Fall 2020 - Florida CPA Today | Volume 36, Number 4 by Florida Institute of CPAs

FALL 2020 | VOLUME 36, NUMBER 4

The Importance of

DEVELOPING TALENT for the Profession Reinforced Lessons from Remote Learning

PAGE 15 How to Develop Professional Relationships in a Digital World

PAGE 18 Should my firm file protective claims in advance of the Supreme Court Decision on ACA?

PAGE 20 Web Digest: Levels of Value Are Changing

EVER FEEL LIKE YOU CAN’T FIND THE RIGHT

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Investment Advisory Services offered through Retirement Wealth Advisors, LLC (RWA), an SEC Registered Investment Advisor. Juniper Wealth Management, CPA Joint Venture and RWA are not affiliated. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

CONTENTS SECRETARY, TREASURER, COO Donna M. Son, IOM EDITORIAL COMMITTEE David J. Hochsprung, CPA, chair Joel M. DiCicco, CPA Lynda M. Dennis, CPA Jonathan S. Ingber, CPA Doug Keith, CPA Michael S. Kridel, CPA Troy Y. Manning, CPA Ryan A. Myers, CPA Will Quilliam, CPA All articles submitted to Florida CPA Today are subject to technical review, Editorial Committee review, space availability, and editing requirements and restrictions. Florida CPA Today publishes letters to the editor in its Members’ Forum. For information about the guidelines, visit ficpa.org/letterstoeditor. Statements expressed herein are those of the identified authors and not necessarily those of the Florida Institute of Certified Public Accountants, Inc. (FICPA), nor should statements be considered endorsements of products, procedures or otherwise. The FICPA reserves the right to reject any editorial material or paid advertising that does not meet Florida CPA Today criteria or detracts from its ethical and professional standards. Florida CPA Today is published quarterly by the Florida Institute of Certified Public Accountants, Inc., 3800 Esplanade Way, Suite 210, Tallahassee, FL 32311. Telephone: (850) 224-2727 or (800) 342-3197. Visit our website at ficpa.org. This magazine is provided to members of the FICPA. No specific amount of your dues, either expressed or implied, is for this publication. This magazine is not available for purchase by either FICPA members or nonmembers. For display advertising information, contact the FICPA Marketing Department at (850) 224-2727, Ext. 270.

COVER STORY

The Importance of Developing Talent for the Profession

FEATURES

DEPARTMENTS

How to Develop Professional Relationships in a Digital World

Should my firm file protective claims in advance of the Supreme Court Decision on ACA?

Web Digest: Levels of Value Are Changing STRATEGIC PARTNER CONTENT

Advisory Services Are Crucial to Client Success

2 4 7 30 39 40 43 44

Chief Operating Officer’s Message Chair’s Message News Briefs Staff Reports Committee Column DOR Update CPAs in the Spotlight Marketplace

Visit issuu.com/ficpa to access and download the digital version of Florida CPA Today. FALL 2020 | FLORIDA CPA TODAY

CHIEF OPERATING OFFICER’S MESSAGE

Unprecedented Year Reflects Importance of Adaptability in Work, Life As a long summer ends and fall begins, my hope is that all FICPA members and their families have been able to stay safe this year. It has been a year none of us will forget. And with its unprecedented trials and tribulations, this year has reminded us of the importance of being agile — able to change our behavior, our routines, even our entire lives — if circumstances dictate that we must. As the CPA profession evolves and grows, the AICPA and National Association of State Boards of Accountancy (NASBA) have partnered on a joint initiative — CPA Evolution. The goal is to recognize the rapidly changing skills and competencies the practice of accounting requires now and will require in the future — to “build a future-ready profession for a rapidly changing marketplace.”

DONNA SON

...This year has reminded us of the importance of being agile — able to change our behavior, our routines, even our entire lives — if circumstances dictate that we must.

NASBA and the AICPA will implement a new core + discipline CPA licensure model, with the goal of launching a new Uniform CPA Exam in 2024. The goal is to evolve how CPA licensure works to better reflect the skills and knowledge needed in the marketplace. As part of the initiative, NASBA leadership, in collaboration with the AICPA, determined the Uniform Accountancy Act Model Rules governing educational requirements for licensure should be updated to create consistency and incorporate subjects and skills reflective of the evolving profession. The AICPA Board of Directors endorsed the changes and NASBA exposed them for public comment through Aug. 31, 2020. You can find the exposure draft at evolutionofcpa.org. In September, in keeping with the growth and expansion of the profession, the AICPA and CPA.com launched the profession’s new Internet domain — .cpa. The restricted domain was developed exclusively for CPAs. .cpa protects your clients and your firm, and can give your firm a competitive advantage. The early application period is now available to licensed CPA firms – and, beginning next year, individual CPAs are able to register for the domain. The new domain allows better, more focused branding; provides increased security and resistance to Internet fraud; promotes trust in firms’ online interactions; and demonstrates firms are progressive and professional in the digital sphere. A recent Ponemon Institute survey found 57% of small businesses reported instances of phishing or social engineering attacks in the past 12 months, many tied to fraudulent look-alike or spoofed domain addresses. Because CPAs handle sensitive client data, a data breach, ransomware demand or other malicious attack could be devastating. The .cpa domain is part of a global movement to improve online security. Because trust is an essential component of the profession, CPAs are early adopters of the concept of professional web domains. But they will become more and more common in business — and more recognizable to clients. Visit evolutionofcpa.org for more information about CPA Evolution. Visit domains.cpa for more information about .cpa, or to apply for the domain name. Source: evolutionofcpa.org “A new internet domain for the CPA profession: .cpa,” Erik Asgeirsson, Journal of Accountancy, Sept. 1, 2020.

FLORIDA CPA TODAY | FALL 2020

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FALL 2020 | FLORIDA CPA TODAY

CHAIR’S MESSAGE

The “New Normal:” Are We Really OK? I never dreamed I’d be writing my first column as FICPA chair — or doing anything else, for that matter — in the middle of a global pandemic. These are uncharted waters for all of us, and finding the “new normal” is a challenging and ongoing process. At my firm, we’ve gradually adjusted to working remotely. In addition to using email more than ever, we’re meeting online via Zoom and using Slack to message colleagues throughout the day. As I reflect on the changes and how they affect our processes and mindsets, I find our workdays are much easier in some ways — and in some unexpected ways, much more difficult. Flexibility, it turns out, can be a double-edged sword.

W. GORDON SPOOR II CPA, PFS, CGMA

What can your organization do to create an environment where people can come with their struggles and get the support they need?

In the world of remote work, one of the most important things we can do is to actively maintain our physical and mental health. This includes prioritizing communications with co-workers outside normal meetings — making sure all of us are checking in on our colleagues, many of whom also are close friends. In the not-so-distant past, it was easy to tell if someone was having an “off” day. But when most or all of our colleagues are working remotely, it’s difficult to know how people are really feeling. At the end of a two-year study that focused specifically on remote work, over half of an experimental remote group decided not to continue working from home 100 percent of the time. This despite the fact that they were a full-day’s-worth more productive per week, took less sick time, and were 50 percent less likely to quit than their counterparts who stayed in the office. Why did they come back to the office? They felt too isolated. Another study found people with a “best friend” at work were seven times more likely to be engaged in their jobs. Those who said they had friends at work felt more productive, stayed at their jobs longer and reported greater job satisfaction. It’s important to think about how remote work affects your team’s mental health. At my office, we regularly hold large and small Zoom meetings to check in on each other. We find doing this to intentionally stay connected makes a very big difference. What can your organization do to create an environment where people can come with their struggles and get the support they need? I’d love to know your take on this. How do you prioritize mental health while working remotely? What things do your companies do to help? Please email me at chair@ficpa.org. We all must acknowledge the downsides of remote work and do our best to help our colleagues — and friends — thrive in all areas of their lives. Sources “A 2-Year Stanford Study Shows the Astonishing Productivity Boost of Working From Home,” Scott Mautz, https://www.inc.com/scott-mautz/a-2-year-stanford-study-shows-astonishing-productivity-boost-of-working-fromhome.html. “Your Friends and Your Social Well-Being,” Tom Rath and Jim Harter, https://news.gallup.com/businessjournal/127043/ friends-social-wellbeing.aspx. “What Most Remote Companies Don’t Tell You About Remote Work: Isolation, anxiety, and depression in the remote workplace and what we’re doing about it,” Amir Salihefendic, https://blog.doist.com/remote-work-mental-health.

FLORIDA CPA TODAY | FALL 2020

WHAT’S BETTER THAN CALLING ANY TIME YOU NEED ADVICE ABOUT PRACTICE SUPPORT AND RISK MANAGEMENT?

REACHING KNOWLEDGEABLE EXPERTS. CAMICO® policyholders know that when they call us, they’ll speak directly with in-house CPAs, JDs and other experts. We have dedicated hotlines for loss prevention, tax, and accounting and auditing issues. You can call as often as you need and consult with experienced specialists — all at no additional cost. No one knows more about the profession, because we provide Professional Liability Insurance and risk management for CPAs only — it’s all we’ve done for 34 years and why more than 8,000 CPA firms insure with CAMICO. To learn about CAMICO or to receive a coverage quote, please contact Richard Bacher.

See what other CPAs say about CAMICO. Visit www.camico.com/testimonials

Accountants Professional Liability Insurance may be underwritten by CAMICO Mutual Insurance Company or through CAMICO Insurance Services by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued. ©CAMICO Services, Inc., dba CAMICO Insurance Services. All Rights Reserved.

Richard Bacher CAMICO Senior Account Executive T: 800.652.1772 Ext. 6710 E: rbacher@camico.com W: www.camico.com

FALL 2020 | FLORIDA CPA TODAY

Please contact Robert Albertini at Aon Insurance Services at 800.221.3023 or Sam Rogers at Rogers, Gunter, Vaughn Insurance at 800.893.7242 or Doug McCurry at Global Insurance Services, Inc. at 561.487.6001 today!

FLORIDA CPA TODAY | FALL 2020

Aon Insurance Services is the brand name for the brokerage and program administration operations of Affinity Insurance Services, Inc., a licensed producer in all states (TX 13695); (AR 100106022); in CA & MN, AIS Affinity Insurance Agency, Inc. (CA 0795465); in OK, AIS Affinity Insurance Services Inc.; in CA, Aon Affinity Insurance Services, Inc., (CA 0G94493), Aon Direct Insurance Administrators and Berkely Insurance Agency and in NY, AIS Affinity Insurance Agency. One or more of the CNA companies provide the products and/or services described. The information is intended to present a general overview for illustrative purposes only. It is not intended to constitute a binding contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. “CNA” is a registered trademark of CNA Financial Corporation. Certain CNA Financial Corporation subsidiaries use the “CNA” trademark in connection with insurance underwriting and claims activities. Copyright © 2020 CNA. All rights reserved. E-13935-1020 FL

LO O K AT I N S U R A N C E FROM A NEW PERSPECTIVE

Some people consider talking about insurance as exhilarating as getting a root canal. The AICPA Professional Liability Program is different. It’s your program—created and presented by subject matter experts in the accounting profession.

