Insight Magazine - Fall 2011

What do you see?

A partner who works as hard as you do.

You want to make your client’s vision a reality. So we make that our goal as well. Whether we provide treasury management, financing or simply act as a sounding board, we’ll help you be part of a success story. Because when your client succeeds, you succeed.

PROUD DIAMOND SPONSOR OF THE ILLINOIS CPA SOCIETY.®

i n d e x

s departments

34 Mind the Gap

B y K r i st i n e B l en k h o r n Ro d r i g u ez

As information technology trends such as cloud computing and virtualization change the IT delivery model, CFOs are being asked to bridge the divide between systems and strategy

38 Cultural Re-invention

B y D eb o r a h La n e

Recognize a corporate culture that doesn’t work and then rebuild it

42 Failure to Launch?

B y C a r o l yn K m et How to start a business in a stalled economy

10 Tax The Audit Hour, Pt.1

B y Kei t h St a a t s, JD

Get to know how the audit process works after all, you could be next!

12 Fraud The Fox in the Henhouse

B y Brad Sargent, CPA/CFF, CFE, CFS, Cr FA , FABFA

Is that a trusted employee or unscrupulous predator lurking in your midst?

14 Retirement Goal in Sight

B y Ma r k J Gi l b er t , C PA /PF S

Six ways to help clients on their homestretch to retirement

16 Legislation The Road Ahead

B y Ma r t y Gr een , E sq

Look forward to a full fall legislative calendar

1 8 Global Business The Female Factor

B y C h r i st i n e B o c k el m a n

When doing business overseas, women are proving themselves anything but the weaker sex

22 Young Professionals Gen Knowledge

B y D er r i c k Li l l y

Understanding how employers view your generation is key to becoming a rising star in the finance world

26 Investing The Green Portfolio

B y Sel en a C h a vi s

Where do today ’ s investors stand on the issue of clean energy?

28 Image The Media-Savvy CFO

B y C l a r e Fi t zg er a l d

Do you have what it takes to be your company ’ s public spokesperson?

32 Technology There’s an App for That

B y D er r i c k Li l l y

Six great mobile applications for finance pros on the go 4

For your department to tick, each piece has to fit. We get it.

Garelli Wong and Jackson Wabash are Chicagoland’s experts in financial recruiting and staffing.

Our team unites employers with the right accounting and finance talent for direct hire, temporary and consulting assignments. We look and listen beyond the job description, to combine the right skills with the desired experience.

To learn more about our dedication to finding the perfect fit, visit us on the web or call your local office.

FIRST W O R D

I N S I G H T M A G A Z I N E

Publisher/ICPAS President & CEO Elaine Weiss

Editor-in-Chief/Director of Publications Judy Giannetto

Creative Services Director Gene Levitan

Creative Services Manager Rosa Garcia

Publications Specialist Derrick Lilly

National Sales & Advertising Angie VanGorder

YGS Group, 3650 West Market Street, York, PA 17404

P: 800 501 9571 x176 F: 717 825 2171

E: angie vangorder@theygsgroup com

Circulation/Member Services Director Carl Siska

Editorial Offices: 550 W Jackson Blvd , Suite 900 Chicago, IL 60661

I C P A S O F F I C E R S

Chairperson, Robert E Cameron, CPA Cameron, Smith & Company PC

Vice Chairperson, James P Jones, CPA Edward Don & Company

Secretary, William P Graf, CPA Deloitte & Touche LLP

Treasurer, Daniel F Rahill, CPA, JD KPMG LLP

Immediate Past Chairperson, Sara J Mikuta, CPA Wifpli LLP

I C PA S B O A R D O F D I R E C T O R S

Edward J Hannon, CPA, JD, Freeborn & Peters LLP

John A Hepp, PhD, CPA, Grant Thornton LLP

Geralyn R Hurd, CPA, Crowe Horwath LLP

Paul V Inserra, CPA, McClure, Inserra & Co , Chtd

Leif J Jensen, CPA, Leif Jensen & Associates Ltd

Kathleen M Kedrowski, CPA, Navigant Consulting

Michael J Maffei, CPA, GATX Corp

Elizabeth A Murphy, PhD, CPA, DePaul University

Michael J Pierce, CPA, RSM McGladrey Inc

J Bradley Sargent, CPA, Sargent Consulting Group LLC

Edward H Stassen, CPA, Golden County Food Holdings Inc

Reva B Steinberg, CPA, BDO USA LLP – Retired Consultant

Thomas L. Zeller, PhD, CPA, Loyola University of Chicago

The world is a rapidly changing place Cell phones are now smart phones. Laptops have morphed into iPads and email is “so yesterday ” Now we text and tweet (God help us if we have something to say that’s more than 140 characters.)

C l o u d c o m p u t i n g h a s l a n d e d o n o u r d o o r s t e p s a n d i t ’s here to stay.

Our world is also a global community The call center you contact is based in India. The manufacturing job once stamped “Made in the USA” now comes from Asia The European debt crisis impacts Wall Street. The debt ceiling debate in the U S Congress creates havoc in the Asian markets

The rapid changes and complexity of living in a global world can be a little overwhelming when it comes to navigating your professional life New technologies and global connections sometimes require a little navigational assistance.

That’s where I hope the ICPAS can be your professional GPS We are there to help you recalculate and reconnect so that you can stay on top of technical developments to best serve your clients or businesses

This fall we have a few new products and services to help you stay connected in a rapidly changing world First, there is our new CPE onDemand to provide education when and where you want it With this very affordable service you have 24/7 access to an expanding catalog of 1- to 2-hour HD video courses you can take online anytime to earn CPE from the comfort of your own computer.

Next, we have our new virtual Public Practice Center Head to our website [www icpas org] and find the connections and resources that small and mid-sized practitioners need to help power their practices We offer FREE succession planning guidance provided by topnotch consultants in this field, marketing toolkits to help you leverage social media to market your firm, and technical updates that keep you up-to-date on your professional areas of expertise

Finally, our new mobile website puts all the information you need in the palm of your hand Log onto www icpas org/mobile on your smart phone and even when you’re on the go you’ll have our most popular web tools with you

These days it takes more than a compass to navigate through the complexities of the global, mobile, nonstop work environment I hope the ICPAS can be your local ally in a rapidly changing global world

INSIGHT is the official magazine of the Illinois CPA Society, 550 W Jackson, Suite 900, Chicago, IL 60661, USA Its purpose is to serve as the primary news and information vehicle for some 23,000 CPA members and professional affiliates Statements or articles of opinion appearing in INSIGHT are not necessarily the views of the Illinois CPA Society The materials and information contained within INSIGHT are offered as information only and not as practice, financial, accounting, legal or other professional advice Readers are strongly encouraged to consult with an appropriate professional advisor before acting on the information contained in this publication It is INSIGHT’s policy not to knowingly accept advertising that discriminates on the basis of race, religion, sex, age or origin The Illinois CPA Society reserves the right to reject paid advertising that does not meet INSIGHT’s qualifications or that may detract from its professional and ethical standards The Illinois CPA Society does not necessarily endorse the non-Society resources, services or products that may appear or be referenced within INSIGHT, and makes no representation or warranties about the products or services they may provide or their accuracy or claims The Illinois CPA Society does not guarantee delivery dates for INSIGHT The Society disclaims all warranties, express or implied, and assumes no responsibility whatsoever for damages incurred as a result of delays in delivering INSIGHT INSIGHT (ISSN-1053-8542) is published four times a year, in

SEEN H E A R D

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ICPAS Launches Mobile Site

The Illinois CPA Society is here to help you even when you ’ re on the go The new ICPAS mobile website puts the Society ’ s must-have benefits and services in the palm of your hand Find out what ’ s new, browse the education calendar, search Career Center job openings, access licensing and registration information, and more all formatted for easy viewing and navigation on your mobile device Visit www icpas org/mobile today to add us to your home screen

Top Concerns For CFOs

According to the Robert Half International report, CFO Concerns: What Are the Top Challenges Facing Today ' s Financial Executives? the list of management pressures isn’t getting any shorter The report reveals three of the greatest issues challenging organizations to be rising healthcare costs, controlling spending and maintaining staff morale

Thirty-four percent of CFOs said their companies are responding to rising healthcare insurance costs by raising employees' contributions, and 20% are reducing healthcare benefits A further 62% are leery about regulatory issues surrounding healthcare reform What ’ s more, finding a balance between staff retention efforts and expenditures is a mounting focus, with 29% saying subsidized training and education would lead their retention efforts, followed by flexible work hours and telecommuting (24%), and mentoring (24%)

Visit roberthalfmr com for more

Private Companies Investing in IT

FEATURED APP: UDoGood

Designed for the iPhone, iPad and iPod Touch, UDoGood [udogoodapps com] allows users to document, photograph and record cash and non-cash charitable donations all in one place, and quickly email a complete list of donations to themselves or their tax preparers and financial advisors An added bonus: If ever audited, a list of each item donated, including the value, date, and name and address of each recipient charity, can be easily provided to the IRS

The UDoGood app is available from Apple’s App Store for $2 99

Twenty-nine percent of private companies surveyed for PricewaterhouseCoopers’ Private Company Trendsetter Barometer plan to increase their IT budgets an average of 6 6% over the next year a year-to-year increase of nearly 19%. Key areas of planned IT investment for private companies over the next one to three years include information security (70%), next-generation data management and analysis (50%), enterprise mobility via tablets and handheld devices (48%), social media/networking (46%) and cloud computing (40%) The leading business objectives behind these IT investments include making business processes more efficient and effective (90%), better managing enterprise data (75%), optimizing business information/analytics (73%), making the business more agile (58%) and attracting new customers (58%)

Ratio of employees who receive emails from their bosses over the weekend and are expected to reply. Source: Right Management

$123.4 billion

Size to which the North American business software market will grow in 2011

Source: Ovum/Datamonitor

New Public Practice Center Launched

The new ICPAS Public Practice Center [www.icpas.org/public] provides small and mid- sized practitioners with the connections and resources to power their practices Key features include quick answers to questions on licensing, registration and peer review requirements, as well as the new IRS Registered Tax Return Preparer Program Users also can access free succession planning services, not to mention live help via the Research Specialist, The NETWORK and ICPAS staff experts

Watch Out for Hackers!

A national Ponemon Institute survey of 583 IT security practitioners reveals that 90% of organizations have had at least one network breach in the past year, and 59% have had two or more Further, 41% of respondents indicated that the financial consequences of a breach can be in excess of $500,000 when accounting for cash outlays, internal labor, overhead, revenue losses and other expenses Overall, 33% of respondents said they have low confidence in their organization’s IT infrastructure Interestingly, 51% report that less than 10% of their IT budget is dedicated to security

Source: CPATechviews com

M&As Alive & Kicking

KPMG International’s [KPMG com] latest Global M&A Predictor indicates that the outlook for global M&As will continue to be positive Sectors to watch include healthcare, utilities, telecommunications and consumer staples Conversely, energy and basic materials have pulled back recently, although the demand for limited global resources should continue to influence deals in this sector The consumer discretionary, industrials and technology sectors have shown the lowest increases in confidence.

SOLUTION SPOTLIGHT: ProfitSolver 4 1

Patented just this summer, Fee Technology ’ s ProfitSolver 4 1 is an innovative analytical tool that paints a clear picture of your practice’s financial health and where and how to make improvements Promising the ability to “set competitive prices and know exactly how to offset them to achieve a predetermined profit,” ProfitSolver 4 1 instantly reveals how “adjusting one service (or item) offsets the other ” A four-hour training and consulting session allows you to create a report that details the exact profit and loss for each service you have chosen to review Visit feetech net for more information

The Audit Hour, Pt. 1

Get to know how the audit process works after all, you could be next!

