currency to shoes.”

If an auditor suspects money laundering, the first step they should take is to let the partner-in-charge or the audit committee know. If a bookkeeping business suspects one of its clients, Norlander said it’s in the best interest of the business to stop serving the client.

“Because ultimately, it puts them in the position of potentially being asked if they are helping facilitate some of that work by submitting financial statements that they suspect are not accurate,” he said.

“Not all fraud is money laundering,” he said. “But money laundering can be proceeds of fraud.”

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While spotting money laundering will likely not be an everyday occurrence for most CPAs, Norlander said it’s important for them to stay vigilant. CPAs are considered financial experts and advisers, and need to train themselves to be able to spot money laundering even if it’s not something they usually deal with.

“There needs to be awareness of what it looks like,” he said. “And if they do see it, take a supervisor, law enforcement, or drop the client. At least know that it exists and be able to recognize the signs.”

Hear more from Norlander at the upcoming Ohio Accounting Shows on Oct. 25-26 and Nov. 15-16. Register at my.ohiocpa.com

THREE THINGS

1. One area that can reveal money laundering is cash deposits under $10,000.

2. Businesses that seem to serve no economic purpose are also a cause for concern.

3. While spotting money laundering will likely not be an everyday occurrence for most CPAs, it’s important for them to stay vigilant.

Jessica Salerno-Shumaker is the senior content manager at OSCPA.

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TECHNOLOGY

Be aware of hackers when working remotely

by Randy R. Werner, J.D., LL.M./Tax, CPA

Clever hackers have many ways of exploiting accountants facing tax filing deadlines, especially when firms have outdated software, vulnerable email systems, and inattentive employees. As the sophistication of hackers and other cyber criminals increases, so do the number and types of threats and the scope of data breaches.

Cyber experts have been scrambling to provide the appropriate security for businesses employing thousands of employees working from home. With employees connecting from a variety of locations and devices, suspicious activity is difficult to monitor, creating more opportunities for hackers to launch attacks. Ransomware amounts demanded by hackers have increased with the additional threat that if not paid, the data will be exposed online.

Ransomware attacks have increased exponentially for all types of businesses and institutions, ranging from small and medium-sized entities to large organizations. For example, Michigan State University and the University of California at San Francisco have both been victimized, according to media reports. MSU opted not to pay the ransom demanded, a decision that culminated in personal information and financial documents being published online. UCSF opted to pay a $1.14 million ransom demand to recover malware-encrypted data. A cyberattack also brought Honda car manufacturing to a halt around the world.

Take action now

It is critical that companies stay diligent in following established security measures and safeguards. Remind all employees of the importance of strict adherence to security protocols and established safeguards.

Although not meant to be all-inclusive, the following basic best practice measures are extremely important and should be prioritized:

• Ensure all software has the latest security options/ patches especially for “zero day vulnerabilities.” This will help protect against malware, viruses, and hacker attacks.

• Frequently back up all important data and information offline and verify your backups. Regular offline backups (“cold backups”) reduce the likelihood that critical data is lost in the event of a cyberattack. Protect the backups in a remote or external location, outside of your network, where they are safe from ransomware that seeks out backup copies to encrypt them as well as the rest of the firm’s network and files. Periodically verify that your data backup process is working properly to assure that your data will be recoverable if a crisis occurs.

As a result of the COVID-19 pandemic, working remotely has opened new potential access points and vulnerabilities for hackers to exploit. CPA firms are already target-rich environments for identity thieves, and these new vulnerabilities exacerbate the profession’s cyber-related challenges. Now, more than ever, data security is an urgent concern for the accounting profession.

• Change and strengthen passwords frequently and make sure employees use different passwords for different products. Systems are only as secure as the passwords used to access them.

• Use multi-factor authentication. This can add an extra level of security to help prevent an account hack, especially when employees work remotely.

• Slow down to avoid becoming another “phishing scam” victim. Take the time necessary to validate suspicious or unexpected email. And do not click a link, pop-up, or attachment without first hovering your cursor over the link to display the URL to assess its legitimacy. If there is an urgent call to action, rather than clicking a link, consider a different way to validate the request, such as speaking with the sender to get verbal confirmation that the communication is legitimate, or visiting the purported sender’s URL.

• Maintain strong work-from-home cyber hygiene. Reinforce with employees the cyber protocols to be followed when working remotely (e.g., machine use restrictions, WiFi passwords, VPN, firewalls)

• Remind all employees of the importance of powering down computers when not in use. Computers are not accessible to attacks or intrusions when powered off.

Next steps — Review and update the company’s information (data) security plan

The IRS requires tax return preparers to comply with the Gramm-Leach-Bliley Act’s (“GLBA”) Safeguards Rule, which establishes minimum requirements for protecting sensitive client data. One such requirement is to have a written Information (Data) Security Plan (“ISP”), and to periodically review the effectiveness of the program and reassess the risk factors as well as any material changes to the firm’s operations.

Periodically assessing the appropriateness of your security measures and safeguards, given any changes that you may have had to your firm’s operations, as well as any changes to potential internal and external security risks, are critical steps to ensure your firm’s overall cyber preparedness. Set aside some time to review your firm’s safeguards and make changes necessary to ensure that you have the right measures in place to protect your clients’ information.