Our approach is educational. Consultative. Our goal is to provide CPAs with a satisfying experience when it comes to helping insure their firm, as well as protecting their reputation and livelihood. Endorsed By:

NEWS BRIEFS

IRS UPDATE

IRS approves temporary use of e-signatures for certain forms WASHINGTON – To protect the health of taxpayers and tax professionals, the Internal Revenue Service recently (irs.gov/ pub/irs-utl/osee_e_wet_signature-deviation_8_27_2020.pdf) announced that it will temporarily allow the use of digital signatures on certain forms that cannot be filed electronically.

The below list of forms is available at IRS.gov and through tax professional’s software products. These forms cannot be e-filed and generally are printed and mailed. The IRS will not specify which digital signature product tax professionals must use. There are several commercial products available.

The change will help to reduce in-person contact and lessen the risk to taxpayers and tax professionals during the COVID-19 pandemic, allowing both groups to work remotely to timely file forms.

The following forms can be submitted with digital signatures if mailed by or on Dec. 31, 2020: • Form 3115, Application for Change in Accounting Method; • Form 8832, Entity Classification Election; • Form 8802, Application for U.S. Residency Certification; • Form 1066, U.S. Income Tax Return for Real Estate Mortgage Investment Conduit; • Form 1120-RIC, U.S. Income Tax Return For Regulated Investment Companies; • Form 1120-C, U.S. Income Tax Return for Cooperative Associations; • Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts; • Form 1120-L, U.S. Life Insurance Company Income Tax Return; • Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return; and • Form 8453 series, Form 8878 series, and Form 8879 series regarding IRS e-file Signature Authorization Forms.

“We take the health and safety of the nation’s taxpayers, the tax professional community and our employees very seriously,” said IRS Commissioner Chuck Rettig. “Expanding the use of digital signatures is an important step during COVID-19 to help tax professionals. We understand the importance of digital signatures to the tax community, and we will continue to review our processes to determine where long-term actions can help reduce burden for the tax community, while appropriately balancing that with critical security and protection against identity theft and fraud.” The Form 1040, U.S. Individual Income Tax Return, already uses an electronic signature when it is filed electronically, either by using a taxpayer self-selected PIN, if self-prepared, or a tax-preparer selected PIN, if using a tax professional. More than 90% of Form 1040s are filed electronically. The IRS recommends all taxpayers consider e-filing forms this year, whenever possible, because of COVID-19.

The IRS will closely monitor this temporary option for e-signatures and determine if additional steps are needed.

IRS UPDATE

IRS to Publish Notice 2020-69

S corporations with accumulated earnings and profits | Issue Number: n-20-69

Notice 2020-69 announces the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to issue regulations addressing the application of §§ 951 and 951A of the Internal Revenue Code (Code) to certain S corporations with accumulated earnings and profits. For those S corporations electing this treatment, global intangible low-taxed income (GILTI) inclusions would create AAA.

This notice also announces the Treasury Department and the IRS intend to issue regulations addressing the treatment of qualified improvement property (QIP) under the alternative depreciation system (ADS) of § 168(g) for purposes of calculating qualified business asset investment (QBAI), for purposes of the foreign-derived intangible income (FDII) and GILTI provisions.

These rules, when issued, would implement recent clarifications enacted as part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act). All of these provisions originally were part of the 2017 Tax Cuts and Jobs Act (TCJA). Notice 2020-69 will be published in Internal Revenue Bulletin 2020-39 on Sept. 21, 2020.

FALL 2020 | FLORIDA CPA TODAY

NEWS BRIEFS

FICPA NEWS

FIRM NEWS

Apply by Oct. 31 for 2021 Horizon Award

MNMW Receives FPRA Award of Distinction

Bi-annually, the FICPA recognizes tomorrow’s leaders who are on today’s horizon. We honor these professionals through the Horizon Award. In 2019, we recognized nine young CPAs as the brightest at the forefront of our profession. The time has come to recognize more Young CPAs who are working to advance the profession, improve local economic development and better their communities. Who’s showing outstanding service to our organization and their own? Could it be you? Apply today to be identified as a change maker and thought leader of tomorrow. The deadline to submit Horizon Award nominations is Oct. 30, 2020. Applications are available at ficpa.org. FIRM NEWS

Wolcott & Associates Transitions to Aviation CPAs

Wolcott & Associates, P.A. is pleased to announce the successful transfer of ownership from its founder, Jed Wolcott, to several longtime employees. Fellow CPAs Nancy Reich, Sue Folkringa, Barry Haimowitz Owners of Aviation CPAs and company Controller Bobbi Reidy now will lead the Fort Lauderdale Executive Airport-based company, which focuses on accounting and tax services for the aviation industry. The new owners have a combined 50-year history with the firm. Mr. Wolcott established Wolcott & Associates, P.A. in 1984. The company, which now will do business as Aviation CPAs, is an aviation-dedicated CPA firm assisting clients in identifying, protecting and preserving aircraft tax deductions. Flight Tax Systems, a division of Aviation CPAs, is a web-based software designed to assist aircraft owners and tax professionals with the calculations and documentation required for preparing IRS and state tax returns. For more information about the companies, visit aviation-cpa.com or flighttaxsystems.com.

FLORIDA CPA TODAY | FALL 2020

Markham Norton Mosteller Wright & Co., P.A. (MNMW) received the Florida Public Relations Association (FPRA) Award of Distinction during the annual State Image Awards event. The award highlighted the firm’s successful public relations campaign to increase Google Review engagement. Online reviews play a significant role in building and maintaining relationships for business engagement. The MNMW marketing and public relations team recommended implementing an ongoing campaign to request and encourage reviews on individuals’ experience with the firm. FIRM NEWS

DeSantis Appoints Florida Condominium Ombudsman

Gov. Ron DeSantis recently appointed Spencer Hennings as Florida’s Condominium Ombudsman. The mission of the Office of the Condominium Ombudsman is to improve the quality of life for Florida condominium owners through prompt, professional and courteous service as a neutral, informative and accessible resource. Hennings, of Miami, was an associate at Irons Law Group, P.A. from 2019-2020. He was a real estate intern with Greenberg Traurig, LLP in 2009 and an associate attorney with Weitzner and Jonas, P.A. from 2017-2018. Hennings served as a legal intern with the Eleventh Judicial Circuit’s State Attorney’s Office in 2017 and as a judicial intern with the Eleventh Judicial Circuit Court of Florida in 2016. He earned his bachelor’s degree in philosophy from Florida State University and his juris doctorate and master’s, in law in real property development, from the University of Miami. This appointment is subject to confirmation by the Florida Legislature.

NEWS BRIEFS

FIRM NEWS

Thorsen CPA and Pribramsky & Co. Complete Merger

Geri Semi-Retires from Donna Bloomer

In North Palm Beach Florida, Tom Thorsen, CPA, PA recently merged with Pribramsky & Company, CPAs thus becoming the Firm’s 6th office throughout South Florida. Pribramsky & Co. specializes in Accounting Services, Income Tax Preparation and Attestation Steve Services. Steven Pribramsky and his staff Pribramsky are excited for the expansion into the Palm Beach area, the Firm’s home base is Key West. Pribramsky is a CPA with extensive experience in auditing, accounting, tax and business consulting matters. Pribramsky heads up the firms Forensic Accounting Team and the Income Tax preparation segment.

More than 30 years ago, Jeanette Geri joined Donna Bloomer to start a new kind of CPA firm, Bloomer & Geri. She was rewarded for her dedication to the Pensacola firm by becoming one of the industry’s first non-CPA partners.

Jeanette Geri

Geri entered semi-retirement Sept. 1, stepping away from management as firm administrator in Pensacola and focusing exclusively on client service. Geri has been instrumental in building the firm’s reputation for complex tax advisory services and community involvement. She played a key role as a partner in Bloomer & Geri’s merger with Anglin Reichmann Armstrong. For more information about the firm, visit anglincpa.com.

Put our intellectual capital to work for you Burns Nevins Wealth Management Group Robert Burns, CFP®, ChFC®, CPWA® Executive Director 3825 PGA Blvd., Floor 9 | Palm Beach Gardens, FL 33410 | 561.694.5666 robert.m.burns@jpmorgan.com

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. Chartered Financial Consultant® (“ChFC®”) are registered trademarks owned by The American College of Financial Services. Investments & Wealth Institute® (the Institute) is the owner of the certification marks CIMA, (“Certified Investment Management Analyst®) and CPWA, (Certified Private Wealth Advisor®). “J.P. Morgan Securities” is a brand name for a wealth management business conducted by JPMorgan Chase & Co (“JPMC”) and its subsidiaries worldwide. J.P. Morgan Securities offers investment products and services through J.P. Morgan Securities, LLC, member FINRA and SIPC. Bank products and services are offered by JPMorgan Chase Bank, N.A. and its bank affiliates. INVESTMENT PRODUCTS: • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE © 2020 JPMorgan Chase & Co. All rights reserved.

FALL 2020 | FLORIDA CPA TODAY

N OW V I RT UA L CPAs must know the complex issues faced by common interest realty associations to serve them well. At the annual two-day CIRA Conference, hear from regulators, attorneys, reserve specialists, and CPAs specializing in this industry.

F E AT U R E D S P E A K E R S

Serving the collective needs of neighboring property owners

November 19–20, 2020 Live, interactive conference CPE: Up to 16 Bruce Nunnally

Alfred Erdmann

F E AT U R E D TO P I C S

• Revenue Recognition Related for CIRA • Developer Turnover Accounting Issues • A&A Update Related to CIRA • Accounting for Long-term Leases • Revenue Recognition

FICPA.ORG/CIRA

National, state, and local insights into an emerging industry. DECEMBER 4, 2020 | VIRTUAL, INTERACTIVE CONFERENCE

When the Florida Legislature lifted the ban on medical cannabis in 2019, the whole industry changed. According to a recent report released by Leafly, Florida’s medical marijuana industry grew by 93% in 2019 with a total market value approaching $800 million. This growth has opened the door to investors, and is proving to be one of the most attractive markets in the country. The Florida Institute of CPAs’ Virtual Cannabis Conference will explore Florida’s medical marijuana industry and what you, as a CPA or financial professional, need to know about this unique investment opportunity. 10

FLORIDA CPA TODAY | FALL 2020

| CPE: 8

ficpa.org/cannabis-conference SPECIAL COVID-19 PRICING: $219 FICPA Members | $344 Non-Members SPONSORED BY

The Importance of

DEVELOPING TALENT for the Profession Reinforced Lessons from Remote Learning By Drs. Celina L. Jozsi, Ildiko Toth and Silviana Falcon

n the wake of the coronavirus shutdown, “students at more than 25 U.S. universities are filing lawsuits against their schools demanding partial refunds on tuition and campus fees, saying they are not getting the caliber of education they were promised. The suits reflect students’ growing frustration with online classes that schools scrambled to create as the coronavirus forced campuses across the nation to close.”1 Students argued the quality of instruction for the portion of the term that was offered online was far below the classroom experience, even if they were learning from the same professors and earning credits toward their degrees.1 The sudden remote instruction environment rekindled the discussion of the role of college in developing students beyond earning course credit. What are meaningful and robust learning experiences? Students wanted to be on campus, interacting with other students and generally absorbing the “college experience.”2 For practical majors such as accounting, understanding the comprehensive effective learning process is even more critical. Accounting entails many complex technical topics. Educators promote knowledge and intellectual curiosity by simplifying, explaining and applying the material beyond generic teaching resources provided by publishers. One can argue with rapidly changing technology and ever-expanding knowledge requirements, the first and foremost role and skill of an effective accounting educator is still to successfully “teach” complex concepts by: • breaking down highly technical issues into understandable segments • updating textbooks for impactful research and regulatory pronouncements • integrating real world applications • teaching students to truly think, recognize all aspects and consequences of an issue and interpret data to effectively propose and communicate corrective action to others at various levels

FALL 2020 | FLORIDA CPA TODAY

FREE MEMBERSHIP

FICPA Student Memberships The tools and connections you need When you become an FICPA student member, you’re part of an organization of more than 19,500 CPAs, accounting professionals and students. Our networking events, career advice, exam prep and leadership opportunities bridge the gap between the knowledge you gain in the classroom and the real-world skills you need to succeed as a CPA. FICPA student members make an impact in nearly every industry – from government, education and healthcare to Fortune 500 businesses and nonprofits.