By Keith Staats, JD

State and local tax audits are a fact of life. While audit process specifics vary from jurisdiction to jurisdiction, there are common themes to them all

This column is the first of a two-part discussion on the audit process Part One discusses audit selection, scheduling, scope and day-tod a y i n t e r a c t i o n w i t h t h e a u d i t o r. P a r t Tw o , which will appear in the Winter issue, will discuss the audit results and what happens in the case of an unagreed audit

While state and local tax authorities generally decline to disclose specific information about the audit selection process, certain patterns are clear Generally, company size affects the likelihood of an audit, and state and local revenue departments typically subject all companies in their jurisdictions over a certain size to regular or “continuous” audit

Past audit history is one of the biggest factors determining the likelihood of an audit. If a significant liability resulted from a previous audit, it’s likely the tax authority will return during the next audit cycle

Keith is a senior manager of Grant Thornton’s Chicago -based State and Local Tax practice, having previously served as general counsel of the Illinois Department of Revenue As general counsel, Keith was involved in the development of tax policy, the evaluation and review of tax-related legislation and the overview of taxrelated litigation

I n t h e c a s e o f i n c o m e t a x , c o m p a n i e s w i t h income are more likely to be audited than comp a n i e s w i t h l o s s e s A l t h o u g h a u d i t s a r e c o nducted to determine compliance, tax revenue g e n e r a t e d i s a l s o a n i m p o r t a n t b a s i s f o r t a x administrators when selecting companies for audit And because tax administrators have to justify the size of their audit staff to budget officials, funds generated per auditor is an important component of that calculation This means that tax authorities tend to review whether a company is generating taxable income as part of the audit selection process But don’t be fooled; a lack of income won’t necessarily deter an audit. And, if during a tax return review tax administrators discover the taxpayer ’s taxable income is somehow out of line with expected results, this too could trigger an audit.

What’s more, tax authorities will randomly select companies within a jurisdiction to communicate the fact that any company could be the subject of an audit At times, they may even target specific industries or types of business. For example, the Illinois Department of Revenue (IDOR) has targeted “cash businesses,” like small grocery stores and bars, after concluding that such establishments were more likely to underreport. The IDOR has also targeted veterinarians for sales tax audits after determining that they were not complying with sales tax requirements for the pet food and medications they sell Non-filers are also prime targets. State tax departments have in-house units that crossc

returns, and vice versa They exchange information with the federal government and other s t a t e s i n o r d e r t o t a rg e t c o m p a n i e s b a s e d o n federal or state information.

Once selected for audit, the taxpayer is asked to schedule a date for an opening conference with the auditor, during which they provide requested documents for review. These documents, for the most part, will be related to the particular tax being audited However, do expect the auditor to ask for documents and to make inquiries into other taxes administered by the taxing authority. A sales tax auditor, for example, will ask for documents relating to verification of income tax filings. Don’t be surprised if the auditor asks for copies of documents already in the taxing authority’s possession, such as income tax returns filed with that particular state

When scheduling an opening conference, the taxpayer should agree to a date that allows enough time to compile and review the requested documents and consult with a tax advisor. Never enter an opening conference unprepared And once a date is set, do your best not to reschedule Nothing is more likely to get an audit off on the wrong foot.

At the audit opening conference, the auditor should explain his or her audit work plan and how long he or she anticipates being present In the case of sales and use tax audits, the auditor will explain the proposed audit methodology, if sampling will be used and, if so, the nature of the sampling. It’s extremely important that the taxpayer understand and be comfortable with the methodology the auditor proposes since the n a t u r e a n d e x t e n t o f s a m p l i n g u s e d c a n p r ofoundly impact the audit results

Auditors expect space in which to work a desk and a phone at the very minimum Howe v e r, t h e y s h o u l d n ’t b e d e l e g a t e d t o a d a m p corner of the basement or, at the opposite end o f t h e s p e c t r u m , g i v e n a s p o t i n t h e c o r n e r office Strive for the moderate choice

Taxpayers undergoing an audit are also advised to limit the auditor ’s interaction with the taxpayer ’s staff, and to require the auditor to make all requests for additional information or copies of documents in writing Feel free to push back if the auditor is making unreasonable requests, but at the same time don’t be unreasonable in limiting access to information. What’s more, a copy of all documents given to the auditor should be kept on file.

Look out for Part Two of this article in the next issue.

upcoming events

corporate finance professionals

executive education

Better Decisions = Bigger

Bottom Line: Build Value with a Disciplined Approach to Decision-Making

October 11, 2011 | Chicago, IL

executive education

Strategic Risk Management: The New Core Competency

November 14, 2011 | Chicago, IL

conference

Ethics in Troubled Times: Ideas and Actions for Firms and Companies

December 1, 2011 | Chicago, IL

technical workshop

Mastering the Applications of Budgeting While Side Stepping the Pitfalls

December 2, 2011 | Chicago, IL

executive education

Strategic Cost Analysis: Tools for Lowering Your Company’s Costs

December 15, 2011 | Chicago, IL

technical workshop

Advanced FASB Review: Tackling the Tougher GAAP Issues

December 16, 2011 | Chicago, IL

executive education

The Path to Good Governance: Managing the Intersection of Corporate Governance, Risk Assessment/Management and Strategic Leadership

January TBD, 2012 | Chicago, IL

conference

Controllers Conference

March TBD, 2012 | Rosemont, IL

making your life easier | www.CCFLinfo.org

The Fox in the Henhouse

Is that a trusted employee or unscrupulous predator lurking in your midst?

By Brad Sargent, CPA/CFF, CFE , CFS, Cr FA , FABFA

Brad is the managing member of The Sargent Consulting Group, LLC , which specializes in forensic accounting and financial investigation He is a frequent lecturer on forensics and fraud, and is chair emeritus of the American Board of Forensic Accounting An ICPAS member since 2002, Brad also serves on the Society ’ s Board of Directors

You’ve seen it before: The “rainmaker” sales professional from a large corporation who’s heading to jail for committing criminal fraud.

K n o w n b y c o l l e a g u e s f o r p l a y i n g f a s t a n d l o o s e w i t h t h e r u l e s , t h i s i n d i v i d u a l perpetually fell under the radar as long as he or she was making it rain. Until, that i s , a l o w e r- r a n k i n g , l o n g - t e r m e m p l o y e e called the whistleblower hotline and notified leaders of the “inconsistent application of firm policy” (otherwise known as “special treatment”).

Following an investigation into allegations of theft and fraud, a shocking disregard for ethics was uncovered and harshly dealt with by management. The arrogant sales professional was summarily marched from the premises and handed over to the proper authorities for criminal prosecution. In the meantime, several members of management were discreetly cycled out of the organization in reward for their lack of oversight

How did it all come to this? How could one individual wander so far afield of the corporate ethical structure? Why was so m u c h o v e r l o o k e d f o r t h e s a k e o f p r o f i t ? W h y d i d c e r t a i n s e n i o r l e a d e r s , m a j o r p r o d u c e r s a n d t r u s t e d f i d u c i a r i e s g e t t o play by a different set of rules?

In the long run, organizations that fail to set the right priorities and a l l o w k e y p e r s o n n e l t o d e m o n s t r a t e p r e d a t o r y b e h a v i o r f a c e f a r greater losses. Spotting the predator early on can save corporations millions in legal fees, lost profits and diminished morale. The warning signs are there

Two distinct types of foxes prowl through corporate henhouses: The “sly fox” who hides beneath a veneer of trust, and the “alpha fox” who struts through the c-suite, flouting rules and policies. These personas may seem outlandish, but they do exist

The sly fox seeks to blend into his or her surroundings, often being a solid performer who is a glowing example of dedication In fact, they’re so dedicated to their work that they don’t take vacations, which is itself a glaring warning sign: Many fraud schemes rely on perpetual vigilance a n d a r e u n c o v e r e d w h e n t h e p e r p e t r a t o r, w h o n e v e r t a k e s t i m e o f f ,

comes down with a sudden, unforeseen illness The ethical employee who fills in then f i n d s s o m e t h i n g a m i s s a n d t h e s l y f o x ’s scheme unravels

A n o t h e r t e l l t a l e s i g n i s a n e a g e r n e s s t o wear multiple hats. They’ve earned a high level of trust from their superiors and are r e a d i l y a v a i l a b l e t o c o n s o l i d a t e j o b f u n ctions to save time and money particularly in accounting departments The problem is, t h e t a s k s t h e y s e e k t o g a i n c o n t r o l o f a r e often interrelated rather than being subdivided Think of the loyal and trusted clerk who receives cash, fills out the deposit slip a n d m a k e s t h e b a n k d e p o s i t I n t h e o r y, i t seems like a great idea: Increased efficiency and saved dollars. In reality, this is a recipe for cash theft. The same goes for the corporate accounts payable professional with the ability to approve, pay and record invoices a n d p a y m e n t s i n t h e a c c o u n t i n g s y s t e m Fictional goods and services are “provided” and paid for

The hallmark of the sly fox is a distinct l a c k o f g r e e d ; c o n s i s t e n t w i t h h i s m o du s operandi , he takes small amounts at a time to stay under of the radar.

T h e k e y t o s t o p p i n g a s l y f o x i s u s i n g good business sense and enforcing policies. M a n d a t o r y v a c a t i o n s , s e g r e g a t i o n o f j o b duties and personnel rotation are all formid a b l e r o a d b l o c k s , a n d c o r p o r a t i o n s t h a t e x e rc i s e h e a l t h y p r o f e s s i o n a l s k e p t i c i s m will stay a step ahead

The alpha fox presents a completely different set of threats The perception that an individual is above the law can cause lasting damages.

David B. B. Helfrey, partner in the law firm Helfrey, Neiers & Jones, P C and a former Department of Justice prosecutor who specializes in white-collar crimes, explains that, “It is important that 'key' employees be s u b j e c t t o t h e s a m e s c r u t i n y f o r f i n a n c i a l m i s d e e d s a s a l l o t h e r e m p l o y e e s o n a n ongoing basis to avoid the embarrassment, l o s s o f c o n f i d e n c e a n d g o o d w i l l t h a t comes with the publicizing of their financial misdeeds. Few major business entities h a v e a v o i d e d s u c h e m b a r r a s s m e n t s o v e r the years due to the favored treatment of the 'business getters '”

Luckily, alpha foxes are much easier to i d e n t i f y. T h e y s e n d b l a t a n t m e s s a g e s t h a t

corporate culture and policies do not apply to them, may be unresponsive to peers and subordinates, work irregular hours, exhibit inappropriate personal behavior and exude a n e x t r e m e s e n s e o f e n t i t l e m e n t a l l o f which may be signs of the unethical or illeg a l a c t i o n s t h e s e i n d i v i d u a l s a r e t a k i n g against your company.

Beware of corporate leaders who rely solely on outside professionals, such as auditors and attorneys, to defend their organizations from threats As Helfrey explains, “A lawyer's skill set rarely includes strong management skills Millions are stolen from large and small firms each year by trusted accounting staff and attorneys as documented by the steady prosecutions in the media each year.”

Want a true indicator of potential problems? Put a hidden camera in front of the storage area that holds corporate marketing merchandise The sly fox will sneak in and grab a coffee mug; the alpha fox will sneak in and grab a case of expensive golf balls and golf shirts Either way, you have a fox in your henhouse.

Goal in Sight

Six ways to help clients on their homestretch to retirement

By Mark J Gilbert, CPA/PFS

Mark is a principal in the financial advisory firm of Reason Financial Advisors, Inc His 25-plus years of finance and accounting experience includes 13 years in personal financial planning An ICPAS member since 1982, Mark currently serves in the Society ’ s IA/PFP Member Forum Group and on its Committee on Structure and Volunteerism

Ihave a term for clients who are 1 to 3 years away from leaving the work world: “RISers,”or “Retirem e n t I n S i g h t e r s ” Ty p i c a l l y, R I S e r s h a v e r a i s e d a f a m i l y, p a i d f o r c o l l e g e a n d a r e f o c u s e d l i k e a l a s e r o n m a x i m i z i n g r e s o u rc e s t o p r o v i d e f o r a secure retirement

So, how can you help them to reach their goal?

First, update their retirement roadmaps Since you drew up the last plan, your clients’ financial lives (income, expenses, assets, etc ) most likely have changed. As RISers think about getting their financial houses in order, make sure they have a clear view of their present financial situation. One important consideration: Living expenses don’t necessarily decline in retirement. While some expenses do decline (business entertainment, transportation, etc ), other expenses tend to increase as RISers seek to fill as much as 50-plus hours a week that they previously spent at work

Another important truth to share: RISer clients may be drawing down funds from their investment a c c o u n t s t o m e e t l i v i n g e x p e n s e s j u s t w h e n accounts have fallen in value If so, they’ll have to sell more stock or mutual fund shares to meet their e x p e n s e s , a n d t h e r e f o r e w i l l h a v e f e w e r s h a r e s remaining in their investment portfolios when the stock market recovers

In response, suggest that they reduce their equity holdings and develop a more conservative overall portfolio allocation while still at work They also should maintain that conservative allocation early in their retirement years It may seem counter-intuitive, but older retired clients actually a r e i n a b e t t e r p o s i t i o n t o i n v e s t m o r e a g g r e s s i v e l y t h a n y o u n g e r retired clients because the former have fewer years for which to plan

Once your clients have a solid understanding of their financial situations, they’ll welcome your suggestions, including:

1. Max out savings Employer 401(k), 403(b) and 457 plans all provide for catch-up provisions that can increase annual contributions from $16,000 to $22,000 a year IRAs include a catch-up that can bring maximum annual contributions in the $5,000 to $6,000 range In most cases, the immediate income tax deferral on contributions and the long-term build up of value before required distributions are taken are a better play than saving and investing outside these plans.