Special attention should be given to ensure that your firm continues to prioritize appropriate firm-wide cybersecurity awareness training. Your scheduled training may have been interrupted due to the pandemic, or the training may require updating to address perceived pandemic-related threats to your existing protocols and infrastructure.

In addition, review and enhance, if necessary, your firm’s incident response plan. There is no substitute for taking appropriate cybersecurity precautions, but it is also important to plan for the worst and have in place a comprehensive incident response plan.

Note that a firm’s efforts to comply with the GLBA Safeguards Rule is an organization-specific initiative. As such, CAMICO recommends that each firm work with its IT/cyber specialists and legal counsel, as appropriate, to modify and tailor the firm’s incident response plan to ensure compliance with GLBA’s Safeguards Rule and other applicable laws.

Additional Resources

Refer to the IRS website for detailed guidance at https:// www.irs.gov/identity-theft-fraud-scams/identity-theft-information-for-tax-professionals. You can also refer to the IRS Publication 4557, Safeguarding Taxpayer Data, for additional guidance. This publication details critical security measures that all tax professionals should have in place.

Randy R. Werner, J.D., LL.M./Tax, CPA, is a Loss Prevention Executive with CAMICO (www.camico.com). She responds to CAMICO loss prevention hotline inquiries and speaks to CPA groups on various topics. Werner has Big Four public accounting experience in federal and state tax as well as regional accounting firm experience. She practiced as a sole practitioner in estate planning beginning in 1984.

THREE THINGS

1.

2. Frequently

3. Periodically assess your security measures and safeguards.

Working remotely has opened new potential access points and vulnerabilities for hackers to exploit.

back up all important data and information offline and verify your backups.

MEMBERS in motion

AKRON

Melissa G. Dunham, CPA, MTax, MBA , and James B. Skakun, CPA , have been named partners at Bober Market Fedorovich.

Keith Klodnick, CPA , has been named market leader for the Ohio region at Cohen & Company.

Jason Tuma will serve as market expansion leader for northeast Ohio at Sikich.

Robert Venables has been named a tax partner at Cohen & Company.

CLEVELAND

Angela Alexander, CPA, MSA , has been named director at Barnes Wendling CPAs. Julie Lowry has been named an assurance partner at Cohen & Company.

Jacob Banker, Stephen Bastian, Ekaterina Bikuleva, Holly Blough, Shayla Cross, Matthew Davide, Kayla Johnson, Joseph Kim, and Nathan Krikke have been named seniors at HW&Co.

Miranda Bowden, CPA , Camille Ho-A-Lim, CPA, CGMA, Aseem Uppal, CPA , Bill Cope and Ankit Pandey, CPA, MBA have been named senior managers at HW&Co.

Michael Essenmacher, CPA , has been named director

of the accounting and assurance services department at Barnes Wendling CPAs.

Garet Johnston, CPA, Celia Lamb, CPA, Troy Mezera, CPA and Brittany Steinman, CPA, MBA have been named managers at HW&Co.

Clarice Kieffer has been named a staff accountant at HW&Co.

Angel Rice and Krista Zuchowski have been named tax partners at Cohen & Company.

Susan Kornatowski, CPA, JD has been hired as a senior manager at HW&Co.

COLUMBUS

Brett Cubellis, CPA , has been named shareholder at Schneider Downs & Co. Inc.

Michelle Lindsey, NP, and Megan Staley, CPA, MAcc, have been promoted to director of client service at Kaiser Consulting.

PITTSBURGH, PA

Kaitlin Mansfield has been named an assurance partner at Cohen & Company.

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THE OHIO SOCIETY OF CPAs 2023–2024 BOARD OF DIRECTORS

CHAIR OF THE BOARD

Libby Cullins, CPA, MBA JPMorgan Chase Columbus

CHAIR-ELECT

Rick Fedorovich, CPA Bober Markey Fedorovich Cleveland

PAST CHAIR

Craig Marshall, CPA Ernst & Young Plain City

VICE CHAIR, FINANCE

Jessie C. Wright, CPA, CGMA, CVA Schroedel, Scullin & Bestic, CPAs and Strategic Advisors, Canfield

DIRECTORS

PRESIDENT AND CEO

Scott D. Wiley, CAE The Ohio Society of CPAs Columbus

Brandi Carson, CPA La-Z-Boy Inc. Toledo

Courtney Clark, CPA Deloitte Columbus

Keenan Cooper, CPA Grant Thornton LLP Cincinnati

Chris Igodan Jr., CPA Nationwide Financial Columbus

Gregory J. Jonovich, CPA, MBA Materion Mayfield Heights

Angela Lewis, CPA Crowe Columbus

A’Shira Nelson, CPA Savvy Girl Money Cleveland

Carolyn Smith, CPA, MBA, CRMA Member, Governmental Accounting Standards Board Columbus

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Ellen Wisbar, CPA Mayer Hoffman McCann, P.C. Cleveland

The workforce development series is available now!

Episode title: Tackling the talent shortage

From the episode:

“There has to be a shift. The question is, how is the shift going to happen? And with the current generation retiring, and firms, in many cases, lacking strong succession plans, there's going to be a huge talent shortage. And I think the companies that address that shortage creatively, and proactively are the ones that are going to succeed.”

Alyson Fieldman, owner of consultancy firm Rock It Results

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