And joining the FICPA is free for students. A career as a CPA is rewarding and meaningful. The FICPA will help you get there.

STUDENTS EDUCATORS

CPA PRACTITIONERS

FICPA + FICPA SCHOLARSHIP FOUNDATION

FICPA STUDENT MEMBER BENEFITS

•B ecome eligible for FICPA scholarships •R eceive discounts on CPA exam-prep materials •N etwork with 26 local member chapters •A ccess exclusive FICPA member publications, such as Florida CPA Today

• A ttend the Accounting Scholars Leadership Symposium or Student Track at the Florida Summit

•A ttend Student Field Day – learn what it’s like to work in the accounting field

• J oin webinars featuring speakers from newly certified CPAs to CPA review providers and Florida Board of Accountancy members

•B ecome an ambassador – be the face of FICPA on your campus and get connected to a CPA

We’d love to have you as a student member! Please visit students.ficpa.org. ______________________________ Are you, or do you know, an accounting educator who’s not yet an FICPA member? We offer complimentary memberships to all accounting educators. For more information and to join, visit ficpa.org/membership/application. 12

FLORIDA CPA TODAY | FALL 2020

Beyond immersing students in the profession’s core technical knowledge, professors can “develop” students into active participants who: • have an ignited passion to join and promote the profession • realize long-term success requires continuous active engagement with peers, professors and professionals • have a cultivated inquisitiveness for the ever-changing body of technical accounting and business knowledge The Association to Advance Collegiate Schools of Business (AACSB), the main accrediting body for business schools, assesses the alignment of the curriculum and faculty with engaged learning. In fact, educators are viewed as catalysts for innovation and as co-creators (not just suppliers) of knowledge. Therefore, a passive and reactionary curriculum is insufficient. A curriculum actively co-created with industry is pivotal to improving intellectual capital and student readiness.3 The AACSB encourages academic institutions to support faculty who serve on professional boards, such as the FICPA and forums where educators and professionals network and exchange ideas. Collaboration helps educators stay current with business trends and the real-world application of regulatory changes. Given the challenging circumstances resulting from the pandemic, more than ever, it is imperative for accounting educators to impart a passion for the profession; the importance of engagement; and a skill set that prepares students for the rigors of today’s fast-paced accounting profession. A March 25, 2019 Wall Street Journal article, “The Right Way to Choose a College,” identified as important predictors for an employee’s future success and fulfillment: professors who care and make learning exciting; mentors; and profession-related activities.4 A strong and dynamic collaboration among educators, academic institutions and partnering organizations such as the FICPA further contributes to developing the talent needed in the profession. As a critical link, accounting educators have a unique opportunity to foster interaction and shape students’ perceptions of the profession with impactful professional guest lectures and meaningful corporate visits. Academic institutions play an important part through mentoring initiatives, organized lecture programs and disseminating information about internship and job opportunities. Recognizing the importance of experiential learning to student success, many institutions now require an internship before graduation. Programs matching students with professionals who serve as mentors help students solidify their interests early in their studies and help ensure they secure a job in their desired

field. The FICPA facilitates student success in career development by offering free student memberships; networking opportunities during student nights at chapter meetings; unique leadership opportunities; and other events reinforcing the importance of the profession and becoming a CPA. According to the Gallup-Purdue study discussed in the Wall Street Journal article, a focused, co-created “challenging and dynamic curriculum that extends learning beyond the classroom, leads to successful and fulfilled employees.”4 Embodying the concept of “learn, earn and return,” FICPA members and the FICPA Scholarship Foundation work together to foster accounting students through scholarship support. Involvement in campus programs further models for students the responsibilities and rewards of the profession. Alumni are eager to retain long-term, genuine professional relationships with their professors. These relationships facilitate recruitment, offer opportunities for technical discussion and encourage feedback that enables development of curricula relevant to the profession. They satisfy an intrinsic goal of giving back and helping students achieve their dreams.

...Accounting educators, universities and partnering organizations, such as the FICPA, have a unique opportunity to co-create knowledge and be catalysts, influencers and a vital link between students and the profession — all essential to the development of future accounting talent. The FICPA Scholarship Foundation’s Scholarship Night is an excellent example of collaboration. The innovative event brings together professionals, students and educators from multiple chapters to inspire and honor scholarship recipients from local-area universities. With a focus on the FICPA’s student members as the future of the profession, the initiative truly is a model for engagement between the profession, educators and students.

In a rapidly changing and even disruptive world, and with the current pandemic and economic environment, it is impossible to predict the future. However, accounting educators, universities and partnering organizations, such as the FICPA, have a unique opportunity to co-create knowledge and be catalysts, influencers and a vital link between students and the profession — all essential to the development of future accounting talent. DR. SELINA JOZSI primarily teaches financial and cost accounting at the undergraduate and graduate levels. She retired from the University of South Florida and currently teaches at Florida Southern College. She is a frequent CPE presenter for the FICPA and other professional organizations. She has earned 20 teaching awards, including the FICPA Outstanding Accounting Educator Award, and was recognized as Tampa Bay Hispanic Woman of the Year in Education. She previously has been published in Florida CPA Today and is a trustee for the FICPA Scholarship Foundation. Last year, she was honored as the keynote speaker for the FICPA’s Tampa Bay Scholarship Night. DR. ILDIKO TOTH teaches financial accounting courses at the University of South Florida. She served as vice chair of the FICPA Relations with Accounting Educators Committee; on the FICPA’s Gulf Coast Chapter Board; as faculty liaison to the USF Accounting Circle; and as the faculty coordinator of the USF Accounting Circle CPE Conference. Dr. Toth previously has been published in Florida CPA Today and, prior to academia, was a tax practitioner in public accounting and government. DR. SILVIANA FALCON is an Assistant Professor of Business and Healthcare Administration at Florida Southern College’s Barney Barnett’s School of Business and Free Enterprise. In 2019, Dr. Falcon was awarded the Outstanding Faculty of the year and the Sam Walton Fellow of the Year for excellence in the advancement of the entrepreneurship spirit. Dr. Falcon also is a local small business owner, managing her own real estate investment corporation. As a state certified building contractor, she also manages and leads her own residential and commercial building and remodeling corporation. References 1 Collin Binkley, “Unimpressed by online classes, college students seek refunds,” https://www.yahoo.com/news/unimpressed-online-classes-college-students-045934873.html, May 4, 2020. 2 Joe Nocera, “College as We Know It Coming to an End? Don’t Bet on It,” Bloomberg Businessweek, May 22, 2020. 3 AACSB, A Collective Vision for Business Education, https://www.aacsb.edu/-/media/ aacsb/publications/research-reports/collective-vision-for-business-education.ashx?la=en&hash=79E241BD81B6F66E3B80E8744C45E176FD7C4518&_cldee=Y2xqLmFjZ3Byb2ZAZ21haWwuY29t&recipientid=lead-f161f01ef6ffea118108000d3a03faaf-768fe3c3b1e1438cade43c8532b72d46&esid=1eb40ef7-a9c1-49c6-8fde-039e06ca1d6b 4 Denise Pope, “The Right Way to Choose a College,” Wall Street Journal, March 22, 2019.

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HOW TO

Develop Professional Relationships

in a Digital World By Anthony Mongeluzo, PCS

o professional relationships still matter in the digital universe? And if they do, does their impact and importance remain at the forefront of acquiring new clients?

You might wonder why a tech guy is writing about networking in a CPA-focused magazine. My expertise on this subject rests on an unknown backstory to my company’s progress. I started the business with no employees in my parents’ spare bedroom. The year was 2000. Today, I’ve brushed past the 170-person mark in a two-story Moorestown headquarters that we own. It would be easy to say that focus, technical expertise, hard work, becoming a TV personality with an 10-plus year run as FOX-TV’s tech expert, and luck — yes, luck, the element most business people hate to acknowledge — all played a role. But there was a glue that brought these components together. That glue which is the backstory to my tech success and one that you must consider if you wish to grow your accounting practice: Networking. I can succinctly sum up my approach in three words: “Every night out.” I know it sounds like hyperbole, but as a 21-year-old, I was out virtually every night at functions, meetings, coffees, dinners, receptions, it didn’t matter. You name it, and I was there. I understand that the scale and style (no one would ever call me a wallflower) essentially fit some of the criteria for becoming a networking maven. I’ve lost count on the number of inroads — yes, gaining new clients — that I’ve achieved from all these networking events.

Before going further, you must decide on a singularly important issue. If you wish to grow your business, networking must be a component to your expansion even in this digitally connected world. There’s no way to escape it. If you’re satisfied with your current size, then you don’t have to take the plunge. You will grow modestly, if at all. The specifics that you can apply almost immediately include the following: Occam’s razor. When faced with two conflicting choices, choose the simplest. Ask yourself two simple questions: “Who do I want as clients?” and “Where can I find them?” The answers will help you home in on an organization, conference or similar vehicle to find them. The time commitment. This is the tricky one, especially if you’re not 21, unmarried and, well, free of all social encumbrances. Perhaps once a week or even twice a month is all that you are willing and able to commit. Decide on a limit and then follow it for a year. But you must commit. Is this networking stuff working? One of the most frequent questions people ask me is how long they should stick with a networking event. I normally suggest that they give every regularly scheduled networking event up to one year before making a judgment. Then it’s simple. Did you get at least one client, and what was the financial value of the business? It will allow you to calculate a cost-to-effort ratio and decide whether to continue. This is especially true if there is a fee to belong to the organization. I’m always surprised how few people use this barometer. If your networking efforts are modest relative to the time you’re willing to commit, I would consider a six-month trial. FALL 2020 | FLORIDA CPA TODAY

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Don’t sell, solve a problem. Tech people like me, and accountants like you, are fortunate. Everyone at some point has a computer-related problem. Most businesspeople, at one point or another, either have an accounting problem or, at the very least, want to run an idea past their accountant before leaping. That’s where you come in. Don’t try to close the deal the first time you meet. Let them talk about their accounting issues. Ask them about their accounting approach or their accountant. I have a client who loves his accountant. And he says so. This person is unlikely as a prospect. At an event, be polite, chat a bit, give him or her your card and move on. But when you see someone puzzled about an accounting issue or, better yet, if you see them groan when they bring up their accountant, you’re in a field of clover. Provide a solution. Even better, demonstrate the breadth of your knowledge by offering several solutions. It’ll impress them. The follow up. Every time you read about networking, the advice is to follow up and become ruthlessly adherent to this rule. Then why don’t we do it? The bottom line is that you must follow up if you promised to do so. And don’t allow three months to go by. Do it within a week, with a phone call or, even better, a short, hand-written note. For the 40-plus crowd, that still has great cachet value. Social media. No, we can’t ignore this. It’s the digital business card. Here’s the quick rundown: Facebook —You can have a personal and a business site. Twitter — Breaking news and “topics of the day.” Instagram — It favors photos and videos. I’m not sure potential clients want to see you crunching numbers. LinkedIn — Often regarded as the best for B2B. Here’s your chance to shine by strutting your accounting knowledge.