2. Be aware of pension plan provisions. This is the time to help RISer clients working in education, government and the corporate world, where they may receive qualified defined benefit pension plans, to understand and take full advantage of plan provisions Your advice to defer retirement by a year or two, or possibly to accelerate retirement, may result in a larger annual retirement benefit

3. Understand Social Security options. Your RISer clients will have a keen interest in m a x i m i z i n g S o c i a l S e c u r i t y b e n e f i t s , which means you’ll need to be familiar w i t h t h e i r b e n e f i t p a y o u t o p t i o n s . P l u s , Social Security Administration represent a t i v e s p r i m a r i l y f o c u s o n d e a l i n g w i t h i n d i v i d u a l s w h o e l e c t t o r e c e i v e t h e i r benefits within the next 12 months. You can be a great help to clients by reviewing their alternatives now

4. Pay down debt. Most RISer clients prefer to enter retirement with as little debt as possible Frankly, it doesn’t matter whether that debt is “bad debt” (like credit card balances) or “good debt” (like a mortgage or home equity loan) Helping them to devise a plan to pay it all down while still working will provide them with peace of mind, and will help them to better tolerate the volatility of the investment markets

5. P l a n f o r r e t i r e m e n t h e a l t h c a r e c o s t s . Medicare and the Affordable Care Act both help retirees with healthcare expenses; however, there is no free lunch Fidelity Investments reported earlier this year that it estimates a 65-year-old married couple retiring this year will need $230,000 to pay for healthcare costs in retirement.

6. Purchase long-term care insurance. This insurance, designed to cover the potential cost of nursing-home care or home care, may have the most appeal to middle-class investors for whom such care could be financially catastrophic Well-to-do retirees may be able to self-fund, and lowerincome retirees will be covered under Medicaid What’s more, in retirement longterm care insurance could be significantly more important to one’s financial health than life insurance At some point, the cost of term-life insurance becomes prohibitively expensive. Also, life insurance really serves as salary replacement insurance a need that goes away once a retiree has stopped earning

Lifetime Achievement 2012

Award Recommendations Now Being Accepted

The Illinois CPA Society is seeking recommendations for the 2012 Lifetime Achievement Award, which is presented each year to an individual(s) who has provided distinguished service to the profession in Illinois and/or nationally.

Candidates are selected based on a lifetime of service to the profession. Factors to be considered include:

> Contribution to the profession

> Professional position attained

> Length of service

> Illinois professional involvement

Recent Award Honorees:

2011 Lawrence A. Wojcik

2010 Edilberto C. Ortiz

2009 Cameron T. Clark Duane D. Suits

2008 Belverd E. Needles, Jr.

2007 Edwin Cohen

2006 Richard T. Sullivan

2005 Vincent E. Villinski

Richard E. Ziegler

Letters of recommendation with information supporting the individual’s qualifications (resume, biography, etc.) can be sent to:

Elida Gonzalez, Lifetime Achievement Award

Illinois CPA Society, 550 W. Jackson Blvd., Suite 900, Chicago, IL 60661 Or by email to: gonzaleze@icpas.org

Deadline for recommendations is December 15, 2011

The Road Ahead

Look forward to a full fall legislative calendar

By Marty Green, Esq

De s p i t e t h e d e b t c e i l i n g m e l t d o w n i n Washington, D C and the hemorrhaging state d e b t i n S p r i n g f i e l d , I l l . , t h e C PA p r o f e s s i o n s u c c e e d e d in a d v a n c in g s e v e ra l fe d e ra l a n d state initiatives this spring and summer. The P a t e n t R e f o r m A c t o f 2 0 11 , f o r e x a m p l e , included a provision to prevent the patenting of tax strategies This provision was strongly advocated by the AICPA and state societies, a n d h a s r e m a i n e d o n t h e f a s t t r a c k f o r f i n a l approval by the Senate and signature by the P r e s i d e n t I n f a c t , S e n a t e l e a d e r s h i p c l e a r e d the way for the patent reform legislation to be one of the first measures to come to vote upon the Senate’s return from summer recess.

On the state level, the Society was successful in working with Governor Quinn and his staff on Society-sponsored legislation House Bill 1277, for instance, amends the Illinois Open Meetings Act to provide for closed meetings between auditors and government finance and audit committees in the areas of internal control weaknesses, identification of potential fraud risk areas, known or suspected frauds and fraud interviews The Bill is now Public Act 97-0318 and is effective January 1, 2012

Throughout the summer months the Society’s Government Relations Office closely monitored the Joint House/Senate Revenue Committee hearings held to review the state’s business tax structure The Speaker of the House and President of the Senate convened these joint hearings to examine Illinois' corporate tax structure in response to reports of tax breaks and incentives to large corporations headquartered in Illinois following the state income tax increase. The committee’s objective is to review the following questions: What are Illinois’ strengths in terms of tax policy and overall business climate? What tax incentives offered in Illinois are least effective and why? How can they be improved? And, what incentives offered in other states are the most effective and why?

Some people have said the state’s failure to close “loopholes” gives certain businesses an unfair advantage over others. Are there any existing provisions (either at the federal level that flow to the state level, or state tax provisions) that you consider “loopholes”? Is it better to eliminate special incentives altogether, putting all businesses on a level playing field? Is Illinois’ business tax system unfair? And what changes

Marty is vice president of Government Relations for the Illinois CPA Society He previously served as executive assistant attorney general for Illinois Attorneys General Lisa Madigan and Jim Ryan, and as director of the Governor's Office of Citizens Assistance and assistant to the Governor for Public Affairs, both under Governor James Edgar A graduate of Western Illinois University and Saint Louis University Law School, Marty is a practicing lawyer and member of the Illinois Bar.

to the state’s business tax policy would make you more likely to create and retain jobs in Illinois?

While the Society didn’t make a formal presentation at any of the hearings, the ICPAS Government Relations Office has worked closely with House Revenue Committee Chair Rep John Bradley, members of the House and Senate Committees, and legislative staff as an objective resource in answering questions and providing technical information. I anticipate that the General Assembly will give a great deal of emphasis to identifying the Illinois corporate tax structure’s pressure points, as well as areas that need to be updated.

It appears there’s a mounting list of things that the General Assembly will need to tackle during the fall veto session. There are six working days scheduled in October and November for the veto session where members of the House and Senate will review legislation that the Governor has vetoed Based on the Governor ’s protests over the massive gaming bill that passed both chambers, there’s speculation of needed adjustments to ensure his signature. Other issues include the McCormick Place corrective legislation to implement reforms invalidated by the courts, and reconsideration and adjustment of budget items the Governor has vetoed Also, in response to Moody’s Investor Service’s late summer “special comment” characterizing Illinois’ pension system as being on an “unsustainable ascent,” it’s expected that the House will again attempt to pass a pension reform bill during the veto session

What’s more, with the pending 2012 post-redistricting elections fast approaching, the Society’s grassroots efforts and proactive engagement with legislators to identify issues of importance to the CPA profession are as important as ever. The Legislative Contact Program, Chapter Legislative Events and Town Hall Forums are all part of our proactive engagement to connect Society members with members of the General Assembly

Our Legislative Contact Program, for example, matches CPA volunteers with their respective federal and state legislators, and is one of the most effective tools we use in communicating with elected officials Chapter Legislative Events are also an excellent venue for exposing legislators to the excellent resources that Society members provide when interpreting technical issues in a variety of areas or g i v i n g f e e d b a c k o n t h e i m p l i c a t i o n s o f p e n d i n g p o l i c y m a t t e r s Finally, our Town Hall Forums provide an opportunity for legislators to hear about the profession’s priorities and to visit with CPA attendees. These initiatives greatly add to the prestige and reputation of the CPA profession in policy-makers’ eyes, and allow us to successfully advance our legislative agenda.

I encourage you to join our cadre of legislative contacts and to be part of our grassroots outreach As you may have read in our Capito l D i s pa tc h e N e w s l e t t e r [ w w w i c p a s o rg / C a p i t o l D i s p a t c h h t m ] , there’s been a great deal of turnover in the General Assembly With so many new General Assembly members, the time is ripe for you to join other CPA contacts in establishing a relationship You can visit the Government Relations section of the Illinois CPA Society w e b s i t e [ w w w i c p a s o rg ] f o r m o r e i n f o r m a t i o n o n t h e L e g i s l a t i v e Contact Program.

Also, if you serve as a treasurer or finance chair for an elected official, we would like to hear from you We produce the annual Tax Gui de for Members of the General Assembl y that includes extensive information on campaign financing regulations, reporting requirements, and instructions and forms, and are happy to provide this resource to you

You too are the eyes and ears of the Illinois CPA Society. Let us hear about your contact with your elected officials or any concerns you may have.

The Female Factor

When doing business overseas, women are proving themselves anything but the weaker sex.

By Christine Bockelman

Anyone who accepts an overseas assignment expects to encounter cultural differences along the way Always r e m o v e y o u r s h o e s b e f o r e d i n i n g w i t h a c o l l e a g u e i n J a p a n , f o r i n s t a n c e D o n ’t g e s t u r e w i t h y o u r l e f t h a n d w h e n v i s i t i n g t h e U n i t e d A r a b E m i r a t e s A n d d o n ’t b e alarmed if your client in Brazil kisses you on each cheek as he or she greets you.

For women, though, working overseas isn’t just about respecting the morays and intricacies of another culture In the face of lingering stereotypes that label them “the weaker sex,” women often have to work harder to prove that they’re capable professionals.

“I was going to our member firm in Bra zil to re vie w some work for a client that has a subsidiary there,” Arla Lach, an audit senior manager at Grant Thornton, recalls “The manager introduced me to all the partners, and not one of them was a woman. The only females I saw in the office were executive assistants ”

In fact, according to the 2011 Grant Thornton Internati onal Busi ness Report, the number of women in senior management positions globally is on the decline. Currently, women hold 20 percent of such positions, down from 24 percent in 2009, and up just 1 percent from 2004

Business Etiquette Abroad

Brazil

n It ’ s common to greet an individual by kissing them once on each cheek If you ’ re single, add a third kiss

n Physical contact is a cultural norm in communications; relationships are far more important than legal documents

n Inviting a colleague to share an after-work drink will not be frowned upon or misconstrued

Japan

n Opt for modest, conservative clothing and neutral colors Leave your pant suits and high heels at home

n Dress to impress If you have Prada in your closet, pack it

n Ask lots of business questions, but not personal ones

United Arab Emirates

n Wear modest, concealing clothing in public (long sleeves, high necklines, closed-toe sandals) Clothing should not be form-fitting

n Don’t cross your legs when sitting; showing the sole of the foot is considered offensive

n When gesturing or eating, use only your right hand; the left hand is reserved for purposes of hygiene

C o u n t r i e s w i t h t h e h i g h e s t p e rc e n t a g e o f women in senior management positions include Thailand (45 percent), Georgia (40 percent) and Russia (36 percent) Countries with the lowest percentage include India, the United Arab Emirates and Japan, where fewer than 10 percent of s e n i o r m a n a g e m e n t p o s i t i o n s a r e h e l d b y women In Brazil, 24 percent of senior management positions are held by women, besting the United States, which sits at 15 percent

Gabby Rodil says she notices gender differences quite a bit when doing business in Brazil, her birth country “It can be very subtle,” she says “I’ll get to places and I can see they will have very low expectations of me because I am a woman. I go to an audit and I am coming in as t h e p o l i c e , b a s i c a l l y. T h e y s e e m e a n d t h i n k , ‘ O h , h o w h a r d c a n t h i s b e ? I t ’s a w o m a n ! ’ I n B r a z i l , i f I a s k f o r d o c u m e n t a t i o n , t h e c l i e n t might say, ‘Oh, you don’t need that’ and try to brush me off. I tell them, ‘If I didn’t need it, I wouldn’t ask for it ’” On the plus side, she says,

Congratulations to the 2011 Women to Watch Award Recipients

The Illinois CPA Society’s Women’s Executive Committee and the American Institute of CPAs Work/Life and Women’s Initiatives Executive Committee are pleased to honor these women who have made significant contributions to the accounting profession, their organizations, and to the development of women as leaders.

These deserving women will be presented with their awards at the Illinois CPA Society “Women’s Leadership Breakfast” on Thursday, November 17, 2011 at the Standard Club in Chicago.

The mission of the Women's Executive Committee is to enhance the recruitment, volunteerism, retention and leadership of women CPAs in the Illinois CPA Society and the profession through various programs and networking events. This program is one in an ongoing series designed to help women CPAs learn more about important professional issues, expand business networks and foster career advancement.

To register to attend this breakfast, please call the Illinois CPA Society at 800.993.0393 or visit www.icpas.org.

Melissa Kibler Knoll, CPA Senior Managing Director, Mesirow Financial Consulting, LLC

Experienced Leader

Phyllis Malitz, CPA Partner, Silver, Lerner, Schwartz & Fertel Experienced Leader

Arla Lach, CPA Senior Manager, Audit Services, Grant Thornton LLP

Emerging Leader

Jody Padar, CPA CEO and Principal, New Vision CPA Group Emerging Leader

“The bar is low and they are surprised when you surpass it. It’s fun to prove them wrong.”

Wendy Hambleton, National SEC director at BDO USA in Chicago, has been traveling and working overseas for the past 15 years, primarily in Hong Kong, South America, Singapore and Malaysia “I generally think that as a woman you are taken serio u s l y w h i l e w o r k i n g a b r o a d , b u t y o u a r e not always sure,” she admits “You just have to try to be clear with what your point is and why I’ve never heard anyone say no, we are not going to do that (But) you can’t always tell if they are agreeing with you and going to do something else later ”

She’s quick to point out that, in Asia in p a r t i c u l a r, t h e c l i e n t a l w a y s s a y s y e s “ I t doesn’t matter if you are male or female,” she explains “It’s cultural They are never going to say no ”

Being too aggressive in professional settings, however, isn’t always well received,

e s p e c i a l l y w h e n a n A m e r i c a n w o m a n i s the source of that aggressiveness

“ I t h i n k i t ’s a l i t t l e b i t m o r e s o c i a l l y acceptable for American men to be a little a g g r e s s i v e , a t l e a s t i n A s i a , b e c a u s e t h e y sort of expect it from men. I think they still want women to be a little more reserved,” Hambleton explains.

And while holding back might be frustrating, especially if male counterparts are held to different standards, there is a potent i a l u p s i d e “ I f y o u p a u s e a n d l i s t e n a n d take it all in and see how people interact, you can tweak your message a little based o n h o w p e o p l e a r e c o m m u n i c a t i n g Yo u don’t want to go into any country like a bull in a china

“You have to respect the process, especially as a woman,” says Hambleton “Every country has its own protocols, and while it sounds glamorous it’s hard work earning respect from anyone in a business setting, let alone overseas. You have to be sure you’re always thinking and respecting the differences in the way things are done ”

In Argentina, for example, Hambleton was surprised when she walked into an office and the receptionist kissed her on the cheek. “It’s just how it’s done It was very much a business setting, and it’s very much the accepted way to greet someone,” she says.

In a similar vein, in Mexico Rodil finds that she’s asked a lot of personal questions, such as, “Do you have children? “Do you plan to have children?” “Are you married?”

“How old are you?” Most of the time, she quickly adds, these really are innocent, culturally acceptable questions, and you have to temper your reaction accordingly

“ P a r t o f w o r k i n g i n a n o t h e r c o u n t r y i s that you need to develop relationships in spite of differences,” she says “Be flexible, e s p e c i a l l y w h e r e y o u f i n d b e h a v i o r t h a t isn’t customary in the United States Most of the time no insult is meant, so there is no point in getting offended ”

Prepare yourself by doing a lot of research With the amount of information so readily available today, it’s one of the easiest ways to preserve your professional integrity while working in another country Beyond a Google search, check if your firm has offices in the country you are visiting and ask your counterparts lots of questions Use whatever channels are available to you to find out as much information about professional standards as possible. Check into social rules; is it ok for a woman to eat dinner alone with a man, for example (probably yes in Latin America; probably no in the Middle East)

Don’t assume you already have the answers

The biggest piece of advice for women

c o n s i d e r i n g a n o v e r s e a s a s s i g n m e n t i s t o pack your bags and go. “Take any opportunity you can,” Hambleton advises “It’s a f a n t a s t i c e x p e r i e n c e a n d y o u ’ l l l e a r n s o much more than you ever would have from an email exchange If you’re at a time in y o u r c a r e e r a n d p e r s o n a l l i f e w h e r e y o u can make it happen, do it ”

NEW from the Illinois CPA Society

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Choose from a full catalog of 1 to 2-hour HD video courses you can take online from the comfort of your own computer, anytime day or night.

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View the full catalog today at www.icpas.org/ondemand

Gen Knowledge

Understanding how employers view your generation is key to becoming a rising star in the finance world

By Derrick Lilly

You may be the future face of finance, but the current job market won’t necessarily treat you that way As recent graduates or professionals only a few years into your careers, impressing employers and winning promotions will come down to two key factors: Truly knowing and meeting an employer ’s expectations, and proving you’re a worthy investment.

Be forewarned: Millennials are stereotyped as lazy and entitled, willing to work only if there’s a clear and immediate reward With that in mind, now more than ever you need to adapt to and collaborate with the different generations that are calling the shots in the workplace

You all know employers want top-notch recruits who exhibit problem-solving and decision-making dexterity, technical prowess, and the ability to communicate and lead effectively, right? Well, to help you get your foot in the door, or up the next rung in the ladder, here are some insights from the top.

Public Perspective

Whether you aspire to be a corporate finance executive at a Fortune 500 company or a public accounting firm partner, having a Big Four name on your resume carries a lot of clout The opportunities offered by these firms for advanced training, international rotations, and exposure to well-known clients and different lines of business will enable you to develop skills equally sought by corporate and public recruiters. But to gain access to these career-propelling opportunities, young professionals will first have to prove they can perform.

“Young professionals coming into or trying to move up in the workforce need to be sponges soaking up as much as they can about their profession. You won’t succeed in business by being one-dimensional,” says Alyson Ryan, associate director of campus recruiting in KPMG LLP’s Chicago office

Drawing from her recruiting experience with Big Four firms, Ryan encourages young professionals to put their best feet forward and “really work hard, make a name for yourself, build your network, and learn as much as you can about the clients and types of work you’ll be facing ” As she puts it, every firm and company is looking for talented, smart, hard-working recruits with well-rounded soft and technical skills The ones that stand out are the sharp, critical thinkers who inspire confidence in their peers, leaders, customers and clients

Admittedly, this isn’t an easy task Despite being valuable commodities to a profession that survives by constantly replenishing its talent pipeline, Ryan points out that young professionals “sometimes get a bad rap, and leadership sometimes gets frustrated with the impatience they portray. They feel like they should be sitting down with CEOs after two weeks with the firm, and they don’t always realize how much they have to learn.”

Based on that perception, Ryan advises young professionals to “take a step back and do what they need to do at their level Keep in mind that skill aside, our number one expectation of new hires is that they come in with a great attitude, desirous of and interested in learning ”

Taking in the view from the other side of the desk, Ryan believes organizations are adapting to Millennials’ demands by offering more flexible work arrangements and allowing employees to work around their personal and professional commitments and interests And while there is still some pushback from leadership, those with college age or younger children are generally becoming more open to some of the things they have to do to attract the next-generation professional 8

Corporate Considerations

Every business needs strong financial leadership to succeed, which means opportunities for CPAs in the corporate sector are plenty Finding your place in the corporate finance world comes down to knowing where you want your career to take you and aligning your job search with that path

“Your initial career decision has the biggest impact on your longterm career Starting out with the right organization sets your trajectory on the right path,” says Jeramy Kaiman, area managing director of Garelli Wong, a Chicago-based finance and accounting recruiting firm that serves corporate clients.

“There’s probably nothing better you can do than work for a notable public accounting firm if you want to have an enormous corporate career trajectory,” says Kaiman “Many corporate hiring managers want recruits that have public accounting experience, especially when filling the roles of accounting managers at the 5, 7 and 10-year marks ”

Of course, before any employer will invest in you, you’ll have to prove that you’re a promising asset Companies are increasingly looking for recruits who will be able to grow with them. Most commonly, companies want recruits with strong GPAs from recognizable business universities; internships or other relatable work experience; polish and poise during the interview process; prior product and company knowledge; a high ceiling for learning new skills; and a clear explanation of why they want the job

What’s more, “Flexibility and adaptability are crucial; you have to be the kind of person that says, ‘No problem; tell me what I need

to do,’” says Kaiman “Young recruits that are open to rotating through different areas of a company are going to gain a more diverse skill set and progress faster ”

Along that line of thought, Kaiman adds that the most common complaint he hears from executives is that young professionals are unappreciative of the opportunities available to them and have unrealistic expectations of work/life balance, sign-on bonuses and promotions “Young professionals need to realize that professional growth generally happens steadily in the corporate world It’s ok to grow horizontally (challenges, duties, responsibilities) before growing vertically (titles, promotions, pay increases) You’ve got to be able to earn your right to grow as opposed to demanding it up front ”

Niche Knowledge

A different approach to working in the corporate finance world is to join a boutique firm that specializes in niche corporate markets and services These firms offer the opportunity to focus your skills on areas such as financial fraud, mergers and acquisitions, turna r o u n d c o n s u l t i n g , e t c . T h e d y n a m i c e n v i r o n m e n t o f b o u t i q u e firms is conducive to mentorship and developing skills that trans c e n d t y p i c a l c

r

r

r

u b l i c r

l e s . W h a t ’s m o r e , t h e f a s tpaced and challenging pipeline of work will be sure to keep the job interesting day-to-day

Along with the unique environment, however, come unique requirements “You’re not going to have a typical corporate or public accounting job here,” says Michelle M Sargent, MBA, member of The Sargent Consulting Group LLC, a Mokena, Ill -based fraud, forensics, litigation and turnaround consultancy “You can’t just show up and say, ‘OK, I’m going to push papers for eight hours.’ In boutique firms, you aren’t just one of 50 or one of 1,150 employees; you’re likely one of six or seven and everything you do has greater consequences Execution needs to take place, and everyone is playing every role ”

It’s not so much that boutique firms have greater expectations of their employees; it’s just that they have different expectations based on their specialties After all, there’s a certain caliber of character and skill needed to succeed in a high-stakes environment where situations change daily

“Forensics and fraud, for example, require a great deal of flexibility. A proven ability to juggle multiple projects at the same time and succeed at them is very important to success. You need to be able to tie the small details and big picture together,” says Sargent “We closely look at each candidate’s technical, problem-solving and soft skills Can they communicate with us? Are they willing to take leadership? How do they fit in culturally? How are they able to adjust, adapt and grow in this dynamic environment? It’s all important; young professionals need the whole package ”

When it comes to generational wants and differences, it’s best to check them at the door. Boutique firms don’t have the time to deal with the “stereotypical baggage,” Sargent stresses. “Every generation scares the older generation; it’s a perpetual problem. But should we unfairly categorize the next generation of young professionals as unproductive or immature? No They are the next leaders We have to evolve with them, but they also have to evolve with the establishment

“Ultimately, it comes down to the fit Each employee, seasoned or newly graduated, has to prove that they’re going to be valuable to the firm ”

The Green Portfolio

Where do today ’ s investors stand on the issue of clean energy?

By Selena Chavis

According to The Pew Charitable Trusts, from 2009 to 2010 new investments in sustainable energy on a global basis increased 30 percent to a record $243 billion And while the United States grew by 51 percent accounting for $34 billion in new investments we lag behind clean-energy leaders such as Europe ($94 4 billion) and China ($54 4 billion)

It’s a sign of the times, according to industry professionals, who point to an early promising movement that has hit a bit of a stalemate due to political and economic pressures.