Social media. No, we can’t ignore this. It’s the digital business card. I have a friend who is a public relations expert and wrote a 250-page book on the subject. He never pitches his business. When he’s out and about, he’ll ask for a prospect’s card and send them his book. It establishes his expertise. But you don’t have to write a book. I know of a CPA who sends out year-end tax tips to her clients. She should send that same tip sheet out periodically to potential clients as her “book” and include a note. It’s selling without selling, and it’s the follow-up to your networking. It works. ANTHONY MONGELUZO is the CEO and president of the Moorestown, NJ-based information technology service firm ProComputer Service (PCS). Reprinted with permission of the New Jersey Society of CPAs. njcpa.org.

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FALL 2020 | FLORIDA CPA TODAY

Should My Firm File Protective Claims in Advance of the Supreme Court Decision on ACA? This Q&A from AICPA and the Florida Institute of CPAs can help your firmâ&#x20AC;&#x2122;s decision-making.

n March of this year, the U.S. Supreme Court (SCOTUS) announced that it will hear a case that challenges the constitutionality of the individual mandate under The Patient Protection and Affordable Care Act (ACA). (The original case, Texas v. U.S., is now docketed in the Supreme Court as California v. Texas.) It is possible that if the individual mandate is held to be unconstitutional, income taxes established under the ACA, such as the Net Investment Income Tax (NIIT), may effectively be repealed. As of this writing, the SCOTUS is scheduled to hear this case argument Nov. 10. Accordingly, any ACA-related income taxes paid in prior years, including the individual shared responsibility penalty, may be refundable if a claim for refund is filed in a timely manner. The Supreme Court did not accept the case for an expedited review, so it will be some time until the case is heard. Some practitioners are wondering if their clients should file protective claims for any years about to expire, especially since claims for the 2016 tax year were due July 15, 2020.

FLORIDA CPA TODAY | FALL 2020

The AICPA has not taken a formal position on filing a protective claim by July 15. The AICPAâ&#x20AC;&#x2122;s conversations with Tax Executive Committee, Employee Benefits TRP, and Tax Practice and Procedures Committee members who deal with the ACA helped to inform the conclusion that there is little chance of the tax being declared unconstitutional for tax years before 2019. Most national and regional CPA firms are not recommending that their clients file a protective claim. Protective claims must be filed on a reasonable basis; if the Supreme Court declares the ACA unconstitutional, it is unlikely that it would be retroactive, and therefore, protective claims filed now could be considered baseless claims. Below are some questions and answers to help determine whether filing a protective claim is the right decision for you and your clients. You can also watch this free AICPA Tax Section Odyssey Series video (aicpa.org/news/ aicpatv.6168625738001.html/p/1671478063562303462/c/ Tax-Professional) to learn more.

Why is Texas v. United States important?

The case of Texas v. United States has brought forward a discussion of protective claims that we have not had since Quality Stores. Quality Stores was the case where the issue was whether severance payments were subject to employment taxes. Texas v. US involves a case brought by several state governors challenging the constitutionality of the Affordable Care Act (ACA). The Supreme Court will hear arguments that address the constitutionality of the ACA, with a decision likely to come out next spring.

Is the possibility that the Supreme Court f inds the ACA unconstitutional retroactively back to at least 2016 reasonable?

Firms are grappling with whether they should file protective claims regarding the case. If a protective claim is filed, it must be on a reasonable basis; some firms don’t think it is reasonable that even if the Supreme Court deems the ACA unconstitutional, that it will do so retroactively to 2016. These firms believe if a claim is filed, it will likely be thrown out as baseless. Many firms are not filing claims, but there is a risk with that as well. Other firms are telling their clients to consult their attorneys. AICPA concluded that there is little chance of the tax being declared unconstitutional for tax years before 2019 (2019 is different as that is the year the 2017 Tax Cuts and Jobs Act effectively eliminated the individual health insurance penalty). Almost all national and regional CPA firms have reached the same conclusion and as such, they are not recommending that their clients go through the expense of filing a protective claim. AICPA is making the same recommendation and does not advise action.

If deemed unconstitutional, can we expect the Supreme Court to make it retroactive to 2016?

Some firms think it’s a stretch that, if deemed unconstitutional, the Supreme Court would look back retroactively to 2016. But, if it’s found unconstitutional and retroactive to 2016, then there could be a problem because the statute runs out on the 2016 tax year on July 15th. Taxpayers that paid these taxes with their 2016 federal tax returns would lose any opportunity to claim a 2016 tax refund if they don’t file a protective claim for refund.

If I decide to f ile a protective claim for my client, how do I do it?

• Include name, address, TIN, year of refund claim, dollar amount of claim and explanation to alert the IRS of the basis of the claim. • The entire copy of the originally filed return does not need to be attached; attach the first two pages, but even these aren’t required. • You will almost always have to file a perfecting claim for refund once the uncertainty is resolved. While sometimes taxpayers know the dollar amount of the claim, generally they do not. Because of the uncertainty, the IRS almost never processes, nor will they ever process, these claims. However, sometimes they do when the claim amount is clearly identified, and the protective claim can be easily processed. Generally, taxpayers must file a perfecting claim once the uncertainty is resolved. • Like any amended return, enough information must be provided so that the IRS can identify the taxpayer and understand the basis and dollar amount of the claim.

A protective claim f requently shows a dollar amount of $1. Why?

Because an amended return extends the assessment statute of limitations, but only to the extent of the dollar amount of the allowed claim; if a taxpayer indicates a dollar amount of $1, but then perfects the amended return to $10,000, the SOL will be extended, but limited to $10,000 instead of $1. With the potential refund of NII tax, the theory is that if you identify the dollar amount of the tax and the Supreme Court rules that the applicable law is unconstitutional, because there will be so many protective claims filed, the IRS will simply refund the dollar amount identified in the protective claim and the taxpayer does not have to file a second amended return to perfect the protective claim. However, the usual procedure is that once the uncertainty is removed, the taxpayer must perfect the protective claim.

While we can’t be certain, it would be a stretch for the Supreme Court to make it retroactive back to 2016. That’s why firms are saying that even if they filed protective claims, they could be considered baseless claims because the chances are slim.

FALL 2020 | FLORIDA CPA TODAY

D I G I TA L I S S U E

WEB DIGEST

Levels of Value Are Changing By C. Brett Cooper, CPA, ABV, ASA, BV/IA, BVAL, CR.FA

In the early days of business appraisal, the levels of value concept was very basic. Three levels were thought to exist until the early 1990s. Movement between the levels was accomplished via direct and indirect methods. The direct methods typically assess one term of a valuation method at a specific level of value. For example, to value a minority interest in an operating company using a discounted cash flow method, the cash flow may be assessed at the “minority” level. The indirect methods “move” the value between the conceptual levels through the use of discounts and premiums developed from empirical studies and by theoretical means. Chart 11 depicts the levels of value and the means by which to arrive at those levels, as then perceived. In the early 1990s, a challenge to the conventional theory of valuation appeared. Eric Nath postulated the publicly traded security prices represent an indication of the control value, rather than of a minority value.1 Furthermore, a challenge

Chart 1

Controlling Interest Bias Control Premium

Minority Interest Discount

Marketable Minority Interest Bias Marketability Discount

Nonmarketable Minority Interest Bias

to the type of “control” rendered by public company merger and acquisition data emerged. Appraisers recognized the amount paid in excess of enterprise value reflects value based on strategic or synergistic motivation. As a result, a fourth level of value was added to the levels of value chart, along with some revision in nomenclature. The top level of value now is referred to as “Strategic Control Value” and a new level of value is inserted between it and the Marketable

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D I G I TA L I S S U E

WEB DIGEST

Minority Value. The new level is called “Financial Control Value.” AND THEN THERE WERE FOUR

Chart 22 depicts the comparison of the Traditional levels of value chart to the Expanded and Refined levels of value chart. The Expanded and Refined section has been referred to in valuation texts published as recently as 20172, with a slight variation. In the text, the financial control level and the marketable minority level show a wider gap between them. The size of the gap is similar to the one between the Strategic and Financial control levels of value. The wide gap leads the reader to believe there is a significant difference between the financial control value and the marketable minority value. That is likely not the case. Many practitioners believe there is very little, if any, difference in the levels of value of Financial Control and of Marketable Minority in most cases. This is because the aggregate publicly traded stock price represents the control value of an entity. At the same time, the single share of the publicly traded entity is a marketable minority representation of ownership. Coupled with the theory that control premium studies provide data with synergistic motivation, and the theory makes good sense. WHAT ARE DISCOUNTS?

The concept of “discounts,” as used by the valuation profession, is a way to articulate a decrement to value. The decrement to value is due to risk that is present in an investment. The valuation profession explains, quantifies and applies risk to the methods of valuation through the use of discounts. In the real world of M&A transactions, discounts are not bargained for, nor are they negotiated. Discounts are purely a valuation concept. Decades ago, the concept of prerogatives of control was introduced to the profession. It was used to explain the payment of a premium observed in acquisition transactions of control interests of public companies. These are the transactions that underly the control premium studies. The concept of operating the acquired company differently than it was previously operated gave rise to the price paid in the transactions. The transfer of the prerogatives of control were not the cause of the premium paid. If the control premium studies include transactions involving synergistic motive, then are they proper to use to determine fair market value (“FMV”)? In most cases no, they are not. At least not to explain the discount from financial control to marketable minority. The same answer is true for the question about use in determining fair value (“FV”) for

Chart 2

TRADITIONAL

EXPANDED & REDEFINED

Control Value

Strategic Control Value

Control Premium

Minority Interest Discount

Marketable Minority Value Marketability Discount/ DLOM

Nonmarketable Minority Value

Strategic Control Premium

Financial Control Value Marketable Minority Value Marketability Discount/DLOM

Nonmarketable Minority Value Financial Control Premium

Minority Interest Discount

GAAP or under state statute. IS THE MINORITY DISCOUNT DISAPPEARING?