“Clean energy investing was really totally below the radar until 2005 and 2006,” says Tom Konrad, editor at AltEnergyStocks com and “green stocks” blogger at Forbes com “The movement has paralleled the public’s interest in clean energy and climate change ”

Konrad explains that early interest became diluted when the financial crisis hit, and “people became more focused on bread-and-butter issues.” Couple that with a political climate divided over alternative energy investing, and “with the decline of subsidies, which we expect in the United States and Europe over the next few years, people have lost interest ”

Richard Beleutz, CEO of Alternative Investment Resource, echoes these sentiments, noting that, “One of the exciting things that occurred as a result of the 2008 election from an alternative energy standpoint was that the movement went more progressive There was a lot of hope at that time, but t

affected the cost of capital and the amount of capital available for projects ”

That said, alternative energy currently makes up about 25 percent of all venture capital investments, says Amy Francetic, executive director of the Clean Energy Trust. “It’s starting to bounce back nicely,” she adds.

Consider the fact that in the first quarter of 2011 a number of successf u l f u n

i

r i g h tSource Energy, $150 million to Fisker Automotive and $106 million to MiaSole And statistics reveal that solar companies continue to attract a growing percentage of total clean-tech venture capital, accounting for 32 percent of total dollars raised in the first quarter of 2011. Energy efficiency businesses also continue to draw a substantial percentage, with energy storage and industry products and services drawing a combined 37 percent of total dollars raised

Founded by prominent business and civic leaders to accelerate the pace of clean-energy innovations in the Midwest, Francetic points out that the Clean Energy Trust is concentrating on a currently overlooked area earlystage funding With a primary emphasis on higher education and university graduates, the trust’s Clean Energy Challenge received more than 70 applications and awarded $140,000 in cash prizes to top Illinois clean-energy entrepreneurs during its first year

Given limited stimulus money and grants, and expectations that the situation will not change in the near future, Francetic says the organization

“There’s an entrepreneurial renaissance happening in Chicago right now,” she says. “That trend is what we are seeing and trying to foster.”

Recent announcements suggest that the Chicago area may be in a strong position to host energy startups going forward “It’s not just the Clean Energy Trust that’s interested There are new funds coming to Chicago,” Francetic explains

Specifically, True North Venture Partners recently announced the launch of its new venture capital company, along with its $300 million green-tech fund to be headquartered in Chicago Also, the $1 4 billion Cleantech Syndicate, which was established by a collaboration of 11 wealthy families and is headquartered in Chicago, represents the largest pool of private equity ever dedicated to the clean-tech and renewable energy space.

While funding may have slowed for alternative energy startups, Konrad says savvy investors are looking for great values in the midst of the general market decline “We don’t think it is the bottom yet,” he comments

Most alternative energy stocks are in a class that would be considered “growth stocks,” attracting optimistic investors open to looking at potential for growth Conservative investors are more interested in “value stocks,” where the growth potential may not be as high but value over time is more certain.

Because capital is hard to come by and banks are not lending, Beleutz says some of the deals currently getting done are structured a ro u n d g u a ra n t e e d c a s h f l o w s . I n t e rme d i a ry l e n d i n g s o u rc e s t h a t have a solid equity cushion and track record are essentially doing the lending for banks, without the same rules and regulations attached

“Another way to get deals done in this environment is to focus on strategic deals,” Beleutz explains “Typically, this isn’t going to be the source of capital for the most innovative deals Strategic deals tend to be more conservative and later stage ”

The best opportunities, says Konrad, lie in sectors less dependent o n s u b s i d i e s . Wi n d a n d s o l a r h a v e t a k e n a h i t t o s o m e d e g r e e because China has moved very aggressively into both industries.

“Energy efficient companies that are well capitalized and offer a unique product are the best buys,” says Konrad “The trend with solar may continue another six months or a year ”

A c c o r d i n g t o P e w C h a r i t a b l e Tr u s t s , e n e rg y e f f i c i e n c y w a s t h e leading beneficiary of venture capital and private equity investments in 2010, attracting $2 8 billion, followed by solar at $2 4 billion and wind at $1 5 billion

“It doesn’t cost as much to invest and deploy these technologies,” says Francetic, adding that these investments tend to bring quicker, near-term payback to owners.

Industry experts agree that there will be considerable opportunity in the alternative energy sector going forward. The unknown for the moment is the profitability potential for companies entering the market

“What’s really going to matter is what the public starts seeing right now, it’s under the radar,” Konrad explains “When the public gets interested, then the government will start doing more Public support will lead to political support ”

Beleutz expects to see trillions of dollars being invested in clean energy technologies over the next decade. “The outlook is good. It’s the short-term, medium outlook that’s challenging,” he says. ”The beauty is that the United States has a system in place to support entrepreneurism. It’s going to be a major player.”

Illinois CPA Society | 2012 OUTSTANDING EDUCATOR AWARD

Nominations for the 2012 Outstanding Educator Awards are now being accepted.

The Illinois CPA Society is currently seeking to recognize three outstanding educators. Two educator awards may be from 4-year schools--one from a school that offers a graduate accounting program and one from a school that does not. One educator award may be from a 2-year school.

Nominations are welcomed from any interested person (colleague, student, administrator, etc.). Nominees must be an Illinois educator at a community college, college, or university with a minimum of five years teaching experience.

Educators who are noted for their teaching abilities, but are now predominantly involved in administration or research are eligible for the award. Nominees do not need to hold a doctoral degree or be a member of the Illinois CPA Society, but must be a CPA.

The primary criteria to be considered in making the selection are the following factors:

Excellence in teaching

Student motivation and mentoring

Educational Innovation

Contributions to the academic community, and/or contributions to the accounting profession

Deadline for nominations is November 28, 2011.

For more information or to nominate a candidate, please visit www.icpas.org/students.

The Media-Sav v y CFO

Do you have what it takes to be your company ’ s public spokesperson?

By Clare Fitzgerald

As CFO responsibilities broaden beyond the financials and branch into operations, management, strategy and other spheres, more and more CFOs are being asked to fill a rather untraditional role: Media spokesperson. Being pegged as company spokesperson is one thing; doing it well is quite another To best represent their companies, brands and themselves (in good times and bad) CFOs need to be credible, polished and on-point when dealing with media outlets

Financial stories always garner media attention, but the intensity of coverage is growing. With greater media scrutiny of the numbers and more journalists seeking out CFOs as sources, financial executives have to be prepared to answer tough questions and deliver company messages without breaking a sweat

And yet, CFOs are all too often underutilized in this role, says Noeleen McGrath, founder of the Chicago-based media training firm McGrath Communications and former television news anchor and reporter.

“It’s amazing how many CFOs are neglected in the media training process,” she says. “Everybody and anybody in the c-suite should be media trained Especially in a financial crisis situation, I would be putting the CFO front and center to talk to the media and reassure investors ”

Sure enough, the CFO knows the numbers and the market trends, and is often the best person to reassure people about the company’s direction and vision However, media experts agree that to be successful, financial executives have to put the numbers into layman’s terms and into a broader context

“I tell financial executives that every balance sheet, every P&L report tells a story,” says Steve Gray, principal at Denverbased media training firm Rockford Gray, LLC. “You have to turn the data into a narrative ”

Message development, preparation and practice are critical keys to success Unfortunately, what many executives don’t do is prepare “Executive-level people too often think they can wing it,” says Gray

Instead, they need to start by identifying messages that resonate, refining those messages and then ensuring their points are delivered clearly McGrath’s advice is to focus on three main points you want to deliver in an interview and practice delivering them; try taping and timing them for instance

“Any sound bite on TV, for example, is going to be around five to seven seconds. Executives need to practice being short, sweet and to the point, which can be a struggle for financial professionals who are used to focusing on details,” says McGrath

Furthermore, keep your emotions in check “I see too many executives get angry when presented with a harsh line of questioning,” she explains “These are very accomplished people who aren’t always used to getting their buttons pushed.”

To this point, Gray stresses the need to think ahead about what reporters will ask “Anticipate the toughest questions you could get, and make sure you have good answers to those questions,” he advises. And find ways to reinforce your core messages in every response you give

Developing relationships with reporters can help interviews run more smoothly, while boosting comfort levels in dealing with the media McGrath suggests following journalists on Twitter, reading their articles, and even offering information or an exclusive about quarterly earnings. “The better the relationship you have with reporters, the better they are likely to treat you in the interview,” she explains “If reporters know you, they’ll be a lot less likely

Your career could hang in the balance... Your career could hang in the balance...

Accountants Proliability Program

You prepare a tax return for a client. It results in severe penalties and interest charges...

You fail to file an amendment to a client’s tax return that would have enabled him to receive a $100,000 tax refund...

Every time a client faces financial harm, you could find yourself in court. The costs to defend yourself could cost more than the lawsuit itself.

If someone in your firm makes an error, do you have the right coverage?

Since you can’t predict which way the scales of justice will tip, your best protection is the ICPAS-endorsed Professional Liability Insurance Plan.

to try to railroad you or catch you off guard “There’s a lot to be said for knowing what to expect and what’s going to come at you ”

Also keep in mind that you need to lean on and work with corporate communications teams to build media relationships and stay up-to-date on the latest company messaging and issues. Another good idea is to seek out formal media training. “The time for media training is before a crisis happens, not after,” says McGrath “CFOs are in a very public role and will be under intense pressure. They don’t have the luxury of making mistakes or misspeaking ”

“Part of being successful is having a public face and public brand,” says Gray. “Media exposure will promote your organization and it provides a great way to present a face that people feel good about ”

McGrath adds that being called upon as an expert can build your reputation and often leads to referrals “It’s good for you and good for your business,” she says “You can influence a lot of people in one fell swoop.”

ICPAS Media Contacts Network

When media outlets need an expert to comment on anything from general accounting to corporate finance, they often contact the Illinois CPA Society (ICPAS) to find a knowledgeable source

Representatives from the ICPAS review the media request, gather additional details if needed and then search the ICPAS Media Contacts Network to find a well-informed member who can speak about the topic Nearly 100 professionals are currently members of the network

requests come down to specialty, timing,

availability and location “ We work to maintain a varied pool of contacts with different specialty areas, interests, geographic variety and flexibility,” she says “Being part of our Media Contacts Network really helps members build their overall communication skills,” she continues “Our contacts often say it helps them to put their thoughts together and improves their presentation skills It really makes them more well-rounded And the more they do it, the more they enjoy it and the better they become ”

In addition to screening and vetting media requests, the ICPAS also provides support throughout the interview process, helping members anticipate reporter questions and prepare for the interview “ We give our experts quite a bit of support and make sure they aren’t put on the spot,” says Kulm

Members can participate as much or as little as they choose, and they can specify topic and medium preferences “Some of our contacts aren’t as comfortable appearing on television and only want to do print interviews, for example,” says Kulm “ We give them the opportunity to tell us that and record those preferences when they sign up ”

The ICPAS has had nearly 4,000 media placements in the past 15 months, including television, print, radio and internet appearances on local, regional and national levels all thanks to the efforts of network participants

As Kulm points out, in addition to serving as spokespeople, members can contribute to the network in other important ways “Being one of our media experts doesn’t mean we ’ re going to put you on TV tomorrow,” she explains “Experts may be needed to review ICPAS press releases, provide off-the -record background or technical information to a reporter, or simply contribute ideas ”

However they contribute, Kulm says getting information about the profession out to the public is vital “Ultimately, we ’ re all working to influence the perception of the CPA and to help people understand the variety and quality of expertise that CPAs provide ”

If you’d like more information about the ICPAS Media Contacts Network, contact Caitlin Petersmark at 312 993 0407 ext 250 or petersmarkc@icpas org

Outstanding

Leadership in Advancing

D I V E R S I T Y

Nominations for the 2012 Outstanding Leadership in Advancing Diversity Award are now being accepted.

The Illinois CPA Society is currently seeking nominations to honor the work of exceptional CPAs. The Outstanding Leadership in Advancing Diversity Award is designed to recognize individuals who have made a marked contribution to diversity within the accounting profession.

The Emerging Leader Award will recognize young professionals who possess the qualities of the Outstanding Leadership in Advancing Diversity Award but typically have four plus years of full-time work experience.

Nominees can be employed in any area of accounting or finance; including public accounting, industry, not-for-profit, education, government or consulting.