A number of factors drive the idea that the minority interest discount is not a valid adjustment to value. This is so when moving from the financial control level to the marketability minority level. The concept introduced by Nath began to catch on with practitioners. In addition, the realization that the control premium studies really do not measure an increase to value for simple financial control has become widespread among practitioners. A logical suggestion is developed due to the previously mentioned factors. The suggestion is the financial level of control is synonymous with the marketable minority value. If not synonymous, then nearly so. Mercer and Harms3 show a departure from the two being equal is likely, if certain criteria are present. The criteria are that the financial buyers: • Are expected to run the target better than the existing owners to generate more economic return from the same assets • Are able to grow the economic return quicker over the long term than are the existing owners • Are willing to accept a lower return than the market return • Are willing to share the expected benefits with the seller Otherwise, the financial control value is equal to the marketable minority value. Last, minority level shareholders of publicly traded companies have significant elements of control relative to financial control owners or marketable minority interests. These elements are: FALL 2020 | FLORIDA CPA TODAY

D I G I TA L I S S U E

WEB DIGEST

Control over when they enter or exit the investment • Control over receipt of pro-rata dividends paid • The expectation they will receive the benefit of economic income reinvested in the company in the form of appreciation • Expectation of a pro-rata share of the purchase price, should the company sell • Control over the holding period of the investment • Marketability of the security is present • Minority investors can express dissatisfaction with management and directors by selling their shares. Collective selling depresses share price, making the company a more attractive takeover target than it may be otherwise. This threat keeps management and boards in line and encourages them to run the companies for shareholders’ benefit. The minority interest discount, as it once was applied, is gone. The movement between the financial control level and the marketable minority level no longer should be measured by the control premium studies. The use of the control premium studies to determine the discount is incorrect as they contain strategic transactions. A decrement to value between financial control and marketable minority may exist if the factors previously mentioned are present. The factors add risk to the investment. ON WHAT IS VALUE BASED?

One may ask, “So what to do now?” The answer is back to basics. Value is based on the future economic income available to the investment, the risk of realizing it and its growth. These are the basic underpinnings of value taught in finance education. These underpinnings are the three variables in the discounted cash flow model in Chart 3. Chart 3: CF=cash flow, r=risk, g=growth

The income approach to value provides a clear example of the application of the underpinnings of value. Most appraisers understand the application of this groundwork at the enterprise level. This level of value equates to the financial control level depicted above. But, how does one move from the enterprise level of value to a marketable minority level 22

FLORIDA CPA TODAY | FALL 2020

of value without the minority interest discount? The two values may be the same, absent the four factors previously explained. Many appraisers choose to apply the direct method. The direct method means to value directly to the marketable minority level of value. This is accomplished by placing either the economic income or the capitalization rate on a minority basis. The economic income seems to be the variable of choice. Practitioners think they accomplish the task by not making certain normalization adjustments to the economic income. The argument is not to adjust for items a minority interest holder does not have the power to change. This concept grounds itself in the prerogatives of control introduced in early valuation theory. This thought process is flawed. Normalizing adjustments to remove non-recurring and non-operational items seems well accepted by most practitioners. Some practitioners do not adjust for items of expense relative to compensation and other owner discretionary expenses. The rational is that since the minority position cannot cause a change to these amounts being paid, no adjustment is warranted. With no adjustments made for these items, the economic income stream is a marketable minority stream. However, these adjustments should be made to an income stream to arrive at a marketable minority level of value. The proxy for an investment in a marketable minority position is the share of stock traded on the stock exchanges. The public shareholder expects normalized operations. Management is expected to perform. In real life, paying egregious salaries and expenses not necessary to generate revenue cause shareholders to exit the investment. The money is invested elsewhere. The trading price of a poorly run public company will reflect the lack of investor interest in it. To value a company at the marketable minority level of value is to place the economic income of the subject on a publicly traded equivalent basis. The hypothetical investor in the appraisal subject will compare the subject to publicly traded company performance when assessing their investment risk. Not adjusting for the compensation and discretionary expenses does not place the economic income on a minority basis. What it accomplishes is the economic income is not “public equivalent” in nature. When the economic income is not normalized for these items, the value is not at the marketable minority level. Without a marketable minority value, applying certain valuation concepts is inappropriate.4 Using a capitalization (discount) rate based on build up, CAPM or a guideline

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D I G I TA L I S S U E

WEB DIGEST

company analysis is inappropriate. Applying restricted stock studies in estimating a marketability discount is inappropriate. Last, by not adjusting for the compensation and discretionary items, the terminal value will be incorrectly understated. This prevents investors from realizing their proper share of the appreciation return on their investment.

well, the prospective financial picture is supportable. The final piece of the engagement is to explain it. That task should not be difficult when using the theoretical foundation of valuation â&#x20AC;&#x201C; economic income, risk and growth â&#x20AC;&#x201C; as the basis of the appraisal.

TAKE A DEEP BREATH

C. BRETT COOPER is director of the Valuation & Advisory Practice Group of Rivero, Gordimer & Company, P.A. in Tampa. He has been in the consulting arm of public accounting and with an investment banking firm for the past 20 years. Prior to his consulting career, Brett practiced in the tax and audit functions of regional-sized accounting firms and as the CFO of a manufacturing concern. He has worked with numerous industries in the Southeastern U.S.

What does all of this mean? Simply put, the minority interest discount as many practitioners know it has all but disappeared. The levels of value chart, from which practitioners view the levels of value, has changed. The refined levels of value chart presented earlier indicates the strategic control level is present. The control premium studies no longer provide evidence from which to determine a minority interest discount. They provide evidence to move from a strategic level of control to a financial level of control. The financial level of control is equal to the marketable minority level of control unless certain criteria are present. Any difference in the value of those two levels is due to the acquirerâ&#x20AC;&#x2122;s plan to run the company better than the seller. A valuation following the basic theories of finance should produce an estimate of value that is supportable. The appropriate adjustments to the economic income stream should be made to place it on a public company equivalent basis. Value the enterprise applying the theory on which value is based: economic income, risk and growth are the factors. Recognize the public guideline company multiples will produce a financial control value. The financial control value will equal the marketable minority value in most cases. A side note: be careful when applying the guideline transaction method as those transactions may contain strategic transactions. The next step is to adjust the financial control/marketable minority value to that of a non-marketable investment. Many theories and studies purport to provide a method by which to quantify the adjustment for the lack of marketability. But, why should the next step in the valuation process be any different from those taken thus far? Adjust the financial control/marketable minority value to non-marketable by applying financial theory based on economic income, risk and growth. Why not equate the entire valuation analysis to the theoretical underpinnings of economic income, risk and growth? Valuation is a journey into the future. That frightens some people. The value estimate should be reasonable and supportable as long as the future makes sense in comparison to the past. As long as the future-looking components of the process are reasonably estimated as 24

FLORIDA CPA TODAY | FALL 2020

1 Control Premiums and Minority Interest Discounts in Private Companies, Nath, Eric, Business Valuation Review of the American Society of Appraisers, Vol. 9, No. 2, June 1990 (ericnath.com/articles/ControlPremiums.pdf) 2 Financial Valuation Applications and Models Fourth Edition, Hitchner, James (wiley.com/WileyCDA/WileyTitle/productCd-1119286603.html), 2017, PP 382-383. 3 Business Valuation: An Integrated Theory, October 2007, (chrismercer.net/store/business-valuation-integrated-theory/) 4 Normalizing Adjustments to the Income Statement, Mercer, Z. C., (mercercapital.com/article/normalizing-adjustments-to-the-income-statement)

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STRATEGIC PARTNER CONTENT

Advisory Services Are Crucial to Client Success By Liz Scott, Intuit

here are many correct explanations of the phrase “accounting advisory services,” which can make it difficult to understand and apply to our practices. The good news is you likely already provide some type of advisory, and with a few more steps, you will be on your way to creating more value for your clients and practice. Clients seek advisory services because they often can’t perform them on their own. They include value-added services clients don’t have time to do, don’t want to do or can’t do for themselves. As our clients’ accountant, we have the capacity to provide tailored advice and opinions. In addition, large advisory firms have committees, or act as a team, to render decisions or judgments on issues.

As accounting professionals, most of us have seen businesses succeed and fail. By offering our expertise and providing guidance, we can help clients in one or more specific situations. LAY THE FOUNDATION FOR ADVISORY SERVICES

Advisory services can be divided into several buckets that help define the roles each of these advisors perform for small business owners. Small business owners seek our support. As their existing trusted source, it’s a natural progression to start providing council, and this is where many of us are providing “advisory” without the official title. Sharing financial information can feel like being exposed. Small business owners

who don’t fully understand their business’ numbers feel uncomfortable and vulnerable. Advisory starts by building trust and understanding. The mark of a good coach is actively listening and gathering as much information as possible to understand their situation and goals. From there, advice often is instinctive, and it’s vital to trust your gut when giving a response. Knowing the positive impact you can have, your role is to help your clients understand you’re the go-to source for answers and advice. Don’t let them rely on searching Google for answers. It’s scary and sad how easily they can be misled or even led away by someone else’s free advice. Here are some tips to reinforce your role:

FALL 2020 | FLORIDA CPA TODAY

Offer advice. As an advisor, your words carry authority. Business owners often feel in the dark when trying to navigate their financials. One way you can help is to filter out the noise and focus on the information most relevant to their situation. When you provide information from this position of authority, your clients will feel greater confidence. Coach your clients. The accounting profession often doesn’t provide the coaching clients so desperately require. Small business owners find themselves paralyzed with indecision because they lack confidence in their financial knowledge. Frequently, business owners are unsure when to purchase assets or implement investment strategies. Integral to successful coaching is providing guidance tailored to your client’s specific needs. Give a fresh perspective. If they have the time, your clients spend their days looking at one set of books. They often are set in their ways and/or in a pattern of doing things the way they always have. You can bring a fresh perspective from the outside looking in. By asking leading questions, such as why they perform tasks in a particular manner, you can help clients see things in a new light. Your job is to review existing processes and look for opportunities to apply best practices. Provide affirmation. Set realistic expectations about the timeframe in which change will occur. Like us, clients are busy and want to see instant results. It’s critically important to stay in touch, so lack of immediate success doesn’t cause them to don’t drift back to prior behavior. Coaches don’t attend just one practice and walk away — they coach for the entire season. At the very least, implement a cadence of monthly meetings to touch base with your clients. Continual communication, to help them stick to the plan and stay on track, is a crucial success factor. 28

FLORIDA CPA TODAY | FALL 2020

Knowing the positive impact you can have, your role is to help your clients understand you’re the go-to source for answers and advice. Don’t let them rely on searching Google for answers. Connect regularly. This is specifically about meeting with your client. To lay a foundation for success, business owners first must understand their own personal requirements and create successful business budgets. This can’t be accomplished without frequent meetings. So, we must shift our mindsets from completing tasks to building long-term goals and plans with our clients. Quantity equals quality when it comes to meetings. Not every session will be life changing. Coaching often is

phased in over 12 to 18 months. Improvement is realized over time, and reading financials is like reading a story. The years’ worth of bank activity tells the story of where the money came from and where it’s gone. This insight allows you to decode the narrative of clients’ financial life. Accounting advisory services may seem self-explanatory, but what specifically are these services? You’re a collaborative participant on your client’s team, and your job is to develop strategies to help grow their

company. There are many advisory services, including cash flow forecasting, revenue projections for future planning and budgets versus actual reviews. You can specialize in one or become capable in several and tailor them for your client’s needs. As a team member, your participation matters to your client. Technology enables collaboration We’re fortunate to have modern technology in our toolbox. QuickBooks® Online (quickbooks.intuit. com/accountants/products-solutions/ accounting/quickbooks-online) allows us to have live bank feeds, a shared workspace between business owners and accountants, and real-time archival access. We no longer work among stacks of paper, disconnected from our client’s day-to-day business. Combined with accountant-only features such as the Business Performance Dash-

board (firmofthefuture.com/content/ quickbooks-can-do-what-businessperformance-dashboard), we have the technical foundation to delve into accounting advisory. You’re uniquely positioned to help clients succeed As discussed, technology plays a critical role in our profession. Apps are an ever-evolving part of the technology in our platforms. QuickBooks Online allows for seamless app integration specific to your client’s needs, and there’s an app to improve nearly every business process. However, your client isn’t an app expert and likely is unaware of technology that can make their business life easier.