Criteria considered for the ideal candidate include:

A CPA credential (recipients do not need to be a current Illinois CPA Society member)

Unique and creative contributions to the accounting profession in advancing diversity

Impactful diversity efforts in the accounting profession

Personal initiatives outside of job functions (e.g. volunteer work, firm/corporate initiatives, educational programs, etc.) and, activities within the job function For more information or to nominate a candidate, please visit www.icpas.org.

The deadline for nominations is Friday, November 15, 2011.

There’s an App for That

Six great mobile applications for finance pros on the go.

By Derrick Lilly

Cl o u d c o m p u t i n g a n d m o b i l e a p p s h a v e t a k e n t h e b u s i n e s s w o r l d b y s t o r m W h a t d o e s t h i s m e a n f o r f i n a n c e p r o s ? Working on the run is easier than ever.

“Mobile applications truly enable professionals; they free up a person to more effectively and efficiently perform their intended business function and that’s a benefit for all organizations, regardless of size,” says Todd Wilkerson, director in the Growth Strategies and Solutions practice at Baker Tilly Virchow Krause LLP “We’re increasingly working in a virtual world where professionals must work remotely from the field ” Simply put, “Organizations and their employees can leverage mobile applications for productivity gains ”

Accountants in a CPA Trendl i nes [cpatrendlines com] survey report that mobile capabilities “increase personal productivity; improve client service and satisfaction; improve communications and coordination w i t h c o l l e a g u e s ; a n d e n h a n c e w o r k / l i f e balance,” according to Rick Telberg, president and CEO of CPA Trendl i nes Research Wilkerson adds that, “As cloud computing, software-as-a-service and mobile devices are increasingly adopted, mobile apps solely based on improving the productivity of the corporate professional are finding their way into the business world.”

“The important thing for CPAs and finance pros to grasp is that the world is moving towards mobile apps; we have to watch what our clients, companies and competitors are doing in order to stay up-to-date and preferably a step ahead,” says Telberg “The fact is, if you need up-to-the-minute information and you’re out of your office, you need mobile capabilities; our clients expect it, our stakeholders expect it, and our bosses expect it In this 24/7/365 world, you can’t afford to be out of touch ”

So whether you’re already running mobile apps for business solutions or only just venturing into the many offerings out there, these six applications are sure to give your worklife a boost

Ascendo DataVault Password Manager

“What’s going to become increasingly important for organizations to understand is data security and how to securely contain sensitive data on mobile devices,” says Wilkerson

Luckily, Ascendo DataVault Password Manager (iPad/iPhone, BlackBerry, Mac OS, Windows) offers a simple solution Ideal for individuals and businesses alike, this password management system allows you to safely store sensitive data such as credit card numbers, PIN numbers, insurance information, usernames, etc on your desktop computer and mobile devices

Utilizing numerous customization options, you can build, organize and search your database of personal or business-related sensitive information quickly and easily. And to ensure

you always have up-to-date information at hand, this app synchronizes data between your mobile and desktop devices

A s c e n do D a ta V a u l t P a s s w o r d M a n a g e r pr i c i n g v a r i e s a c c o r di n g to pl a tf o r m a n d package bundl e V i si t ascendo- i nc com for more i nformati on

Panoramic Financial Calc

P a n o r a m i c F i n a n c i a l C a l c P r o ( i P h o n e / i P a d , Wi n d o w s M o b i l e , Wi n d o w s P h o n e 7 , P C D e s k t o p ) o f f e r s 1 0 f i n a n c i a l w o r ks h e e t s a n d t w o s t a t i s t i c a l w o r k s h e e t s f o r linear and exponential regression calculations, graphing and analysis

Additional features include 10 calculator worksheets to help solve common financial problems; five display options; five calculator modes; copy-and-paste functionality to transfer results to programs such as Excel and Word; easy-to-use touch-menu systems for quick and intuitive navigation with touch-screen devices; a Record Tape option to output a text record of all calculations for later review; five custom skins; and “Smart Input” technology, which prevents you from entering invalid expressions, etc

The cost for downl oad i s $7 99 for i Phone/ i P a d a n d W i n do w s P h o n e 7 u s e r s a n d $9 99 for PC Desktop and W i ndow Mobi l e users V i si t panorami csoft com for detai l s

LogMeIn

“A mobile application’s purpose for being is to give you at-hand access to information and ultimately the ability to act upon that information wherever you are,” says Wilkerson And whether you need access to one or 1,000 computers, LogMeIn has a remote access solution that will get the job done LogMeIn Ignition (iPad/iPhone, Android, Windows), for instance, turns your mobile devices into remote controls for enabled computers, allowing you to run and access all applications and files as if you were sitting at your desk.

L og Me In re mote a c c e ss sol uti ons pri c i ng vari es accordi ng to pl atform and package V i si t l ogmei n com for more i nformati on

Salesforce.com

Cloud-based business solutions such as Salesforce com have powerful mobile applications Salesforce Mobile (iPhone, BlackBerry, Widows Mobile) and Salesforce Chatter Mobile (iPhone/iPad, Android, BlackBerry) included

Salesforce Mobile provides access to relevant customer data at any time Finance

professionals can utilize their smart mobile devices to quickly run financial reports and view dashboards to keep pace with the latest performance metrics

Salesforce Chatter Mobile is a social netw o r k i n g t o o l t h a t p r o v i d e s a p r i v a t e a n d secure platform through which co-workers r e c e i v e s t a t u s f e e d s a n d l i v e u p d a t e s , ensuring they are up-to-date on important business developments

Sal esforce Mobi l e and Sal esforce Chatter

Mobi l e are free for Sal esforce com customers V i si t sal esforce com i f you are not a customer for free tri al s and more.

Bloomberg

F o r t h e l a t e s t - b r e a k i n g , n o - f r i l l s b u s i n e s s and stock market news, busy business and finance professionals really can’t go wrong with Bloomberg’s free mobile app (iPhone/ i P a d , A n d r o i d , B l a c k B e r r y, N o k i a ) A t a glance, users can see Bloomberg’s top headlines, check market fluctuations and assess how their stock portfolios are faring. V i si t bl oomberg com/mobi l e for more i nformati on on thi s free app

Expensify

The traditional method of saving, tallying and submitting paper receipts, maps and reports is extremely time-consuming for time-pressed professionals on the go. Instead, individuals, consultants and companies are turning to Expensify (iPhone/iPad, Android, BlackBerry, WebOS Palm) for cloud- and mobile-based expense-tracking and reporting solutions

Expensify allows you to sync credit cards and bank accounts in order to pull in expenses, upload images of receipts, log mileage via uploaded maps, automate recurring expenses, receive direct-deposited reimbursements, and create expense report rules and requirements

To keep the figures straight, Expensify’s a c c o u n t i n g f u n c t i o n s s y n c h w i t h Q u i c kB o o k s , e x p o r t s i m p l e s p r e a d s h e e t s , a n d create customizable reports for use in other accounting and finance cloud and software solutions from FreshBooks, Google, Microsoft, Salesforce com, NetSuite and Sage Ex pensi fy [ ex pensi fy.com] i s free to consul tants and personal users Company use i s l i mi ted to two free users; each addi ti onal user i s $5 per month duri ng the months they submi t an ex pense report

to the following advertisers who exhibited at our 2011 Midwest Accounting & Finance Showcase.

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As information technology trends such as cloud computing and virtualization change the IT delivery model, CFOs are being asked to bridge the divide between systems and strategy.

By Kristine Blenkhorn Rodriguez

MIND THE GAP

Steve Romero remembers a time long ago, one in which the CFO of most large organizations paid little attention to the IT department The “IT g u y s ” ( a n d y e s , b a c k t h e n m o s t o f t h e m w e r e m e n ) d w e l l e d i n c u b i c l e s s o m e w h e r e b e n e a t h the main executive floor a far cry from today’s portable office in a laptop You called IT only if you got an error message that wouldn’t go away, no matter how hard you pounded the keyboard The IT budget was relatively small, used mainly to purchase hardware and software licenses and fund a team of “fix-it” technicians.

R o m e r o , t h e I T G o v e r n a n c e E v a n g e l i s t ( y o u r e a d t h a t c o r r e c t l y ) a t C A Te c h n o l o g i e s a n d author of El i mi nati ng “Us and Them”: Maki ng IT and the Busi ness One, says his mission is to help e n t e r p r i s e s r e a l i z e t h e f u l l p o t e n t i a l o f t h e i r I T investments So, while appearing firmly entrenc h e d o n t h e t e c h n o l o g y s i d e , h e t h i n k s l i k e a c-suite executive one that talks with the speed of a bullet train And while he remembers the old days, he is glad they are long gone

The Power Shift

Why IT’s transition to the CFO’s domain? Largely, because of big IT budgets

“Generally, when the CIO reports to the CFO, it’s because IT is looked at as a cost to be managed That’s old school That may be because you have a company with a dated view of the world Or it may be because you have a CIO who describes everything in technical terms rather than in terms of business value Either way, not so great IT needs to be viewed as a means to meet enterprise goals, as a competitive advantage and as a source of innovation ”

As a CIO with the Center for Systems Innovation (c4si), Michael H u g o s s e e s t h a t m a n y o f h i s p e e r s a r e d o w n g r a d i n g t h e i r o w n influence because they still view their job as being to build a great corporate website rather than using IT to shore up core competencies and execute the business model

“Installing the new Windows upgrade makes you overhead, and the trend of downward influence continues . . . Don’t get stuck tinkering with the technology. Use it to make or save the company money,” he cautions

Author of Busi ness Agi l i ty: Sustai nabl e Prosperi ty i n a Rel entl essl y Competi ti ve W orl d, Hugos used this philosophy as CIO of a national cooperative of distribution companies, developing a suite of supply chain and eBusiness applications that transformed the company’s operations and revenue model

“I went out with the salesforce and spent time with our biggest customers,” he says “I found all sorts of ways to provide new services and cut transactions costs I found ways to increase the value of the products we delivered to our customers. I had delegated the running of servers and patching of software; that’s not a CIO’s task.”

Although he experienced pushback from other company executives, he went on to win the CIO 100 Award twice for boldness and resourcefulness and the Informati onW eek 500 Award for innovation

“The role of IT is to increase the business agility of a company. The agility dividend is usually about 2 to 4 percent. You have to find it as a CIO CFOs expect it,” he says

Hugos is right, if a 2011 Gartner and Financial Executives International study is anything to go by The study of 344 North American executives across a variety of industries found that only 25 percent of CFOs see the CIO as a key player in determining business strategy The study further states that 42 percent of IT organizations now report to the CFO and that number is expected to rise For the majority of executives surveyed, business partnering a n d s o u n d p r o j e c t m a n a g e m e n t c o n t i n u e t o h a v e m o r e o f a n impact on IT investment success than technological prowess. Senior financial executives were asked how to ensure that the relationship between the business and IT is successful and effective Their responses pointed to a clear ownership of the project (38 percent), the business case for the project (37 percent) and the project management (36 percent), all business issues that apply to any area of the company, not just IT.

“Clearly, these results indicate a more educated CFO who wants to leverage the technology portfolio more than has been done in the past,” says Gartner analyst John Van Decker “Many times the emphasis of IT is around technologies rather than close to the business If you’re not going to get close to the business as a CIO, you’ll alienate yourself.”

Van Decker adds that in times of economic downturn, particularly if IT has become a “runaway cost center” in the eyes of a CFO, the reins are held more tightly. A CFO’s oversight becomes a cautionary measure to ensure cost effectiveness

And yet, a 2010 IBM study of more than 1,900 CFOs flies in the face of the increased number of CIOs reporting to CFOs While 74 p e rc e n t o

h e enterprise is a major priority for them, only 39 percent say they’re good at doing that Anyone sensing a disconnect? Perhaps a need for couples counseling in the c-suite?