Today’s accountant, particularly a ProAdvisor® (quickbooks.intuit.com/ accountants/proadvisor), performs so many vital roles. I hope you see the incredible opportunity this creates to formalize your position as an advisor. With these tools at your fingertips, all that’s left to do is to choose what kind of an advisor you are and get started. LIZ SCOTT is partner in an Oklahoma Citybased firm, Accounting Lifeline, which specializes in QuickBooks training, setup, support and advisory services for small businesses. She is a member of the Intuit Trainer/Writer Network, writes blogs and course curriculum for the accounting community, and presents live training throughout the U.S. and abroad. Her primary focus is integration solutions for e-commerce and QuickBooks.

As the one person who understands your clients’ finances and processes, and the expert in relevant technology, you are uniquely positioned to modernize and transform their business.

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STAFF REPORT

FICPA SCHOLARSHIP FOUNDATION CLASS OF 2020

Foundation Congratulates 2020 Scholars, Introduces New Program

Scholarship applications for 2021 will open Jan. 1, 2021.

Kirsten Alves

Jaime Lancellot

Fernanda Andrade

Andrea Leimer

Alejandro Barnichta

Jaime Lozano

Krystal Barrios Joseph Bianco

By Laura Cutchens, director of FICPA Scholarship Foundation

Ashley Callahan

The year has been moving fast and we all have had to adapt to a new normal! Change is always a great thing to create growth for individuals and business. We have had to cancel many of our in-person events this year, but will persevere as we open new opportunities to gain support that will help us carry out our mission.

Vanessa Carluccio

We will be hosting our Orlando Golf Tournament on October 16, 2020 at Hawk’s Landing Golf Club. The Marriott has also extended a great rate to stay for only $109 with our code (Thurs. - Sun.). There is still time to sponsor, play or volunteer...sign up at ficpascholarshipfoundation.org/orlando-golf. We’re so excited to have our new Class of 2020 Scholars! Their checks have been dispersed and we’re proud to have them as part of Foundation family! Congrats to each of them. Scholarship applications for 2021 will open Jan. 1, 2021. Our annual end-of-year appeal will be released soon. I look forward to having you join this campaign so we can end 2020 with a strong shoutout to supporting our future CPAs. We have a new program available for support, our Firm/Corporate Annual Giving. Many thanks to Lawrence Chastang of Chastang & Partners for joining and committing to three years of support for the Foundation! Visit ficpascholarshipfoundation.org for more information about how your company can get involved. Keep up with all the current Foundation happenings by following us on LinkedIn, Facebook and Instagram... @ficpascholarshipfoundation. Warm regards, Laura Cutchens, Director laura@ficpa.org | ficpascholarshipfoundation.org

Ashlee Camarda

Delinger Chance Elizabeth Colvin Riley Conner Edward Coppedge Kyle Crook Austin Dahlstrom

FLORIDA CPA TODAY | FALL 2020

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FALL 2020 | FLORIDA CPA TODAY

STAFF REPORT

Golfing Fore Education By Mia Thomas, director of customized learning

It was a beautiful day Aug. 21 at Eagle Creek Golf Club Orlando as we welcomed many FICPA Scholarship Foundation trustees, their colleagues and friends for our Fifth Annual Golfing Fore Education Tournament. Golfers practiced social distancing while enjoying fun and fellowship and helping raise funds for the Mia A. Thomas Endowment. The endowment will provide a scholarship to a deserving accounting student at the University of Central Florida. Many thanks to former FICPA Scholarship Foundation Trustee Chair Brandon Perry and current Trustees Karen Vergara and Frank Morera for their assistance. So much gratitude to our committed sponsors and players as we couldnâ&#x20AC;&#x2122;t provide an amazing tournament without their support. Weâ&#x20AC;&#x2122;ll return to Eagle Creek Golf Club for the sixth annual tournament May 7, 2021, so mark your calendars now!

Photos from the August 21, 2020 Golfing Fore Education event.

90%

Ensure our profession has a seat at the table in Tallahassee.

For more than 40 years, the Florida CPA/PAC has been the voice of CPAs in the political process. Your financial contribution makes the difference in our ongoing work to support pro-CPA, pro-business candidates running for office; educate lawmakers on issues that matter to CPAs; and advocate for protection of the CPA license. MEMBERSHIP TIERS:

Trendsetter: $500 or more Pacesetter: $250 Committee of 100: $100

Sustaining: $50 Active: $25

Take action TODAY! Contribute to the CPA/PAC: ficpa.org/PACcontribute Contributions are strictly voluntary and are not deductible for federal tax purposes. The Florida CPA/PAC is an entity completely separate from the FICPA. The Florida CPA/PAC is supported solely by the voluntary contributions of members of the FICPA and others. The Florida CPA/PAC is registered as a corporation with the Florida Division of Corporations and as a Political Committee with the Florida Department of State.

FLORIDA CPA TODAY | FALL 2020

STAFF REPORT

The 2020 Elections Update By Justin Thames, director of governmental affairs

The Primary Elections held in August could be characterized as anything but conventional. But despite the pandemic’s impact on traditional campaigning and fears related to vote-by-mail access, voter turnout was extremely high with 3.9 million people participating in the Florida elections. Leading up to the elections, more than 380 candidates initially filed to run for state office and more than 250 of those qualified to compete for the 141 seats on the ballot during this year’s election cycle. Only 12 candidates were elected without opposition before Primary Election day, and only 12 others on the actual day. A remaining 119 contests will be decided in during the November General Elections. As the political arm of the CPA profession, the Florida CPA/PAC supports incumbent lawmakers and new candidates of both parties who are supportive of the profession. The Florida PAC spent the months before the first round of

elections interviewing and vetting many of the new candidates seeking state office, including hearing many FICPA members’ recommendations for particular candidates. After more than 100 new candidates were interviewed virtually throughout the state, the PAC supported 25 new candidates and 60 incumbent legislators. Of those, 82 were successful in their Primary races. Among the incumbents seeking re-election are three CPA lawmakers and FICPA members: Sen. Joe Gruters, Rep. Mike Caruso and Rep. Cyndi Stevenson. They are champions for the profession and we wish them all the best in their campaigns. The General Election will be held Tuesday, Nov. 3, and the last day to register to vote is Monday, Oct. 5. To learn more about the Florida CPA/PAC and add your voice to its efforts, visit ficpa.org/pac or contact the Governmental Affairs Department at govaffairs@ficpa.org.

Florida TaxWatch: COVID-19 Taxpayer Task Force Issue Final Report By Justin Thames, director of governmental affairs

On Aug. 20, the Florida TaxWatch released its COVID-19 Taxpayer Task Force recommendations. Several FICPA members served on the Task Force, including Chair Karen Lake, CPA of Berkowitz Pollack Brant in Fort Lauderdale. As the state’s preeminent taxpayer research and government watchdog organization, TaxWatch formed the task force with the goal of highlighting “opportunities and options to help Florida recovery and ease the burdens created by the pandemic on Florida taxpayers.” The group provided 29 recommendations for Florida policymakers to consider as the state looks to rebound from the effects of the pandemic.

These FICPA members represent the profession on the COVID-19 Taxpayer Task Force:

Karen Lake, CPA

Winston Howell, CPA

Santiago Pujals, CPA

Michael Kohner, CPA

Richard Berkowitz, CPA, Task Force Chair

To read the task force’s report, visit the TaxWatch website at floridataxwatch.org.

FALL 2020 | FLORIDA CPA TODAY

STAFF REPORT

CPAs Give Back Through Day of Service By Monica Davila, career development specialist

On Aug. 29, nearly 80 CPAs gave back to Florida communities through donations and hands-on projects during FICPA CPA Day of Service. Young CPA Committee members spearhead the annual statewide event. The FICPA extends special thanks to those who organized each of the service projects and to all the volunteers who supported the events. Please join us in May 2021 for the next CPA Day of Service. Together, we can make a difference in our local communities throughout the state. 2020 CPA DAY OF SERVICE EVENT ORGANIZERS

• Ft. Lauderdale: Gilda’s Club of South Florida Kathryn Horton, Kathryn K. Horton, CPA, PA • Hobe Sound: Boys & Girls Club of Martin County Morgan Murphy, Carr, Riggs & Ingram, CPAs & Advisors, Stuart • Jacksonville: Feeding Northeast Florida Alexandria Ventre, Florida Blue, Jacksonville • Orlando: Orlando Union Rescue Mission Hayley Smith, McDirmit Davis, Orlando • Palm City: Equine Rescue & Adoption Foundation Melissa Brandon, Mari Huff CPA, P.A. Palm City • Pembroke Park:  Feeding South Florida:  Elizabeth Jackson, RSM US LLP., Pembroke Park • Pensacola: Keep Pensacola Beautiful Megan Van Horn, Anglin Reichmann Armstrong P.C., Pensacola • Pompano Beach: Our Father’s House Soup Kitchen Mary Lou Ruderman, Mary Lou Ruderman Firm • Stuart: YMCA of the Treasure Coast Morgan Murphy, Carr, Riggs & Ingram, CPAs & Advisors, Stuart • Tampa: Hillsborough Mega Pantry Jennifer Keller, Crowe LLP, Tampa • Tallahassee: City Walk Urban Mission Katelyn Wonsock, Carr, Riggs & Ingram LLC, Tallahassee • Tallahassee: Feeding Florida Florida Institute of CPAs • West Palm Beach: Elev8Hope Cory Rubal, Caler, Donten, Levine, Cohen, Porter & Veil, P.A., West Palm Beach 34

FLORIDA CPA TODAY | FALL 2020

Photos from CPA Day of Service events across the state.

STAFF REPORT

FICPA Announces Women to Watch Award Recipients By Debra Kelly, member connections manager

The AICPA created the Women to Watch Awards to recognize outstanding women in the accounting professions. In 2010, the FICPA Women to Watch Awards were created to focus on the outstanding women who not only shape the Institute, but also the profession. The Women to Watch awards are presented in two categories: Experienced Leader and Emerging Leader. The Women to Watch Emerging Leader Award honors a woman who has made significant contributions to the profession and to her community in the early stages of her career. This year’s recipient is Kathryn Horton, CPA, CMA, CIDA, CFE.

Kathryn is an industry leader in data analytics, assurance, taxes, forensic accounting, fraud and compliance and bookkeeping services. She is an active member of the FICPA, Georgia Society of CPAs, AICPA, Institute of Management Accountants, Leadership Fort Lauderdale Alumni Group and Greater Fort Lauderdale Chamber of Commerce. She is a servant leader and speaks at conferences statewide and nationally.

Early in her career, Kathryn was a leader in the profession with data analytics, using a program called CaseWare IDEA. Her dedication to learn a skillset she predicted “would be the wave the future” held true and led to incredible professional success. In 2017, she was the youngest recipient of the North America IDEA User of Excellence Award. Kathryn has proven her results with data analytics in theory and practice, identifying fraud on numerous occasions and working as a beta tester for new data analytic software releases. As a graduate of and alumni advisor for Leadership Fort Lauderdale and the FICPA Emerging Leaders Program, she is involved with others’ professional development. She recently was selected as a member of the 2020 Florida TaxWatch Citizenship Institute.