Business-altering Technology Trends

Which technology trends are savvy CFOs watching? Cloud computing is the one unilateral response from our experts, with virtualization and social media running a close second and third

“It’s all about the consumerization of IT,” says Romero “As a CFO, you’ve got to understand the implications of that in order to ask the right questions of your CIO ”

For those of you about to Google the phrase, we’ll save you the time. At its most basic level, the consumerization of IT is the introduction of consumer-oriented technology and behaviors into the realm of enterprise IT. Employees are now integrating technologies like iPhones, Flip Video cameras, Skype, Facebook and Twitter originally consumer-targeted technologies into the workplace Convenience Flexibility Connectedness All are increasing in the consumer arena thanks to new forms of technology; and we are now expecting the same at work Customers and clients are wielding power like never before (If you’re a nonbeliever, simply think of the last time you saw a company trashed on Facebook or Twitter via viral vitriol it’s not pretty )

Fueling this consumerization of IT is cloud computing, a technology that allows companies to pay for capacity as and when they need it a vast change from the old days of intensive capital investment in servers to handle peak loads (even if those peak loads occurred only once or twice a year) As CIO magazine put it in its June 14 article, “How the Cloud Changes the CIO–CFO Conversation,” because of cloud computing, “what was once a capital expenditure pitch [from the CIO to the CFO] has suddenly become an operational one, highlighting IT costs in starkly different terms Paying for software and services ‘by the drink’ really drives home just how thirsty your users have become.” In other words, when capital spending becomes a predictable operational expense, IT departments become service providers that facilitate a process rather than a part of the infrastructure. Forward-looking CIOs have already changed their thinking in this respect, says Romero

Zoovy CFO Tom Saftig relies on his CIO to identify technology hot spots for him However, it’s then up to Saftig as CFO to do the due diligence. “If your company is in rapid-growth mode and your CIO is telling you that it needs a block of servers, your job is to question that without being offensive. Do we need them? What are the alternatives? If we do need them, what peripherals come as part of the package and how much do those cost? It would be nice if you could just trust cart blanche, but you will always have to know enough to ask the right questions ”

Romero puts it another way: “Delegation is not synonymous with abdication You still need to know the average spend for your industry and why what your CIO is requesting is above or below that.”

Grasping IT Standards

While most CFOs shouldn’t have to be experts in IT standards, a basic understanding of them and their potential impact on the finance function is an absolute must Here’s a primer:

Public Key Infrastructure (PKI). PKI is a computer security architecture based on message encryption It allows executives t o e x c h a n g e p r i v a t e i n f o r m a t i o n o v e r public networks.

Electronic Data Interchange (EDI). EDI forms the foundation of B2B eCommerce

e X t e n s i b l e M a r k u p L a n g u a g e ( X M L ) X M L w a s c r e a t e d b y t h e

Worldwide Web Consortium (W3C) to allow users to load data from incompatible systems without crashing their computers

eXtensible Business Reporting Language (XBRL). Based on XML, XBRL allows executives to find and extract business reports based on semantic meaning, saving hours of searching with the naked eye.

Payment Card Industry (PCI). A set of standard security processes instituted by credit card providers to protect cardholder information

Advanced Encryption Standard (AES) Adopted by the US government, this standard consists of symmetric-key encryption.

Structured Query Language (SQL). A computer language designed to manage data in relational database management systems

What’s a CFO to do?

A productive CFO-CIO relationship marries the business plan with technologies that will enable and even revolutionize processes to make them faster, cheaper and smarter To achieve that productive relationship, our experts suggest that you,

Get to know each other. While it sounds oddly old-fashioned in t o d a y ’s o n l i n e

a y toward smoothing the road for future success Step away from the keyboard, put your PDA away, and opt instead to meet with your CIO face to face

Make it clear that systems support strategy. At the same time, i

a l k s s o t h a t h e o r s h e becomes a vested stakeholder in its success

Learn about the cloud and virtualization. Technology trends come with the rapidity of a dust storm, and you’ll have to know enough to ride them out and through to success

Ask your CIO how IT standards affect finance. Ensure the bases are covered in a way that won’t come back to bite you

Embed IT in your business. If your IT group is still a knot of people sitting somewhere in a cubicle, you’re behind the times “You need to embed technology people in the business units, but technology people who speak your language and ‘get’ strategy,” says Hugos “Without people on the ground for you, you are fighting a now i n

t o know the parts of your business as well as they know technology That’s when the real magic happens ”

cultural re-

Recognize a corporate culture that doesn’t work – and then rebuild it

By Deborah Lane

You can’t put your hands on corporate culture, but it’s there, an invisible force that can decide a company’s success or failure.

“Organizational culture is probably the most important, most powerful force in any corporation Because culture constitutes the lessons of the past, it provides the template for how to behave in the future. Once a corporation loses sight of its culture, it’s only a matter of time before it slams into a brick wall,” says Stephen Balzac, president of consulting firm 7 Steps Ahead

Culture is not some abstract concept, “It is absolutely crucial When you have complex organizations in which people may be dispersed all over the world, culture is the only glue that holds everything together,” says Rita McGrath, associate professor at New York’s Columbia Business School Certainly, there’s buzz about corporate culture in the boardroom, the c-suite and all the way to the mailroom Those companies that get it right have a distinct competitive advantage.

If your culture needs a makeover or even a tweak, there’s no time like the present to get the wheels turning

W H Y C U LT U R E M AT T E R S

In David Wolfe, Jag Sheth and Raj Sisodia’s 2007 book, Fi rms of Endearment: How W orl d- Cl ass Compani es Profi t from Passi on and Purpose, the authors contend that companies focused on culture returned 1,025 percent to their investors over a 10-year period, compared to 122 percent for the S&P 500.

What’s more, new research from Deloitte suggests a powerful link between volunteerism and an employee’s positive perception of his or her employers For example, Millennials who frequently participate in their company’s volunteer activities are two times more likely to rate their corporate culture as very positive, compared to Millennials who rarely or never volunteer (56 percent versus 28 percent) They are more likely to be proud to work for their company (55 percent versus 36 percent) and more likely to feel loyalty towards it (52 percent versus 33 percent). The research shows that a commitment to sustainability, creating a fun work environment and putting a high priority on corporate responsibility and volunteerism matter a lot to this demographic.

Furthermore, a recent Maritz Poll found that almost three years after the worst economic downturn since the Great Depression, employees’ deep distrust of company management lingers Despite a slight improvement in business conditions, the American workforce remains less engaged with their employers than they were a year ago Poor communication, a perceived lack of caring, inconsistent behavior and perceptions of favoritism were cited as the biggest reasons for their lack of trust in senior leaders

“A strong indicator of management mistrust is lack of shared values. Companies must align those overall values as an organization with those individual values of their people. Knowing that you work for a company whose values are similar to yours drives loyalty and strengthens trust,” said Rick Garlick, Ph D , senior director of strategic consulting and implementation, Maritz Hospitality Research Group, in a prepared statement

Culture has always been important, but in today’s world it has taken on new meaning, says Linda Henman of consulting firm Henman Performance in Town & Country, Mo “People no longer perceive that they must stay in a bad or uncomfortable position just because their father worked there or because they have always worked there As the economy improves and the music starts, the game of musical chairs will begin anew. The best and brightest will be the first to leave and the hardest to replace,” says Henman.

A toxic culture will drive out A players, adds Kathryn Kehoe, managing director, CMF Associates, who leads the firm’s organizational design and talent acquisition services in Philadelphia And in this age where social media rules, you can ill afford to have your company the subject of negative Facebook or Twitter fodder

S I G N S O F A N U N H E A LT H Y C U LT U R E

Simply put, culture is a pattern of shared beliefs that a group has developed over time to address its unique challenges and opportunities. These beliefs have worked well enough to be considered valid and, therefore, important enough to be taught to new members as the correct way to address important issues, says Henman The question is, how do you know if your culture needs reworking? There are plenty of red flags, including:

n An increasingly large percentage of voluntary turnover. “Efforts to solicit feedback from the workforce can yield valuable information on how employees perceive the workplace and can identify areas to address,” says Anne Dahlgren, Midwest region talent leader in Deloitte’s Chicago office “We conduct an annual employee satisfaction survey that provides us with direct input from our workforce on what we’re doing well, areas that need to be evaluated and ideas for improvement.”

n Leaders who don’t practice what they preach For instance, l e a d e r s m a y c o n t i n u a l l y d e m a n d t e a m w o r k f r o m d i r e c t reports, but never reward these efforts, choosing instead to set u p d e p a r t m e n t a l c o m p e t i t i o n t h a t e n c o u r a g e s k n o w l e d g e hoarding and silo thinking

n The company rumor mill is viewed as a source of credible, reliable information.

n More energy is spent on procedural items than on actually g e t t i n g t h e w o r k d o n e S i m i l a r l y, w h o p r o d u c e s t h e w o r k becomes more important than the quality of the work

n Employees are exhibiting passive-aggressive behavior, such as agreeing to do things that they never follow up on.

n Employees maintain an emotional affiliation with a former company (as in a merger or acquisition, where the primary identity is with the former organization)

n Staff is risk-averse and unwilling to try new things

n Staff is focused on pleasing the boss, rather than doing what’s right for the company.

Quite frankly, “If your organization isn’t succeeding at whatever it aims to do, the culture of the organization should be examined I f t h e k i n d o f p e o p l e y o u w a n t t o h i r e a r e n ’t a t t r a c t e d t o y o u r organization, or leave soon after they’ve been hired, you might need to do some culture work to keep them around or engaged If there’s a general sense of frustration or cynicism, or if people who have been around for awhile consistently (and loudly) long for the ‘good old days,’ there might be the need to do some work on your organizational culture,” says Eric Peterson, manager, Diversity & Inclusion with the Society for Human Resource Management in Alexandria, Va

That said, it’s not really so black and white. “What may be ‘right’ for one organization may be ‘wrong’ for another. It all depends on your mission, and what your organization is set up to do,” says Peterson For example, McDonald’s has a very strong, almost rigid culture, partly because it’s important that the Big Mac you buy in upstate New York tastes exactly the same as the one you buy in Texas, Minnesota, or Hawaii, says Peterson. “Organizations that depend on constant innovation would not thrive with that kind of culture,” he explains

W H AT A B O U T T H E G E N E R AT I O N G A P ?

Sometimes culture clash comes down to generational differences among colleagues

“Let’s start with the elephant in the room: the Gen Y myth this whole concept that Gen Y is somehow less dedicated and less motivated than Gen X or Boomers,” says Balzac “What is different is that Gen Y doesn’t share the cultural beliefs that you graduate from college, work at one job for 40 years, and retire to enjoy your golden years While it was a valid cultural belief at one time, it’s no longer valid in the current environment and shows no sign of regaining validity. Younger employees are less deeply immersed in the culture; they’ve had less time to absorb it and to assume its values Which means they’re more likely to propose ideas and approaches that older employees view as violating cultural values and hence are more likely to reject,” says Balzac

Since the older employees typically have more authority, younger employees are more likely to be left feeling frustrated How they cope with that, however, will be strongly influenced by their generational cultural values. A Boomer or X’er might decide that if they stick around and pay their dues, they’ll get a voice in due time; a Gen Y’er is probably more likely to go somewhere else One solution is not inherently better than another, says Balzac.

What’s more, explains McGrath, “For the Depression-era generation, values such as thrift and reliability were key For Boomers, it’s ambition, advancement and a work hard/play hard style. For Gen X’ers, it’s individual security and promote-ability For the Millennials, it’s about feedback, the chance to hone skills and rise quickly, and a tremendous amount of individual autonomy Put all those different ideas of work in one organization and you can have massive disconnects.”

“Differences between generations can affect the way organizat i o n s r e c r u i t a n d b u i l d t e a m s , d e a l w i t h c h a n g e , m o t i v a t e a n d manage people, and boost productivity and service effectiveness,” Dahlgren adds

A large percentage of Deloitte employees are members of Gen Y, she says. In order to give a voice to this segment of the workf o rc e , D e l o i t t e c r e a t e d a G e n Y C o u n c i l t h a t c r e a t e s d i a l o g u e a r o u n d g e n e r a t i o n a l i s s u e s a n d s e r v e s a s a s o u n d i n g b o a r d f o r major organization-based initiatives.

Another solution, says Peterson, is to manage expectations “No matter your generational cohort, an employee wants to know exactly what their employer expects of them and what they can expect from it An organization that has a clear-eyed view of what kind of culture it needs and is blunt about framing that culture for its employees will fare better with a multigenerational workforce than one that is less transparent and trying to be all things to all people ”

HOW TO BE AN INNOVATOR

I n n o v a t i o n i s w h a t s e p a r a t e s o n e c o m p a n y f r o m t h e n e x t . T h e power of innovation drives profits But how can you best develop creative, idea-generating, strong teams?