The Experienced Leader Award recognizes a woman who has advanced to a higher level or leadership position in her profession and has more than 10 years’ accounting experience. This year’s recipient is Karen Lake, CPA.

Karen is the Associate Director of Tax Services at Berkowitz Pollack Brant Advisors + CPAs, where she has become nationally known through her work with clients, speaking engagements and authorship. She has developed resources for clients and firm members, including a SALT Helpdesk. Her six-member team continually monitors activity in major U.S. cities and all 50 states. Karen holds a leadership position in PrimeGlobal’s State and Local Tax Section and has been a member of Florida TaxWatch for two years. Her peers elected her as chair of the 2018-2020 Tax Advisory Council. Karen served on the 2018-2019 FICPA Board of Directors and has chaired various FICPA conferences, events and programs. She volunteers with Dolphin Cancer Challenge and served as a Take Stock in Children mentor for three years. She served as a Leukemia & Lymphoma Society Team in Training Team Captain, where she taught teams how to train for marathons and helped raise money to support blood cancer research and patient services. Karen is an AICPA mentor dedicated to helping female and young professionals. She also mentors several firm members who participate in BPB’s Women’s Innovative program. She has participated in the FICPA Student Field Day program and in FICPA student mentoring events at the MEGA CPE Conference. As a Distinguished Toastmaster of Toastmaster International, Karen routinely mentors individuals who are committed to improving their communication and leadership skills.

Nominations for the 2020 Women to Watch Awards will be open Dec. 1, 2020 through Jan. 15, 2021. More information will be posted to FICPA.org when it is available. Join us for next year’s award presentation during the 2021 Women’s Leadership Summit. The Summit will be held June 9-11, in conjunction with the Mega CPE Conference, at the Loew Sapphire Falls in Orlando. FALL 2020 | FLORIDA CPA TODAY

Member Savings Programs are just part of the many benefits of being a member. INSURANCE

Health Insurance

Long Term Care Insurance

Group Term Life Insurance

Auto Insurance + Umbrella (PLP) Coverage

Professional Liability Insurance

Employment Practices Liability Insurance

Long Term Disability Insurance

E N T E RTA I N M E N T & T R AV E L

T E C H N O LO GY

BUSINESS

P R O F E S S I O N A L D E V E LO P M E N T

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FLORIDA CPA TODAY | FALL 2020

While taking advantage of your member savings use #FICPAbenefit and tag the affinity partner.

STAFF REPORT

FICPA Members Rely on Shared Resources By Lynn Hepner, membership development manager

The importance of community in the face of the pandemic is understated as many of us continue to work remotely and limit our social interaction. The FICPA community goes beyond lifelong friendships and includes sheer reliance on each other for shared expertise, advocacy, leadership development and resources. We are certainly thankful that you are part of the FICPA community and hope you’re taking advantage of your membership. CPAS IN THE SPOTLIGHT

Choose a group or start your own. Currently most active: Federal Tax Group & State Tax Group. MARKETPLACE

Career resources, jobs/internships, office space, acquisitions, firms for sale and misc.

Highlight your staff to give them a sense of accomplishment.

Find a CPA Let the public know about your services, and that you’re a part of our community.

Our affinity and strategic partners offer great services, products and discounts because of the size of our community. If you’re not familiar with all we have to offer, please call Member Services or email membership@ficpa.org. We’d love to hear which services and products you’re using, or if you have a recommendation for a new one that will help our community. And it’s not all about work — check out the entertainment Member Deals each month.

FINANCIAL PLANNING

CONFERENCE

DECEMBER 11, 2020 Time: 8:00 a.m. - 4:40 p.m. Location: Virtual, Interactive

FALL 2020 | FLORIDA CPA TODAY

STAFF REPORT

FICPA Announces 2020-2021 Class of Emerging Leaders Program By Jennifer Allen, student initiative manager

FICPA takes young leaders to the next level of professional growth with enhanced leadership development experience. Tallahassee, FL – August 10, 2020: The Florida Institute of Certified Public Accountants (FICPA) is pleased to announce Class IV of its Emerging Leaders Program.The 18 individuals selected for this year’s program represent the best and brightest among the young CPA professionals across the state of Florida. The annual program is designed to strengthen and amplify the leadership skills of its Young CPA members, build a peer group network of talented and motivated CPAs, and develop the future influencers of the profession. As the situation with COVID-19 progresses, program events will be held virtually and in-person as deemed appropriate by the state of Florida. Participants will engage withthought leaders from the accounting profession, local and state elected officials, community not-for-profit champions, and leadership development experts. “[The program] gives us the opportunity to connect with each other, connect with legislative leaders in the state, and make an impact in the profession. Here, I have the opportunity to build relationships with other CPAs who are like-minded,” says a past program participant. The Emerging Leaders Program creates an environment in which young CPAs are able to engage in a dialogue about statewide and national issues impacting the profession, establish strong professional relationships, and be inspired to take the next step forward as leaders. Following the program, all participants are invited to attend this year’s Emerging Leaders Summit, designed to bring together CPAs from across the state for a three-day future-focused experience. THE FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS is the premier professional organization representing Florida’s Certified Public Accountants in the state. In addition to serving the diverse needs of its membership, its mission is to enhance its members’ competency and professionalism; support professional standards; and advocate on behalf of the profession. ficpa.org

FLORIDA CPA TODAY | SUMMER 2020

CLASS IV OF THE FICPA EMERGING LEADERS PROGRAM PENSACOLA Katherine “Katie” Byrd, Carr, Riggs & Ingram

JACKSONVILLE Eric Walton, Purvis Gray CPAs

TAMPA Corey Adams, Reilly, Fisher & Solomon, P.A. Michael Hayes. Cjn & W Taylor Kelley. Ernst & Young Sterling Searcy, Cps Investment Advisors

ORLANDO John Kramer, Withumsmith+Brown Christopher Suto, Withumsmith+Brown

FT. LAUDERDALE Nicholas Angarano, Berkowitz Pollack Brant Thomas Angelos, Juda, Eskew & Associates Pa Elizabeth Jackson, RSM Dylan Jacobson, Morrison, Brown, Argiz & Farra Lauren Passaro, Ernst & Young

MIAMI Armando Donado, White Wolf Capital, LLC Jason Landess, RSM Hanisha Launganim, Morrison, Brown, Argiz & Farra Adam McMahon, Morrison, Brown, Argiz & Farra Margaret Reach, Morrison, Brown, Argiz & Farra

COMMITTEE COLUMN

It’s an App World By David Bergstein, CPA, CITP, CGMA, Chief Innovation Officer, A David Bergstein CPA

Accountants everywhere are turning to apps to improve efficiency and workflow. I asked a couple of members of the FICPA Business Technology Committee to give me their input. “It’s all about efficiency,” Bruce Gerstenfeld, CPA, said. “I can gain on the compliance work in favor of the value-add analysis.” He suggested Receipt Bank (receipt-bank.com/ us) and Hubdoc (hubdoc.com), apps that capture and code expenses and save time. Both apps and tools work with QBO and Xero, as well as other solutions. They’re time savers when it comes to entering data. He’s also looking into Zapier (zapier.com/how-it-works), which connects apps to automate repetitive tasks, so he can focus on other work. It’s a great help when onboarding clients. Brian Hall, CPA recommends Basecamp (basecamp.com), a project management tool. It allows him to be more productive and better organized. “It’s great for group messages, group scheduling and online collaboration,” he said. He also uses Bill.com to review company bills from his cellphone. He can approve bills and ask questions or make notes about invoices, all from his phone. He also can submit expense reports and receive reimbursements quickly. Heidi Haye, CPA chimed in with a recommendation of TSheets for small business owners. “This app is amazing for employee time tracking. It even allows tracking employee time by customer and adding notes,” she stated. All of these apps typically revolve around a central platform relating to a major function a CPA performs, such as tax, audit or client accounting. Most accountants and firms choose a central tool or application, such as Thomson, Wolters Kluwer or Intuit, and build around it. Fig. 1 is a good example for client accounting services. You can put QBO, Xero, Sage, Zoho or others in the middle, then build around them. No one vendor has it all, and you should choose the best fit for your firm. If you placed tax in the middle, you typically would build out with apps such as SurePrep (corp.sureprep.com) or XCM (xcmsolutions.com), which work with all the major tax vendors. To see a complete list of apps by category that work with many vendors, check out these sites. The apps work well with many vendors. Intuit App Center (quickbooks.intuit.com/app/apps/home) Xero Marketplace (apps.xero.com/us) Accountingsoftwareworld.com

Fig. 1

Bill Payment Artificial Intelligence

Dashboards

Fetch-It

THE PROCESS

Cash Flow

Timesheets

Payroll Expense Management

I’ve been investigating apps for over four months and could list many others. Botkeeper (botkeeper.com), for example just received $25 million in Series B funding to help grow its artificial intelligence offering. Vic.ai is another up and comer, having just completed its SOC Type 1 Certification and building an A.I. learning cloud that helps humans perform better. Vic.ai integrates with all the main accounting systems. If you’re interested in improving your efficiency and productivity, search online for “best workflow solutions for accountants,” and the category you want. When you have your short list, run your choices by other members on FICPA Connect – a great app for sharing and receiving advice, according to Ellen Joseph, CPA. I hope this helps! If you’re still stressed about apps, Heidi recommends installing Calm (calm.com). It’ll help you “find your calm,” sleep more, stress less and live better. DAVID BERGSTEIN has been a practicing accountant since 1966. He has held high-level positions at the Top 3 accounting software providers and is an adjunct college professor. He has been an IRS chief and member of their speaker’s bureau. Accounting Today listed David as one of their Top 100 Most Influential People in the accounting profession in 2015 and 2017. Val Steed, CEO at K2 Enterprises, LLC, added him to his Top 15 Accounting Technology Executives of all time.

FALL 2020 | FLORIDA CPA TODAY

DOR UPDATE

Registering for and Paying Florida Taxes Online Just Got Easier By Alexandria Bickley, deputy communications director, Florida Department of Revenue

FICPA members who interact with the Florida Department of Revenue are undoubtedly familiar with the Florida Business Tax Application and the Internet Registration Application. There is good news to report on both fronts. Using feedback from taxpayers, tax practitioners, and other stakeholders, we have updated the paper registration form and streamlined the online registration process to provide a more intuitive experience and reduce the time to complete required forms. (Both are available at floridarevenue. com/taxes/registration.) NEW AND IMPROVED REGISTRATION APPLICATION FORMS

In March, the Department revised the paper registration forms and created a new form to incorporate some significant updates based on feedback from our taxpayers, tax practitioners, and Department staff. Among the improvements you’ll see:

• A revised Florida Business Tax Application (DR-1) that expands the types of identification numbers we accept to include visa numbers. If you are already registered with us, you can provide your Florida business partner number, consolidated sales and use tax filing number, or county control number. In addition, we now accept phone numbers originating from outside the United States for our out-ofcountry registrants. • A new, shortened version of the DR-1 form, the Application for Registered Businesses to Add a New Florida Location (DR-1A). Those who are already registered with us can use this form not only to add a new location, but also to add a new tax obligation. For example, if a business is already registered for sales and use tax but now needs to add gross receipts tax, it could use the DR-1A.