It starts and ends with trust, says Michael Bechara, managing director of the Granite Consulting Group in Brewster, NY. “Being a part of the team means ceding a portion of your autonomy (and credibility) to another People cannot really function as a team

THE WRONG WAY TO CHANGE CORPORATE CULTURE

Balzac highlights some of the biggest mistakes, including:

n Striving f or per fec tio n For example, “We must make the per fect mousetrap, which works until someone comes along with a cat ”

n Se ek i ng to pro tec t. For example, propagating a sentiment of, “We must not hur t our existing products ” “Pity our competitors don’t feel that way,” says Balzac

n Focus ing too hea vily on identity For example, “We’re an X not a Y. IBM was a serious business company in the 19 8 0 s T h ey d i d n ’ t ‘ d o g a m e s ’ N ow t h ey ’ r e h e av i l y involved in serious gaming,” Balzac points out

n B uy in g in to th e “C r ee pin g B ox” sy nd ro m e The notion that, “We’re so far outside the box no-one can catch us Just ask Yahoo! Once you move outside the box, the box grows and suddenly you’re back in the box ”

Culture change isn’t a precise, surgical operation You have to take the time to really understand the values and assumptions that are no longer valid, and then build up a new set of values and assumptions Most culture change fails because it tries to focus too narrowly on just one thing.

“Corporations go through a lot of pain and spend a lot of money only to experience a fleeting success before the culture rever ts back to the way it was,” Balzac warns “When you seek to change only one thing, ever ything connected to that one thing acts to pull it back to its original form ”

meeting or technology will change this,” he says

A culture of “all ideas are good ideas,” “ideas come from everywhere/everyone,” and “it doesn’t have to be perfect the first time round” undoubtedly will fuel innovation A risk-adverse, top-down culture does not, Kehoe warns

To encourage organizational innovation, Deloitte has invested $ 3 0 0 m i l l i o n i n D e l o i t t e U n i v e r s i t y, a l e a r n i n g a n d l e a d e r s h i p d e v e l o p m e n t f a c i l i t y n e a r D a l l a s t h a t w i l l o p e n t h i s y e a r “ I t i s designed to be a place where our people network and build relationships, grow together and develop as leaders It will be a powerful catalyst for lifelong learning and help to foster our culture of teamwork and our talent’s growth both personally and professionally,” Dahlgren explains.

Another key cultural factor in the race for innovation: A commitment to employee development. Don’t limit people to taking classes in their areas of expertise; rather, encourage them to study whatever interests them. “Innovation comes from putting together apparently disparate pieces of information,” says Balzac

To encourage any behavior, you need to reward it, both tangib l y a n d i n t a n g i b l y, a d d s H e n m a n “ L e a d e r s o f t e n o v e r l o o k t h e cheapest and most effective way to reward: simple compliments. Leaders should also reward attempts that fail Above all, you can’t punish mistakes if you want to create a learning, innovative environment,” she warns

C o m p a n i e s f o c u s o n i n d i v i d u a l p e r f o r m a n c e a n d i n d i v i d u a l reward “As a result,” says Balzac, “they get a bunch of individua l s o f t e n c o m p e t i n g f o r a l i m i t e d p i e . W h i l e i t ’s i m p o r t a n t t o acknowledge and reward individual contributions, that can’t be all that you reward, and it should never be set up in a way that creates competition among team members ”

CORPORATE CULTURE & ITS INFLUENCE

Culture is broad, and it is far-reaching. “If the organization just added transgender individuals to its non-discrimination policy, I don’t have to be transgender to feel the effect of that policy change. I know that I work for an organization that values people as they are and wants to ensure that employees can be their true selves....And I’ll probably be more willing to share (my) idea,” says Peterson

Does the organization practice what it preaches? “The number one intangible involves boss behavior Most people leave their bosses, not their jobs or their companies. Organizations that model and demand respectful interpersonal behavior from their employees, and punish or replace those who don’t exhibit it, take great strides in doing one of the most important things to retain stars Top performers won’t put up with temper tantrums, bad language and fear tactics, and they won’t stay in a culture that either allows it or encourages it,” says Henman.

It’s not enough to talk the talk; from top to bottom, everyone must walk the walk. Say the company professes that it’s committed to volunteerism, yet employees who volunteer their time are paid less or promoted less frequently than those who spend all their time at their desks; then volunteerism is devalued and eventually will fade out

“The behavior that is rewarded will become part of the culture, and the culture will attract those who believe in the values manifested through the behavior,” says Balzac

Failure to Launch?

How to start a business in a stalled economy.

By Carolyn Kmet

While the economy struggles to recover in fits and spurts, the entrepreneurial spirit remains undiminished According to a report released by the U S Small Business Administration (SBA) in April 2011, small businesses’ demand for loans increased through the fourth quarter of last year This demand may be driven by lending standards, which although stricter than they were pre-recession, have gradually relaxed over the last three quarters of 2010.

According to the report, “After several years where concern for survival outweighed any inclinations to expand, small businesses’ strengthened loan demand sends a strong signal that they are now looking to expand.”

Kris Petersen is the CEO and founder of Chicago-based DealsGoRound, a secondary marketplace where consumers can resell and buy past daily deals from companies like Groupon and Living Social The idea was born in March 2010, when Petersen missed the opportunity to use four Segway tours that he bought from a daily deal provider Within the first month, DealsGoRound made the front page of The New Y ork Ti mes technology section

“ G r e a t i d e a s t h r i v e r e g a r d l e s s o f t h e e n v i r o n m e n t , ” s a y s Petersen. “It’s the good to mediocre ones that have a significantly harder time catching a glimmer of attention ”

Which is unfortunate, he says, since a lot of great companies start out as average to mediocre ideas At the end of the day, true success is determined by the entrepreneurs themselves and the team behind the idea “A mediocre idea with a great team behind it, given the chance, can become phenomenal A great idea with a sub-par team is destined to fail,” Petersen cautions

And so, if DealsGoRound’s experience is anything to go by, the venture capital well is not yet dry. Just about a year after its launch,

DealsGoRound secured funding (reported to be in the region of $500,000) from Chicago-based Lightbank. “It all starts with the idea, right?” says Petersen “If your idea is no good, you’re not even getting in the door “

He is quick to point out, however, that technology funds look for more than just an idea “With the speed at which an idea, even a rough prototype, can be developed, venture capitalists want to see some sort of traction before having any serious conversations,” he says.

Securing venture capital isn’t the only financing option available to entrepreneurs these days. “Access to capital is always a challenge, but the well-prepared, well-organized and committed entrepreneur succeeds more often,” explains Penny Pickett, associate administrator for entrepreneurial development with the SBA Pickett encourages entrepreneurs to consider a range of options when raising capital “Personal savings or help from family and friends are often the first sources of cash to launch Many companies need no more than microloans, up to $50,000, through an

SBA intermediary Bootstrapping a company or SBA guaranteed loans are other options,” she explains

In order to fund startup costs out-of-pocket, many entrepreneurs w o r k f u l l - t i m e w h i l e l a u n c h i n g t h e i r n e w b u s i n e s s . “ M y b e s t advice to someone wanting to start up today would be this: Get as far along in the startup process as possible while still employed,” says Edward Carrick, owner of Performance Analysis, a Louisianabased startup consulting firm “While this may not be ideal for every situation, it can be invaluable for small startups with not a lot of cash to get going ”

Setting up a website, coordinating traditional and internet-based marketing, writing a business plan and meeting with mentors are all attainable goals without interfering with a regular day job, he says “By getting the wheels turning and momentum going before jumping in with both feet, it’s almost like giving yourself a head start that will help to propel your success ”

Michelle Waldorf is the founder of eSeller Street, Inc , which d e v e l o p s s h o p p i n g r e s e a rc h s i t e s s u c h a s Wa t c h e d I t e m . c o m .

When evaluating funding options, Waldorf decided to go the bootstrap route and fund her venture entirely with her own capital. Prior to starting her company, Waldorf held senior positions in both the marketing and engineering departments at Tellabs, Westell and Sola Electric. She also holds both a Masters in Electrical Engineering from Illinois Institute of Technology and an MBA from Northwestern University’s Kellogg School of Management.

“Experience in the business world guides you to hire the right people, make the best decisions when you are facing a disaster, and gives you the tools to take over any job if someone leaves The desire to learn will help you achieve mastery over your niche,” Waldorf explains.

“This is a great time to start a new business because the expense of running a tech company is low,” she says. Indeed, while financing standards are still tighter than they were prior to the internet boom and bust, the capital market is likely to be more accessible than aspiring business owners may initially expect A lot of this is due to the technological revolution

“There is less money available due to the tightening of capital in 2008,” explains Michael Moradzadeh, managing partner and co-founder of Rimon Law, a San Francisco-based global law firm. “However, financing is much less of an obstacle now than it has ever been since cloud computing and the internet in general have made operating a business cheaper than ever.”

Costs are low for more than tech companies In 2006, Naked Pizza opened its first storefront in a 500-square-foot building that took six feet of water during Hurricane Katrina Naked Pizza’s m i s s i o n i s t o c o m b a t o b e s i t y a n d c h r o n i c d i s e a s e b y m a k i n g pizza healthy Think 10-grain crust and no-sugar-added sauce

Co-founder Robbie Vitrano explains that, “The bottom of the recession was the perfect time to launch a mission-based fast food company, Trojan horsing a $50-billion industry sector ” He adds that the company was founded during a time when consumers were searching for a means to redeem their faith in large corporations “The appetite for change, specifically more conscionable behavior by business, was high,” he says “The social and economic impact of unhealthy lifestyles was becoming increasingly documented and noticed, and investor money was pulled from the tanking stock market ”

Vitrano and his three co-founders saw this shift in the environment and knew it was the right time to strike “The 50-year-old pizza delivery model was begging for disruption not reinventing t

needed modernizing,” Vitrano explains

Today, Naked Pizza has 15 locations, including two in Dubai (UAE) By the end of 2011 it expects to have up to 75 locations, including in New York City, Washington D C , Boulder, Denver and Princeton.

I n t e r m s o f h o t b e d s o f a c t i v i t y, Wa l d o r f o b s e r v e s t h a t t h e mobile arena has opened up a whole new playground for entrepreneurs in the form of app development. “I think it’s easier for tech companies that develop apps to gain traction because people are in an exploratory mood due to the popularity of smart phones,” she explains.

The opportunities are there, but the environment is a risky one M o r a d z a d e h a d v i s e s a d d i n g 2 0 p e rc e n t t o a n t i c i p a t e d s t a r t u p b u d g e t s “ T h e n , w h e n f a c t o r i n g i n c o m e , d i v i d e i t b y t w o a n d assume it will take you twice as long to come in as you originally estimated. Be prepared to constantly amend the business plan and allow your company to evolve Flexibility is the key to a very successful business,” he says

Another key to success is developing a healthy support network w i l l i n g t o l e n d f u n d s , s u g g e s t c o n t a c t s a n d s h a r e e x p e r i e n c e “Building a network is invaluable to any new business,” says Pickett. “The network becomes a significant source of support, information and introductions to others, including advisors, mentors and counselors, accountants and lawyers, bankers and investors, etc ”

Moradzadeh suggests putting together a formal board of advisors early on in the game “Get people you really trust who can check your assumptions and help you constantly improve your concept,” he urges.

This is where the SBA comes into play The agency has an extensive network of resource partners that it makes available to small businesses throughout the country. Pickett rattles off a few examples: “Nine-hundred-and-fifty Small Business Development Centers, 110 Women’s Business Centers, 350 chapters of SCORE volunteers who provide training and counseling Counseling is free and training courses may have a small fee to cover costs ”

Really, when it comes right down to it, whatever the economic climate, it all starts with a business plan you simply can’t say no to “A well-prepared business plan demonstrates that the entrepreneur has thought through all the steps and changes a business will e x p e r i e n c e i n l a u n c h i n g t h e c o m p a n y, ” P i c k e t t e x p l a i n s S h e acknowledges that a business plan will evolve and change, but says the original plan will serve as a blueprint for growth. “Talking to lenders too early or without solid, well-documented preparation makes a poor impression and is usually unsuccessful in getting capital,” she points out.

What’s more, “Don’t rationalize away your failures Unfortun a t e l y, t h e a b i l i t y t o d o t h i s s e e m s t o b e b u i l t i n t o o u r D N A , ” Petersen explains. “Set measurable goals and use data to gauge y o u r s u c c e s s I f y o u d o n ’t , y o u ’ r e s u r e l y g o i n g t o b e w a s t i n g money and time ”

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