• An updated DR-1N form, which previously provided line-by-line instructions for completing the DR-1. The restructured DR-1N states the specific business information needed during registration and serves as a checklist to reference before completing the registration application. • The DR-1N also advises of any secondary or ancillary applications taxpayers will need to submit based on their business activities. For instance, if a business has amusement machines, is a secondhand dealer, or needs to apply for a direct pay permit or consumer certificate of exemption, then additional applications are required. AN UPDATED INTERNET REGISTRATION APPLICATION

After more than two years of planning, design, consultation, and testing, the Department launched a redesigned Internet Registration Application (IREG) this past April for businesses seeking to register for taxes in Florida. The new application puts the electronic version of the IREG more in lockstep with the paper application. Each IREG user will be required to create a profile by providing some basic information. This profile will include a user ID and password to log in. The portal now also allows users to manage their own passwords. After creating a profile, each time the user comes back to the IREG page, they will simply log in and be directed to their registration dashboard. This dashboard displays each application the user has previously submitted, the confirmation number of each application, and the date and time of submission.

FLORIDA CPA TODAY | FALL 2020

The user can click on the confirmation number to see all the information that was submitted. They can also track the progress of each application once it is submitted. The first page of the electronic application asks the applicant their reason for applying. Depending on how they answer the question, they will be presented with the traditional DR-1 application or the short application, the DR-1A. OTHER NEW FEATURES:

The IREG now populates certain user information on subsequent applications. For instance, the owner/officer information from the original application will be prepopulated each time the user begins a new application so the user can review and amend it as needed. In addition, the user can select mailing address information from the prior application; this enhancement speeds up the process a bit, as it spares the user from manually entering repetitive information throughout the application. A navigation pane appears on each page. As each section is completed, a green check mark indicator will let the applicant see their progress as they move through the application. If at any time the user wants to review or edit information in any section, they can simply click on that particular section without having to page back to get to it. A new section asks for an email address of the person who can communicate with the Department regarding the registration application. We often need to reach out to the taxpayer to obtain additional information or to clarify information on the DR-1. Typically, the best way to do that is through email. This will give us the authority to do so. We will continue to make refinements based on the feedback we receive to make the registration process a positive experience for all applicants. If you have any questions or comments about the new DR-1 or IREG, please contact us at (850) 488-6800. FALL 2020 | FLORIDA CPA TODAY

In order to support CPA firms, Wells Fargo Advisors would like to introduce our STRATEGIC PARTNERSHIP PROGRAM designed to broaden and strengthen the existing relationships you have with your clients. Your client may potentially benefit from the service of two trusted professionals while gaining access to the extensive services and resources of a full-service investment firm at no extra cost. When clients that you recommend for our professional money management services enroll in one or more of Wells Fargo Advisors investment advisory products, our Strategic Partnership offers your firm: • • •

A non-exclusive program – no commitment or obligation Compensation for client relationships Income growth potential

We welcome the opportunity to speak with you in depth about the program and the benefits it can provide to both your firm and your clients. Please contact Chris Thompson, CFP ®, CRPC ® if you have any questions about our program: 904-273-7956 or toll free 1-800-542-2370 or email Christopher.thompson@wellsfargoadvisors.com. Advisory programs are not designed for excessively traded or inactive accounts and may not be suitable for all investors. Please carefully review the Wells Fargo Advisors advisory disclosure document for a full description of our services, including fees and expenses. The minimum account size for these programs is between $25,000 and $2 million.

Investment and Insurance Products: NOT FDIC Insured

No Bank Guarantee

MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. 0819-01509

CPAS IN THE SPOTLIGHT

ORLANDO MCDIRMIT DAVIS

McDirmit Davis congratulates Rachel Brink on receiving her CPA license. Rachel holds undergraduate and master’s degrees from Florida State University. With over 13 years of experience in public accounting, Rachel is a tax senior with the firm. Congratulations, Rachel!

PALM BEACH PALM BEACH TAX INSTITUTE

Among the Palm Beach Tax Institute’s 2020-21 newly-appointed board of directors are Treasurer Paul Smyth, Paul Smyth CPA; Immediate Past President Tom Wagner, Wagner Consulting Aviation & Tax; and Member-at-Large Anthony Giacalone, HBK CPA.

MIAMI BERKOWITZ POLLACK BRANT ADVISORS + CPAS

Berkowitz Pollack Brant Advisors + CPAs has proRachel Gram Pedro L. Porras moted two firm members to associate director and three Michael Kaczka Kevin McNally to senior manager. The new associate directors are Rachel Gram, CPA; and Pedro L. Porras, CPA. The new senior managers are Michael Ina Mitskevich Kaczka, CPA, CFF and CFE; Kevin McNally, JD; and Ina Mitskevich, CPA. These individuals were part of a promotions class of 31 firm members.

MBAF

Javier Casabona, CPA has been promoted to director in the audit department at MBAF’s Miami office. He has a bachelor’s in accounting from Florida International University.

TAMPA CBIZ MHM, LLC, TAMPA BAY

CBIZ Forensic & Financial Services announces that Amanda Porupski has been appointed 2020-21 Treasure to Amanda the Board of Directors Porupski of the Hillsborough County Bar Association. She is a manager in the Forensic and Financial Services department of the CBIZ Tampa office. CBIZ congratulates Mike Lewis, CPA/ ABV/CFF and managing director of the Tampa office. Lewis is the recipient of the 2020 Alberto Romero Mike Lewis Jr. Award from the Tampa Bay Association of Collaborative Professionals (TBACP) .The annual award recognizes a TBACP member who consistently strives to demonstrate fairness, integrity and an abiding sense of responsibility to comply with the standards and professionalism rules in the practice of collaborative law. CBIZ is pleased to announce the hiring of Randall Cathell as a managing director in the Tampa Bay office. Cathell will provide Randall Cathell international tax services to both public and private companies in diverse industry groups, such as technology, manufacturing, private equity and financial services.

WARREN AVERETT, LLC

Warren Averett, LLC is pleased to welcome Rick Raleigh and Chloe Barger. Raleigh joins the team as a Manager for the Transaction Advisory Services Practice, and Barger joins as an Associate in the same division. Raleigh earned his Master of Accounting from Florida State University. Barger earned her master’s in accounting from Auburn University.

WEST PALM BEACH HBK CPAS & CONSULTANTS

Anthony J. Giacalone, CPA, has been promoted as a principal of HBK’s Florida office. He has over eleven years experience in business and individual tax consulting and compliance and other accounting client services. He was part of the team that helped launch the HBK West Palm Office two years ago. He earned his Bachelor and Master of Science degree from Florida Gulf Coast University.

TALLADEGA, AL TALLEDEGA COLLEGE

Angela Poole, Ph.D., CPA, has been named vice president for administration and finance at Talladega College in Talladega, AL. Dr. Poole will develop long and short-range strategic financial plans; direct and oversee business functions; and provide leadership and administration for the Division of Administration and Finance. As a member of Talladega’s senior executive staff, she will participate in institutional planning, policy development and problem resolution. Before joining the College, Dr. Poole served as a managing consultant for AMP Expert Solutions and as senior vice president for business affairs/CFO for Bethune-Cookman University. She has been a licensed Florida CPA since 1999. She is also a certified Business Process Reengineering and Strategic Planning Practitioner and a trained Design Think facilitator. FALL 2020 | FLORIDA CPA TODAY

MARKETPLACE

Classified Ads For information on rates and classified ad policies, visit ficpa.org/marketplace. PRACTICES WANTED FOR PURCHASE OR MERGER

OFFICE SPACE

GROWING SOUTH FLORIDA CPA FIRM looking to purchase or merge with a retirement-minded CPA in Florida. Favorable purchase terms offered with continuing employment opportunities available. Please contact Jeff Taraboulos at info@ksdt-cpa.com or (305) 670-3370.

TALLAHASSEE OFFICE SUITE AVAILABLE (1-3 rooms) includes sharing of Professionally decorated conference room and reception area with CPA. Located in Remington Green Office Park by NE Hermitage Blvd. Low traffic non-smoking Professional desired. 850-383-1041

PRACTICES FOR SALE

CENTRAL FLORIDA CPA FIRM FOR SALE: Tax Practice with approximately $115,000 in annual receipts. Metro Atlanta CPA firm for sale: Annual receipts approximately $740,000. Contact David L. Akins, CPA, Managing Broker Akins Professional Brokerage, Inc. www.akinsprofessionalbrokerage.com Email: david@akinsprofessionalbrokerage.com Telephone (toll-free): 877-277-0272

FLORIDA CPA TODAY | FALL 2020

DADELAND AREA CPA has office & cubicle available for lease in CPA suite shared by 5 independent CPAs. Ideal for starting your own practice, or downsizing. Office is furnished including filing cabinet, floor-to-ceiling windows. Conference room, kitchen, telephone, internet access included. Multi-Function Copier available. Free parking. Ronald J. Weintraub, CPA ron@ronwcpa.com (305) 598-4478

Earn CPE year- round with the FICPA's wide selection of CPE. Each year, the FICPA schedules conferences and trade shows â&#x20AC;&#x201D; especially for you, our members. Our conferences and trade shows are developed by a committee of your peers, bringing you current updates that are delivered by national and international speakers.

FICPA Offers Unbeatable CPE Opportunities

Here is a list of our upcoming courses. Find what's right for you and register online today!

SAVE THE DATE FOR THESE UPCOMING FULLY VIRTUAL EVENTS

November 19-20, 2020 Virtual, interactive event

November 19-20, 2020 Virtual, interactive conference

FICPA .ORG/SFS

FICPA .ORG/CIRA

FEDERAL TAX CONFERENCE

FINANCIAL PLANNING CONFERENCE

December 4, 2020

December 10, 2020

December 11, 2020

Virtual, interactive event

38TH ANNUAL

VALUATION, FORENSIC ACCOUNTING & LITIGATION SERVICES CONFERENCE

January 7-8, 2021 Virtual, interactive event

January 13-15, 2021 Virtual, interactive event

TO SEE ALL FICPA CONFERENCES & TO REGISTER VISIT FICPA.ORG/CONFERENCES

PRESORTED STANDARD U.S. POSTAGE

PAID

Florida Institute of Certified Public Accountants 3800 Esplanade Way, Suite 210 Tallahassee, FL 32311

Tallahassee, FL Permit No. 144

NEW EVENT REPLACING THE ACCOUNTING & BUSINESS SHOW

November 17-19, 2020

CPE: 16 hours

Virtual, interactive conference

REIMAGINING the CPA profession Three days of innovative learning held in a fully virtual setting! The FICPA Florida CPA Summit will provide cutting-edge educational programs and networking opportunities. Learn what’s new, as hot topics dominate the agenda — more than 30 sessions — many with a Florida-specific focus Visit our sponsors and exhibitors in our virtual vendor showcase

COM PL IM E N TA RY E V E N T

November 17, 2020 | TED-Style Innovation Learning Labs (4 CPE) Please join us for a complimentary series of TED talks that will kick off the Florida CPA Summit. (Registration required.) COV ID -1 9 PRIC IN G

1 Day Pass = $219 | 2 Day Pass = $438 (member rate) We are pleased to offer a significantly discounted rate during these difficult times. (Non-member fee still applies.)

LEARN MORE & REGISTER: