Insight Magazine - Fall 2012

THE RACE IS ON CORPORATE FINANCIAL LEADERSHIP

Having trouble staying on course in the windy city? We can help.

The turbulent economy continues to hit home for businesses and professionals in the Chicago area. But, as the local experts in financial recruiting and staffing, we can help you get ahead no matter which way the winds are blowing.

Our intimate understanding of the local job market, salary trends and business climate helps us connect great talent to great companies better than anyone else in Chicagoland. To find out more, visit us online or call your local office.

FIRST WORD

A Ti m e t o G i v e T h a n k s

As the Thanksgiving and holiday season quickly approaches, I wanted to take a moment to personally express my gratitude and publicly acknowledge the volunteer leaders who generously contribute their time and expertise to the Illinois CPA Society

From our Board of Directors to our Chapter Presidents & Committee/Task Force Chairs, the ICPAS leadership is a diverse and impressive group of CPAs.

Thanks for all that you do to strengthen both the CPA profession and the Illinois CPA Society

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

Chair

James P Jones, CPA

Edward Don & Company

Vice Chair

William P Graf, CPA

Deloitte & Touche LLP

Secretary

Edward J Hannon, CPA, JD Freeborn & Peters LLP

Treasurer

Daniel F Rahill, CPA, JD

KPMG LLP

Immediate Past Chair

COMMITTEE CHAIRS

Accounting Principles

Jeffery P Watson Blackman Kallick LLP

Scott G Lehman* Crowe Horwath LLP

Audit & Assurance Services

James J Gerace BDO USA , LLP

Elizabeth J Sloan

Grant Thornton LLP

Employee Benefit Plans

Janice Forgue McGladrey LLP

Ethics

George Heyman

Retired - Oakton Community College

Gary E Kemnitz* Mueller & Co LLP

Financial & Treasury Management

Daniel F Rahill

KPMG LLP

Government Executive

Irwin A Lyons Miller Cooper & Company Ltd

Governmental Report Review

Gregory A Dunham

Wipfli

Illinois CPAs for Political Action

Lawrence A Wojcik

DLA Piper US LLP

Nominating

Robert E. Cameron

Cameron, Smith & Company PC

Not-for-Profit Organizations

Kimberley A Waite

Frost Ruttenberg & Rothblatt PC

Peer Review Report Acceptance

Gregory J. Pierce

Pierce Riesbeck & Associates

Catherine L. Allen*

Guthoff Mehall Allen & Company PC

Regulation & Legislation

Sheldon P Holzman

Retired - Baker Tilly Virchow Krause LLP

Tax Advisory Group

Joseph F Bigane III

Wolf & Company LLP

Taxation Business

Andrea K Urban Optiver US LLC

Taxation Estate, Gift & Trust

Michael A Deering

Mowery & Schoenfeld LLC

Taxation Executive

Mary Lou Pier

Pier & Associates

Greg Ciokajlo*

Ciokajlo, Hein & Associates Inc

Taxation Flow-Through Entities

Jeff Rozovics

Rozovics & Wojcicki

Taxation Individual

David V Kalet

BP Products North America

Taxation International

Thomas B Murtagh

Wolf & Company

Taxation Practice & Procedures

Norris C Harstad

Benchmark Aspen & Associates Ltd

Taxation State & Local

Bradley H Greenberg

Silver Lerner Schwartz & Fertel, CPAs

Women s Executive

Wendy A Kelly

Corbett, Duncan & Hubly PC

TASK FORCE CHAIRS

AICPA/ICPAS Collaboration

Charles F G Kuyk, III

Crowe Horwath LLP

Committee, Structure & Volunteerism

Mary Ann Webb

Sulaski & Webb, CPAs

CPA Exam Award Program

Mark P Joyce

AmeriQuest Transportation Services

Diversity Initiatives

Scott D Steffens

Grant Thornton LLP

Industry & Business Advisory

Edward H Stassen

Lifetime Acheivment Award

Robert E Cameron Cameron, Smith & Company PC

Outstanding Educator Award

Kenton J Klaus

Deloitte & Touch LLP

Outstanding Leadership in Advancing Diversity Award

Kristen N Jolaoso

The Corvus Group Inc

Women s Initiatives

Paula A Galbraith

Hubbard Galbraith

Young Leaders Advisory

Jared J Bourgeois

FTI Consulting Inc

Young Professionals Group

Sobia Farid

Deloitte & Touche LLP

Mark W Wolfgram

Grant Thornton LLP

MEMBER FORUM GROUP

Agribusiness

Jason S Bartell

Bartell & Barickman

Futures, Securities & Derivatives

Todd Briggs McGladrey LLP

Investment Advisory Services/PFP

Kevin Costello

Kevin W Costello, CPA

Not-For-Profit

Susan R Jones

Miller Cooper & Company Ltd

Taxation NW Suburban

Samuel Pass

Samuel Pass, CPA

CHAPTER PRESIDENTS

Central

Linda M Martin

Clifton Gunderson LLP

Chicago Metro

Sherman C Wright

Accurate Real Estate Assistance

Chicago South

Frank J McCauley

Retired

Fox River Trail

Marianne Phelan

Fox Valley

Larry E Navoy

Larry Navoy, CPA

North Shore

Burton W Goode

Burton W Goode, CPA

Northern Gerri Downing Siepert & Co LLP

O'Hare

Barbara M Monasky

Western

John T. Kustes

American Bank & Trust Company

CONFERENCE TASK FORCE CHAIRS

Accounting & Auditing (Chicago/Springfield)

Matthew G Mitzen

Blackman Kallick LLP

Advanced Topics in Flow-Through Taxation (Chicago/Peoria)

Jeffrey A Rozovics Rozovics & Wojcicki

Business Valuation

James S Kerwin

Kerwin Appraisal Associates Ltd

Construction

Catrina M Payne Miller Cooper & Company Ltd

Employee Benefits (Spring)

Nicholas Cheronis Verisight Group

Employee Benefits (Winter)

Kathleen A Musial BIK & Co LLP

Estate & Gift Tax

Eunice K Sullivan S & P Tax Solutions Ltd

Financial Forensic

Michael D Pakter Gould & Pakter Associates LLC

Financial Institutions

Brady J Nitchman

Plante & Moran PLLC

Fraud J Bradley Sargent Sargent Consulting Group, LLC

Government (Chicago/Springfield)

Linda S Abernethy McGladrey LLP

John L Eyth

Zumbahlen Eyth Surratt Foote & Flynn Ltd

Healthcare Compliance & Fraud

Howard L Stone

Stone, McGuire & Siegel

IRS Practice & Procedures

Harriet Jacobs Jacobs Tax & Consulting

IRS/Tax Practitioner Symposium

Harvey Coustan

Harvey Coustan LLC

Midwest Financial Reporting Symposium

David L Landsittel

David L Landsittel, CPA

Not for Profit - Chicago

Arthur Gunn

Arthur S Gunn, Ltd

Not for Profit - Springfield

Charlotte A Montgomery Illinois State Museum Society

Not for Profit Complex and Emerging Accounting & A-133 Issues

Howard I Blumstein

BDO USA LLP

State & Local Tax

David A Hughes Horwood, Marcus & Berk Chartered Tax

Michael N Radencich Trimarco, Radencich, Schwartz & Mrazek, LLC

Taxation on Real Estate

Douglas Hart Retired, DAD Associates LLC

Robert E Cameron, CPA

Cameron, Smith & Company, PC

I C P A S B O A R D O F D I R E C TO R S

Linda S Abernethy, CPA McGladrey LLP

Rose G Doherty CPA

Legacy Professionals LLP

John A Hepp, PhD, CPA

Grant Thornton LLP

Margaret M Hunn, CPA, CFE, CFF, CITP

Rozovics & Wojcicki

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

Retired, Navigant Consulting

Michael J Maffei, CPA

GATX Corporation

Marcus D Odom, PhD, CPA (inactive) SouthernIllinois University

Floyd D. Perkins, CPA

Ungaretti & Harris

J Bradley Sargent, CPA/CFF, CFE, CFS, Cr.FA

Sargent Consulting Group LLC

Marcus F Schultz, CPA

Dugan & Lopatka CPAs PC

Thomas L Zeller, PhD, CPA Loyola University Chicago

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

Publisher/ICPAS President & CEO Elaine Weiss

Editor-in-Chief/

Publications Director

Judy Giannetto

Creative Services Director

Gene Levitan

Creative Services Manager

Rosa Garcia

Publications Specialist

Derrick Lilly

National Sales & Advertising

Natalie Matter DeSoto

YGS Group, 3650 West Market

York, PA 17404

P: 800 501 9571 x127 F:

717 825 2171

E: natalie desoto@theygsgroup com

Circulation/Member Services Director

Carl Siska

Editorial Offices

550 W Jackson Blvd , Suite 900 Chicago, IL 60661

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 24,000 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,

means without the written consent of INSIGHT Permission requests may be sent to: Publications Specialist, at the address above

changes to: INSIGHT, Illinois CPA Society, 550 W Jackson, Suite 900, Chicago, IL 60661, USA

Established Entrepreneurs

The

throughout

client’s employee lifecycle including time and labor management, expense tracking, employee online self-service, COBRA administration, and applicant management.

Client Growing Pains

As your client grows, a competitive benefits package is essential to attracting and retaining necessary talent. Paychex offers integrated solutions for retirement plans and pre-tax benefits that work in concert with payroll.

New Business Formation

Paychex can provide help with federal/ state applications and new hire forms. Other than payroll, services include consultations on business and health insurance, workers’ compensation, employee handbooks and more.

SEEN HEARD

80% Percent of organizations that acknowledge their internal audit function has room for improvement. Ernst & Young

TREND WATCH: Women Boost Their Management Presence

Key findings of the 2012 Accounting MOVE Project Executive Report show that the “best” firms commonly offer programs designed to retain and advance women to middle -management and partnership, blend community service with professional development, increase productivity and customer retention through flexible work options, and increasingly improve communication about successful women ' s initiative programs internally and externally

The American Society of Women Accountants [aswa org] and the American Woman’s Society of Certified Public Accountants [awscpa org] recently named Chicago’s Baker Tilly as one of the 2012 “Best Public Accounting Firms for Women,” saying, “Baker Tilly got more than it bargained for in several local mergers and was smart enough to keep thriving women ' s initiatives intact and growing Fifty-five percent of all managers are women, providing more and more young associates with examples of diverse career paths at the firm ”

NEW TOOLS :

Private Company Indicator

Because there are no public reporting requirements for private companies, information on the current state of this crucial segment representing more than half of GDP and more than 65 percent of new job creation has been largely unavailable In response, Sageworks has developed the Private Company Indicator, which provides data on US privately held company profit and sales trends by aggregating approximately 1,000 financial statements per day in a cooperative data model Each metric’s monthly data point represents the trailing 3-month average for all privately held companies Visit sageworksinc com/private-company-indicator aspx for more

M&A Made Easy

The Accounting Practice Exchange has launched a new website designed to make it easier and cheaper to buy and sell an accounting or tax practice Through the Exchange, sellers can connect with potential buyers at a national level without employing a third party, while buyers can easily search for the latest opportunities in the marketplace Advertising rates on the Exchange start from as little as $99 versus the standard 15-percent brokerage fee

Visit accountingpracticeexchange com for more

FEATURED APP: Shoeboxed

The Shoeboxed app processes receipts, expenses and documents using high-accuracy scanning techniques, human data verification and the latest encryption to ensure data security Ultimately, a user ’ s account will house secure digital contact lists, organized receipt and expense documents, and IRS -accepted receipt images that allow users to create expense reports, maximize tax returns and manage all contacts from one location Visit www shoeboxed com to take a tour, get the app and learn about premium options.

$9.9 billion

Audit and non-audit fees paid by large public U.S. companies to their independent auditors in 2011 (the second highest annual total ever)

HOW TO : Caution: Bearish Bankers Ahead

Engage Millennial Staff

Studies like The 2012 Millennial Impact Report [themillennialimpact com] reveal that Millennials are socially and environmentally conscious, and therefore ideal candidates for employee volunteer programs

How should businesses engage them? VolunteerMatch’s

Volunteering Is CSR blog offers these three tips:

1 Offer professional development opportunities: Instead of focusing purely on the social importance of a cause, emphasize the professional benefits as well.

2 Prove your impact: Provide tangible evidence of the impact of your efforts, including videos and stats

3 Communicate clearly: Describe volunteers’ precise responsibilities, outline your company ’ s positive impact and keep communications concise

INSIGHT

Only 27 5 percent of bankers believe their local economy will improve over the next six months, says Grant Thornton LLP’s annual Bank Executive Survey The survey results reflect a stunning drop from the 44 percent of bankers who predicted improvements in 2011 What’s more, the number of bankers expecting their local economies to worsen rose from 6 percent in 2011 to 13 percent in 2012 The bearishness doesn’t stop there Only 13 percent of bankers now expect the nation’s economic outlook to improve, and 20 percent actually expect it to worsen Grant Thornton leaders attribute bankers’ attitudes to slow/stagnant global economic recovery, underwhelming job growth, high unemployment figures, and the increasing number and complexity of regulations In fact, regulatory compliance was cited as an ongoing issue by 94 percent of respondents, followed by margin pressures due to low interest rates (88 percent) and weak loan demand (67 percent) Overall, bankers are expecting an evermore challenging economy ahead For full survey results visit www.GrantThornton.com/banksurvey.

Wins Its 18th National Industry Award

The winter 2011 edition of INSIGHT Magazine, the magazine’s first ever Practice Management Special Issue, has been awarded the 2012 APEX Award for Publication Excellence in the category of Print Magazines & Journals The annual APEX Awards for Publication Excellence are sponsored by Communications Concepts, Inc. to give national recognition to publishers, editors, writers and designers who create print, web, electronic and social media communications across all industries and sectors For a complete list of INSIGHT awards visit the About INSIGHT section at www.icpas.org/insight.htm.

You can thrive. Or you can shrivel.

Lead YOUR life at FGMK.

YOU don’t want to just be an employee — You dream of working with an innovative team of colleagues who support YOU. Who inspire YOU.

YOU want to work in an environment that shapes YOUR career — and YOUR life. YOU want a competitive compensation package that includes incentives that recognize the value YOU provide.

YOU want flexibility — from how YOU schedule YOUR time, to the direction YOU grow YOUR career.

Grow. Thrive. Lead YOUR life at FGMK.

Candidates with 3-10 years in audit and/or tax public accounting experience, send your resume to Lee Singer, CPA, Managing Member at Lsinger@fgmk.net.

TAX DECODED

D e a l o r N o D e a l ?

Deal- of-the - day vouchers make sales tax a complex issue

By Keith Staats, JD

We’re all familiar with the deals to be had on Groupon, right? Well, in recent years, a number of companies that offer discount or “deal-of-the-day” vouchers have emerged, and with them various questions about state and local sales taxes

In a typical deal-of-the-day transaction, a r e t a i l e r c o n t r a c t s w i t h a d e a l - o f - t h e - d a y company, agreeing to provide its product or service whether limited or unlimited in n u m b e r a t a d i s c o u n t T h e d e a l - o f - t h ed a y c o m p a n y s o l i c i t s c u s t o m e r s t o p u rchase the voucher, entitling that customer to the agreed upon discount The vouchers usually are generated electronically, with the proceeds divided between the retailer and the deal-of-the-day company.

Keith is a senior manager of Grant Thornton’s State & Local Tax practice, based in Chicago Previously, he held the position of general counsel of the Illinois Department of Revenue, where he developed tax policy, evaluated and reviewed tax-related legislation, and oversaw tax-related litigation.

* keith staats@us gt com

F r o m a s a l e s t a x p e r s p e c t i v e , t h e f i r s t q u e s t i o n i s , “ I s t h e d e a l - o f - t h e - d a y f o r a tangible product or service subject to a particular state’s sales tax?” In transactions that involve the sale of both a tangible item and a n o n - t a x a b l e n o n - t a n g i b l e s e r v i c e , t h e next obvious question is, “How should the payment be allocated between taxable and non-taxable components?”

It seems that the states generally agree that the deal-of-the-day company’s initial sale of the voucher is not subject to sales t a x . H o w e v e r, t h e s t a t e s a r e n ’ t i n a g r e ement when it comes to the amount of tax due when vouchers are redeemed

In a transaction exclusively involving a sale of tangible personal property or a taxa ble s e rv ic e , de pe nding on the s ta te , the sales tax base could be (1) the amount the c u s t o m e r p a i d f o r t h e v o u c h e r, ( 2 ) t h e a m o u n t t h e r e t a i l e r r e c e i v e d f r o m t h e “deal-of-the-day” company, (3) the regular sales price of the product the customer has purchased, or (4) the amount the retailer received from the customer

The Illinois Department of Revenue issued advice on the sales tax treatment of these types of transactions at its annual meeting with tax practitioners earlier this year Taking the example of a customer who purchases a $25 deal-of-the-day voucher for

$50 worth of food at a local restaurant, we’ll get a better idea of the process for determining sales tax.

Illinois takes the position that in a deal-ofthe-day type transaction involving the redemption of a voucher for a discounted purchase, the amount subject to tax depends on whether the retailer knows the amount the customer paid for the voucher For example, if the retailer knows that a customer paid $25 for a voucher entitling them to $50 worth of food, then the tax base is $25 If, however, the retailer doesn’t know that $25 was paid, then they’re subject to a tax base of $50 What’s more, any receipts paid by the customer for additional food over the $50 amount increases the tax base For instance, $60 of food represents an additional $10 making the tax base $35 or $60, depending on whether the retailer is aware of the amount paid for the voucher.

The sales tax treatment of deal-of-the-day v o u c h e r s i s a n e v o l v i n g a r e a , a n d s t a t e s tend to be inconsistent in how sales tax is a p p l i e d W h a t ’ s m o r e , f o r t h e m o s t p a r t , state policies have been announced in policy bulletins rather than incorporated into r e g u l a t i o n s , r a i s i n g q u e s t i o n s o v e r h o w binding the pronouncements truly are

Adding to the challenge is the fact that policies are subject to change. For instance, Massachusetts originally treated the deal-ofthe-day discount like a gift certificate, which meant that the tax base for a $25 voucher worth $50 would be $50 (the value of the voucher), and tax would be due when the voucher was redeemed Recently, however, Massachusetts modified this treatment, entitling the retail customer to a reduction in the sales price at the time of the sale, with the taxable amount being based on the discounted price ($25 versus $50)

Needless to say, participants in these programs should carefully evaluate the requirements of the jurisdictions in which they conduct business and periodically review state pronouncements to ensure that state policies haven’t been modified

FORENSICS INSIDER

E x p e c t t h e U n e x p e c t e d

Writing the book on how to deal with fraud

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

If you’re like me and became a parent for the first time before the onset of the new millennium, you must have noted the What to Expect books phenomenon with some bemusement I begrudgingly acknowledged their popularity once I started seeing them in friends’ homes on coffee tables, in kitchens and even in bathrooms Ultimate confirmation of the books’ mainstream acceptance came early in 2012 with the release of the major motion picture What to Expect When You’re Expecting

normal operations The long-term ramifications of fraud can be drastic since it can and often does have a material impact on an organization’s ability to continue as a going concern The legal and accounting expertise required is very different than what’s called for by day-to-day legal and accounting functions This means identifying the right experts and getting them on board quickly

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

I often wonder why such guidance doesn’t exist for those involved in a fraud for the f i r s t t i m e W h a t c a n s t a k e h o l d e r s e x p e c t when news of a breach breaks? What are the proper steps to take? Who should be i n v o l v e d ? H o w l o n g w i l l i t t a k e ? H o w much is it going to cost? What’s the most likely outcome?

These are questions that virtually every one of my clients has asked. To the best of my knowledge no such guide exists. And y e t , f r a u d d o e s h a p p e n , a n d v e r y f e w clients and advisors expect it when it does.

We l l , g u e s s w h a t , i t c o u l d h a p p e n t o you And how you react will make a huge difference to the eventual outcome

The initial news that something is wrong i s o v e r w h e l m i n g i n s o m e c a s e s P e o p l e tend to react with their hearts and not their heads This is, after all, an issue of broken trust Not overreacting and staying calm in the initial hours and days after a breach is discovered pays off in the long run Taking c o n t r o l a n d “ c i rc l i n g t h e w a g o n s ” i s t h e best first step Limit information to a needto-know basis until the nature and scope of t h e b r e a c h i s k n o w n O t h e r w i s e , a w e l lintentioned accountant or employee could inadvertently ruin an investigation by alerting a co-conspirator to the discovery

Once information is effectively contained, identifying the right experts to involve is critical. Understand and accept that the organization will need to go far outside the box of

Start by contacting legal counsel Far too often, entities and their accountants make the choice to conduct their own investigation, destroying evidence, alerting co-conspirators and sabotaging the process along t h e w a y. T h e a t t o r n e y ’ s p r i m a r y j o b i s t o protect the organization not the individuals, and to ensure that any investigation is conducted properly. What’s more, an attorney can identify other areas of expertise required to resolve the problem.

Allan T. Slagel, Esq., co-chair of Shefsky & Froelich’s Litigation Practice Group, has successfully represented clients in a variety of commercial disputes, ranging from breachof-contract actions to multistate class-action securities and derivatives litigation He has also worked extensively to defend and prosecute employment-related claims He states that, “Clients need to be provided with a clear understanding of the risks to their entity and themselves when dealing with claims asserting financial wrongdoing The failure to give due consideration to the consequences of such claims can have long-term serious ramifications ”

Once again, step one always should be “contact your legal counsel ”

The next seemingly obvious step, if not taken, can cause the situation to implode trust your legal counsel

If you’re a CPA serving clients, encourage them to listen to their attorneys and follow their directions. I have personally worked with clients who went off script and wrecked weeks of their attorneys’ and forensic accountants’ work. Allow your attorneys to lead

the investigative team As mentioned, these experts are unique in their skills and don’t come to the table free CPAs who are used to performing an audit and generating a tax return for client fees of $10,000 may have trouble comprehending a forensic investigation that costs $50,000

Keep in mind that the client’s future may h i n g e o n t h e r e s u l t s o f t h e i n v e s t i g a t i o n Don’t be afraid to ask any and all questions, a n d , a s a f i d u c i a r y, m a k e s u r e y o u a s s i s t y o u r c l i e n t i n i d e n t i f y i n g a n y i n s u r a n c e c o v e r a g e ( s u c h a s D i r e c t o r a n d O f f i c e r, Errors and Omissions, etc ) that may pay for the cost of an investigation and prosecution (or defense)

Allow the team to finish its work and provide complete and full data When approached or interviewed, always tell the unvarnished truth Key facts that are kept from the investigative team may be unearthed later on and cause severe damage The worst-case scenario is that withholding or destroying evidence may rise to the level of a criminal offense

If evidence of wrongdoing surfaces, be prepared to fully prosecute the matter Consider the tone at the top letting key em-

ployees off easy when they’ve committed ethical violations sends a disastrous message throughout the organization

Last but certainly not least, be prepared to litigate Entities have many compelling reasons to keep their dirty laundry out of the public eye and therefore seek to resolve t h e s e t y p e s o f m a t t e r s q u i e t l y H o w e v e r, some cases do require a court’s decision for a reasonable outcome The courtroom is an intimidating arena, but it’s also where having the right attorneys and experts in place from the beginning pays dividends

If your matter goes to court, be ready for any outcome Your vision of an open–ands h u t c a s e m a y n o t a l i g n w i t h t h e j u r i s t s ’ final determination As any attorney will tell you, going to trial is always a proverbial roll of the dice

If only the market recognized that business owners, managers and fiduciaries could benefit enormously from a manual on what to expect when the unexpected happens It’s invariably an unnerving process that could be mitigated with better guidance

The solution is clear: Keep an eye out for my future book, What to Expect When You Didn’t Expect It!

CCFL is a service of the Illinois CPA Society

RETIREMENT ADVISOR

P F P P e r k s i n Vo g u e

Personal financial planning as an executive perk is still around; it just looks a bit different

By Mark J Gilbert, CPA/PFS

Executive perks have gotten a bad rap over the last several years, starting in 20002 0 0 2 w h e n e x e c u t i v e s a t f i r m s s u c h a s Enron, Worldcom and others made headlines for their bad management The 2008 f i n a n c i a l c r i s i s a n d g l o b a l r e c e s s i o n a l s o l e f t i n v e s t o r s d e m a n d i n g f e w e r e x c l u s i v e benefits for company executives

principal in the financial planning f i r m o f Re a s o n Fi n a n c i a l A d v i s o r s , Inc , Mark’s 25-plus years of finance a n d a c c o u n t i n g e x p e r i e n c e i n c l u d e s

1 3 yea r s in p er s ona l f ina ncia l p la nning An ICPAS member since 1982,

M a r k c u r r e n t l y s e r v e s i n t h e I A / P F P

M e m b e r Fo r u m G r o u p a n d o n t h e

Structure & Volunteerism Committee

* mgilbert@reasonfinancial.com

H o w e v e r, t h e d e a t h o f p e r k s h a s b e e n g r e a t l y e x a g g e r a t e d T h e y ’ r e s t i l l a r o u n d , albeit in a more subdued way Thanks to regulations like Sarbanes-Oxley and DoddFrank, these executive programs are under a brighter spotlight and are more transparent Consequently, while some companies have chosen to scale back their perks, others continue to provide them as a means to remain competitive in the marketplace

PFP as a perk

While the media not surprisingly likes to focus on more glamorous perks like personal use of the corporate jet, a survey of recent S&P 500 company proxy statements published by the Ayco Compensation & Benefits Digest (June 15, 2012) indicates that financial planning is one of the most common perks offered In fact, 45 percent of firms provided both company aircraft personal use and financial counseling/tax preparation perks to their CEOs and certain

f a c t o r s : F i r s t , t h e n e e d t o b e c o m e m o r e competitive than (or remain as competitive as) a company’s peers from a compensation p e r s p e c t i v e ; s e c o n d , t h e n e e d t o r e d u c e e x e c u t i v e s ’ c o n c e r n s o v e r t h e i r p e r s o n a l financial situations so they can better focus on their employer firms; and third, the need to free up the time executives spend on personal matters in order to focus on running their businesses

Recent trends

Since Sarbanes-Oxley became law, public companies have had to disclose the types and amounts of executive perks for certain named executive officers Dodd-Frank introduced a requirement to provide nonbindi n g s h a r e h o l d e r v o t e s o n e x e c u t i v e c o mpensation and perks for public companies Both laws, as well as increasing public firm s h a r e h o l d e r a c t i v i s m , h a v e m a d e g r e a t e r scrutiny of the board and CEO or president a necessity

Some firms have responded by cutting perk programs back substantially over the last decade. Most have continued to run these programs in a tighter, more prudent way. Relatively fewer firms have opted for what I call an “egalitarian trend ” These firms take the position that corporate executives shouldn’t receive perks above and

named executive officers, followed by 37 percent that provided a car and 31 percent that provided an executive physical exam Encompassing anything from preparing a y

o ongoing financial advice and even investment portfolio management, financial planning perks owe their popularity to three key

beyond what middle managers and rankand-file employees receive, and have eliminated most or all of their programs. Others have attempted to increase the availability of at least some of the perks among a broader range of the corporate workforce And, in fact, a recent International Foundation of Employee Benefit Plans survey shows that

“In terms of total cost, these perks generally cost less than other, higher-profile perks, so they’re not likely to draw as much ire from shareholder activist groups. ”

70 percent of its member firms provide all or most of their employees with some form of financial education or financial planning

Tax treatments

Financial planning perks are taxable as fringe b e n e f i t s , a n d t h e r e f o r e i n c l u d e d i n W- 2 i ncome, unless they specifically relate to advice provided on the employer’s qualified retirement plan, and such advice is available to all company employees.

As the call for transparency has increased, there’s been a decline in the practice of providing a tax reimbursement or tax gross-up to c o v e r t h e a m o u n t o f i n c r e m e n t a l i n c o m e taxes associated with the taxable perk The Ayco survey indicates that merely 5 percent of S&P 500 firms reported providing any sort of tax reimbursement

What’s in store?

I expect that financial planning perks will continue to be offered to executives and certain other managers of large publicly traded firms In terms of total cost, these perks generally cost less than other, higher-profile perks, so they’re not likely to draw as much ire from shareholder activist groups Plus, a corporate board can more easily justify offering this type of benefit to its executives in light of the increasingly complex tax and financial environment.

F i n a l l y, a f i r m ’ s g o o d e x p e r i e n c e w i t h a financial planning perk results in an opportun i t y t o i m p r o v e f i n a n c i a l e d u c a t i o n a m o n g r a n k - a n d - f i l e w o r k e r s . I t ’ s c l e a r t h a t t h e s e workers are looking for help in this area from their employers, and I believe many employers are willing to provide it as long as their potential liability is limited.

T h e f u t u r e o f f i n a n c i a l p l a n n i n g p e r k s i s certainly less clear for privately held firms, but n o l e s s i m p o r t a n t I n t o u g h f i n a n c i a l t i m e s , s uc h dis c re tiona ry pe rk s a re a n e a s y ta rg e t Perhaps the best advice is to seriously consider providing a financial planning perk for members of the management team by engaging in the financial planning process yourself a n d d e v e l o p i n g a w e l l - p l a n n e d s u c c e s s i o n a nd owne rs hip tra ns ition pla n S uc h a pla n benefits the owner, the owner’s spouse and family, and the management team by letting everyone know how he or she plans to eventually transfer ownership It‘s far better to have a s u c c e s s i o n p l a n i n p l a c e t h a n t o h a v e t o deal with no plan at all when retirement or an unexpected event rolls around.

The Illinois CPA Society’s Women’s Executive Committee and the American Institute of CPAs 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 Friday, November 30, 2012 at the Standard Club in Chicago.

To register to attend this breakfast, please call the Illinois CPA Society at 800.993.0393 and refer to Event Code C41153 or visit www.icpas.org.

Helen Barrick, CPA Partner, Assurance Services, CliftonLarsonAllen LLP Experienced Leader

Kathryn Garlow, CPA Partner, Shepard Schwartz & Harris LLP Experienced Leader

Stacy Janiak, CPA Chicago Office Managing Partner, Deloitte Experienced Leader

Jeannie Adamson, CPA Partner, Ernst & Young LLP Emerging Leader

Lisa Malina, CPA President, Malina and Company

Emerging Leader

Elizabeth Pittelkow, CPA Accounting Manager, ArrowStream, Inc.

Emerging Leader

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.

CAPITOL REPORT E x a m + L i c e n s e = C PA

Confused about CPA licensure? These FAQs add up to perfect clarity

By Marty Green, Esq

Marty is the ICPAS VP of Government Relations, and a practicing lawyer and member of the Illinois Bar 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

* greenm@icpas org @icpasgovt

Upcoming Deadlines

CPA firm license renewals:

November 30, 2012.

Professional service corporation renewals:

January 1, 2013

We’ve talked to many of you over the last several months as we approached the application deadline for the Registered CPA title and the beginning of Licensed CPA renewals From many of your questions, it seems that there’s lingering uncertainty about the licensure and regulatory structure of CPAs in Illinois And so, I’m bringing you some useful FAQs to help you.

Q. Does Illinois have a Board of Accountancy that oversees CPA regulation?

A. No CPAs in Illinois are regulated by the Illinois Department of Financial and Professional Regulation (IDFPR). The IDFPR regulates 57 licensure acts, 60 professions and 229 types of licenses including the CPA Illinois also has the Illinois Board of Examiners (BOE), which is responsible for certifying candidates’ eligibility to take the CPA Exam, overseeing administration of the exam, and notifying candidates of CPA Exam scores The Illinois Public Accounting Act 225 ILCS 450/et seq is the statutory framework of CPA licensure and regulation in Illinois.

Q. I’m not a licensed or registered CPA but passed all portions of the CPA Exam May I post the CPA certificate in my office and specify on my resume that I passed the CPA Exam?

A. Yes The Certificate issued either by the University of Illinois or the BOE signifies that you passed all portions of the CPA Exam It is not a license to use the CPA title, however. By specifying that you passed the CPA Exam on your resume, you are not claiming to be a CPA or using the CPA title

Q. I have a CPA Certificate from the University of Illinois or the Board of Examiners Does it allow me to use the CPA title?

A. No The CPA Certificate represents the passage of all portions of the CPA Exam To use the CPA title on business cards, advertisements or letterhead you need to be a licensed or registered CPA through the IDFPR Since the deadline for applications ended on June 30, 2012, new registrations

are not being issued Those registered before June 30 are grandfathered for life subject to renewal every three years, and may continue using the designation All others need to apply for full licensure Using the CPA title without being a licensed or registered CPA may result in disciplinary action and a penalty not to exceed $5,000 per offense.

Q. Are my state licensure renewal and fees included in my ICPAS membership dues?

A. No The ICPAS is the professional organization for Illinois CPAs. The IDFPR is the state licensure and regulatory agency for CPAs Aside from your voluntary membership dues to the ICPAS, as a licensed or registered CPA, you are required by law to maintain your CPA license and renew your license or registration every three years.

Q. I’m not sure if I’m a licensed or registered CPA Is there a way to check?

A. Yes The IDFPR maintains a robust website at www.idfpr.com. Under “Agency Quick Links,” access “License Look Ups” and select either license or registered CPA

Q. Can I check whether my license or registration is in good standing?

A. Yes. Visit the same IDFPR Quick Links at www idfpr com

Q. I moved and haven’t received IDFPR licensure notices Does the ICPAS notify the IDFPR of change of addresses?

A. No. As a licensed or registered CPA, the Illinois Public Accounting Act requires you to notify the IDFPR of your current mailing address You can update your information at www.idfpr.com.

Q. I have repeatedly called the IDFPR with licensure questions and have gotten a continuous busy signal or was placed on hold for an indefinite length of time Is there any other way to get my questions answered?

A. Yes. Visit www.idfpr.com and send an email under the “Public Accounting” section The IDFPR also maintains offices in

Springfield at 320 West Washington Street and in Chicago at the James R Thompson Center IDFPR staff assists walk-ins at both locations. The ICPAS also has included FAQs under the “Licensure & Registration” Quick Links at www.icpas.org. What’s more, the ICPAS has expressed its concerns to the director of the Division of Professional Regulation about licensee customer service The IDFPR is currently automating the application process in order to issue computer-generated emails when applications for licensure or renewal are received, and as those applications go through subsequent stages

Q. I need to provide an out-of-state licensing agency with verification of my CPA Exam scores, which I took in Illinois Who should I contact?

A. The BOE certifies applicants who have passed all portions of the CPA Exam when taken in Illinois Request for verification of exam scores should be made to the BOE at www illinois-cpa-exam com For applicants applying for an Illinois license through the IDFPR, the Department automatically verifies exam passage.

Q. As a member of the Illinois CPA Society and a licensed or registered CPA, am I required to follow an ethical code of conduct?

A. Yes ICPAS members are held to rules of professional ethics the Code of Professional Conduct of the AICPA (see www icpas org) Similarly, as a licensed or registered CPA, the Public Accounting Act requires you to follow the Public Accounting Rules of Professional Conduct outlined in the Illinois Administrative Code (visit the “Public Accounting” section at www idfpr com)

Admittedly, the licensure and regulatory process can be confusing Of course, ICPAS staff is always available to answer your questions and assist you with the process along the way

make success possible

The support of ICPAS members like you makes a tremendous impact on the lives of hundreds of future CPAs every year. Help create more success stories for deserving accounting students across Illinois.

A SPECIAL THANK YOU... to the following advertisers who exhibited at this year’s Showcase.

“Without this scholarship, I wouldn’t be able to accomplish my goal of becoming a CPA.”

Amy Vrtis Scholarship Recipient, Lewis University

Amy is a 100% financially independent student who is currently working three jobs, is a collegiate athlete, and on the Dean’s list.

All Hail the Consumer

A digitally empowered public has changed the rules of customer engagement

By Selena Chavis

Where do savvy consumers go when they need to find an accountant? Do they (a). read your ad in Crain’s? (b) hunt for your postcard mailing? or (c). go to one of the many web-based rating sites to read surveys and reviews from people who have used your services?

If you answered (a) or (b) t h e n y o u m a y b e u n a w a r e t h a t i t ’ s 2 0 1 2 , a n d t h i n g s have changed.

This is the age of the digitally empowered consumer, and with so much information at their fingertips, a company’s carefully crafted marketing message may not have the same impact it did a decade ago. In fact, if information is readily available, consumers are more likely to do their own research and come to their own conclusions

Mana Ionescu, president of Lightspan Digital, a social media marketing company based in Chicago, explains that there’s never been so much information available to consumers as there is today An abundance of product research, buyer surveys and comparison shopping sites means that the public no longer has to rely on a company’s hype Instead, consumers are flocking to their iPhones, iPads and laptops to read reviews and criticisms whether constructive or otherwise

knowing more about certain products and their competitors than manufacturers do ”

Alton Adams, a principal at KPMG who also leads the organization’s Customer Strategy and Growth Practice, notes that a number of factors has created a new normal of consumer behavior, most notably a coupling of the recent recession and a more frugal and increasingly inform-ed buying public Quite simply, the balance of power has shifted

What this means to you is that you’re really no longer in control of your own messaging; the conversation is now in the hands of your c u r r e n t a n d p o t e n t i a l c l i e n t s a n d c u s t o m e r s . This new reality means that traditional forms of marketing and advertising won’t be as effective at enticing consumers to your door. And especially for the service industry, the concept of creating a personal brand through social media networking becomes evermore important.

“Without exception, service industry professionals always say that referrals are where they get the majority of their business,” says Sima Dahl, president of Parlay Communications, a C h i c a g o - b a s e d s o c i a l m e d i a c o n s u l t i n g a n d t r a i n i n g f i r m “ T h a t ’ s w h e r e t h e r e ’ s a h u g e o p p o r t u n i t y t o b u i l d a n d t h e n l e v e r a g e y o u r personal brand.”

For example, in the case of businesses with a handful of employees, Dahl suggests owners put their energies into sites such as LinkedIn and Facebook “I’m forever encouraging professionals to showcase their thought leadership and expertise. You’re only as well-known as what you’ve recently published, posted or shared,” she explains, adding that she’s received notable referrals through this kind of interaction on Facebook “The more my contacts know and like me, the more willing they are to refer me.”

t b e s t p r o d u c t , b e s t s e r v i c e a n d b e s t p r i c e , ” explains Ionescu “In fact, we see consumers

Part and parcel of the social media revolution is the fact that the concept of customer loyalty that existed a decade ago has pretty much fallen by the wayside Offering an example, Adams points out that switching cable or phone providers used to be a time-consuming burden many consumers would rather avoid In today’s technology-driven world, however, changing

plans or providers can be as easy as a click of a mouse. If one company offers essentially the same service or product as another, it typically comes down to price or relationship

“The loyalty equation has changed dramatically,” Adams asserts “Companies have to figure out how to create an environment that makes consumers want to do business with them They have to maximize the customer experience ”

Social media can actually make it easier to deliver a better, more fulfilling customer experience and improve relationships, Ionescu explains “What used to take a 10-minute phone call now can be a 10-second tweet It’s so much easier now to make a customer feel good about their recent visit with you With a simple tweet or Facebook shout out, you can make them feel special,” she says

With a social media presence comes the expectation of personalized attention. Lack of follow-through can deliver negative customer service scores. “There's no doubt that online consumers see social networks as customer-service channels,” Ionescu explains “I see so many business social media accounts that don't follow back their own customers That right there is a missed opportunity ”

Establishing a social media presence is only the first step, however How does a practice or company weed through the barrage of opportunities for exposure to find the best ways to be seen by customers?

According to Adams, the average consumer is hit with between 2,000 and 3,000 marketing messages a day, which makes an answer no easy task

“There’s an amazing amount of clutter,” he says “How do I reach consumers at the right time and right place to get their attention?”

According to Ionescu, the best way to be seen online is to be active online but in a thoughtful, strategic way. “My recommendation is to make a plan to leave footprints across the web, and make sure that those footprints all lead back to your website, your home base,” she says “The more tracks you leave, the more traffic you will get ” In other words, combine your Yelp presence, with y our Twitte r pre s e nc e , a nd y our L ink e dIn pre s e nc e , e tc . Upda te your sites daily. The time of day during which you post is important. For instance, best practices suggest that you tweet four times a day at regular intervals

The best strategic roadmap can’t be approached in a haphazard way, though, and there are no shortcuts It will take persistence to actively search for the right opportunities

“You can start by just answering questions on forums such as the Yahoo! Finance message boards or the Startup Nation forums. Another way to find opportunities to interact with people and get your name out there is by using the search tools every social network has,” Ionesco explains These search tools are available on both LinkedIn and Twitter as well as other key industry sites In particular, professionals should look for opportunities to answer questions that showcase their expertise to rise above the competition.

Companies that take the lead in becoming “the source” of information in their industry are approaching the empowered consumer in innovative ways, Adams notes Pointing to Progressive, he says the company has established a foothold in the insurance industry by becoming the place to go to compare rates and plans with other providers. “They made themselves a destination site for consumers to do their shopping,” he says.

With the rise of mobile devices and social media, Adams believes that, “Most companies and consumers are still evolving and learning how to use the technology and information available to them ”

Recognize your peers!

Nominate a colleague for one of the Illinois CPA Society’s prestigious awards:

Lifetime Achievement Award

Presented each year to an individual(s) who has provided distinguished service to the profession in Illinois and/or nationally.

Outstanding Educator Award

Presented each year to an educator(s) at a community college, college or university who has made continuous and outstanding contributions to the education of accounting students.

Outstanding Leadership in Advancing Diversity Award

Presented each year to individuals who are exceptional leaders committed to increasing diversity in the accounting profession.

For specific award criteria and nominating instructions, visit www.icpas.org/awards.htm

For this reason, KPMG recently partnered with Georgetown University’s McDonough School of Business to create the Georgetown Institute for Consumer Research Its focus is developing ground-breaking consumer research to highlight the challenges and opportunities that accompany technologically empowered consumers.

“While trying to help our customers understand the future of customer acquisition, marketing and retention, what we found was lacking was detailed, quantitative research,” Adams explains “We felt there was an opportunity for us to marry the commercial challenges and come up with a robust insightful look at the future of consumer trends and customer loyalty.”

The institute also will serve as a forum for global business executives and leading academicians to share perspectives on constantly changing consumer habits, and to help consumers make better buying decisions

“The objective,” says Adams, “is to bring a level of quantitative and proactive thought leadership” that hasn’t existed before.

For more information contact your local ADP Representative or call 312-935-7292. Visit accountant.adp.com today!

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.

Whose Fraud is It Anyway?

Can corporate directors be held accountable for a colleague’s fraud?

By Brian J Hunt, CPA/JD

I n t h e c a s e o f Z a h l v. K r u p a , K r u p a b e g a n working as a salesman with Jones & Brown in 1973, rising to the position of vice president of sales, board member and, ultimately, president in 2003 By 2000 he had met Zahl, whom he h a d d a t e d a n d w i t h w h o m h e m a i n t a i n e d a friendship He represented to Zahl that, in addit i o n t o s t e e l m a n u f a c t u r i n g , J o n e s & B r o w n “made investments.” In 2000, Krupa informed Zahl that Jones & Brown had created an investment fund to raise money for business expans i o n a n d t h a t f r i e n d s c o u l d i n v e s t u n d e r t h e director’s name

Krupa advised that Jones & Brown “guaranteed” the investment (which would be “short term”) at a rate of more than 11 percent, and asked for the funds in cash. Krupa handwrote the terms of the agreement on Jones & Brown letterhead. Zahl didn’t ask for any additional documentation

Krupa returned the first investment of $10,500 with interest, as well as a second investment of $66,000 Then, in late 2002, Krupa advised that the fund was open again “probably for the last time,” and Zahl invested a further $160,000 Zahl testified that all of the investment offers, as well as the receipts and repayments, were made at Krupa’s Jones & Brown office

When a company director commits fraud, how extensive is the trickle down effect? It’s a question that has kept more than one director up at night A 2010 decision, Zahl v Krupa, sheds some light on the issue

As a general rule, corporate directors aren’t personally liable for the acts of other officers or directors merely because of their status as directors However, in certain circumstances, Illinois law does impose liability For instance, a director might be personally liable for the acts of subordinates if he/she fails to exercise ordinary care, and is personally liable for the acts of co-equals (namely, co-directors) only if he/she participates actively or passively in the acts (whether by knowing or reckless action or omission)

Creighton had been a board member at Jones & Brown since the 1960s, and became chairm a n a n d C E O i n 1 9 9 9 K r u p a r e p o r t e d t o Creighton, and Creighton in turn allowed Krupa a g r e a t d e a l o f a u t h o r i t y a n d d i s c r e t i o n I n 2 0 0 3 , C r e i g h t o n a p p r o v e d a J o n e s & B r o w n loan of $135,000 to Krupa based on Krupa’s plea that his daughter had been involved in a “very serious” car accident for which he had no medical insurance As a result, he claimed, he was facing sizable legal and medical bills that might drive him into bankruptcy.

Creighton didn’t specifically advise other directors of the loan, although some of them later became aware of it. Jones & Brown had made loans to high-level employees in the past Creighton later testified that the loan to Krupa had been a mistake and acknowledged that, in

hindsight, his supervision of Krupa had been negligent Creighton also testified that Jones & Brown had unwritten policies forbidding personal use of company time and property, but acknowledged that those policies were unenforced because of the trust and confidence he had placed in Krupa

At that point, no one at Jones & Brown was aware of Krupa’s gambling problem

In 2004, after Krupa had failed to return the third investment, Zahl visited Jones & Brown’s offices to see Creighton, explaining the terms that Krupa had represented Creighton then met with Krupa who, after a n i n i t i a l d e n i a l , a d m i t t e d t h a t h e h a d spent both Zahl‘s investment money and the Jones & Brown loan on gambling

Za hl file d s uit a g a ins t Jone s & Brown, C r e i g h t o n a n d o t h e r d i r e c t o r s , a l l e g i n g breach of contract, fraud and negligence w i t h r e s p e c t t o K r u p a ’ s h i r i n g , r e t e n t i o n and supervision Jones & Brown was later dropped from the lawsuit

The trial court granted summary judgment in favor of the directors, which the Appellate Court affirmed As for the breach of contract claim, the court noted the gene r a l r u l e t h a t c o r p o r a t e o f f i c e r s a r e n o t l i a b l e f o r c o r p o r a t e o b l i g a t i o n s . I t t h e n analyzed and synthesized two competing l i n e s o f I l l i n o i s d e c i s i o n s , o n e o f w h i c h holds directors liable for active participat i o n ( o r w i l l f u l i n a c t i o n ) w i t h r e s p e c t t o wrongdoing, and another which imposes liability for mere negligence.

As for the active participation claim, the c o u r t c o n c l u d e d t h a t Z a h l p r e s e n t e d n o evidence that the directors knowingly or recklessly participated, whether actively or passively, in Krupa’s misconduct

Referring to the more difficult inquiry of whether the defendants were negligent at all, the court similarly concluded that there was no triable issue of fact that the defendants were indeed negligent with respect to Krupa. Noting that Zahl presented no evidence that Krupa had a gambling habit or tendency to deceive when Jones & Brown hired him, the court also concluded that there was no question of negligent hiring.

As for Zahl’s argument that the directors turned a blind eye to Krupa’s “excessive and unusual” borrowing, the court rejected the argument out-of-hand, noting Jones & Brown’s custom of making loans to emp l o y e e s a n d t h e a p p a r e n t l e g i t i m a c y o f

K r u p a ’ s l o a n r e q u e s t . Wi t h r e g a r d s t o Creighton’s admissions of negligent supervision, the court noted that Creighton hims e l f w a s a p p l y i n g a h i n d s i g h t s t a n d a r d .

A n d a s f o r t h e p l a i n t i f f ’ s a s s e r t i o n t h a t

K r u p a h a d b e e n g i v e n t o o m u c h a u t o no m y, t h e c o u r t n o t e d t h a t d i r e c t o r s “ o f necessity” assign the immediate management of a particular business to subordinate officers, and found it unlikely that the m o s t i n t r u s i v e o f m e a s u r e s c o u l d h a v e thwarted Krupa’s machinations.

Rejecting Zahl’s efforts to argue backward from consequences, the court affirme d t h e l e g a l l y r e c o g n i z e d s t a n d a r d o f a s s e s s i n g w h a t w a s k n o w n a n d f o r e s e ea b l e t o t h e d i r e c t o r s a t t h e t i m e o f t h e i r conduct, and concluded that their conduct w a s r e a s o n a b l e a s a m a t t e r o f l a w T h e court concluded by noting that Illinois law w i l l “ t r e a t d i r e c t o r s w i t h m o r e l e n i e n c y w i t h r e s p e c t t o a s i n g l e i s o l a t e d a c t o f fraud on the part of a subordinate officer or agent, than when the practice appears to have been so habitually and openly comm i t t e d a s t o h a v e b e e n e a s i l y d e t e c t e d upon proper supervision.”

As for Zahl, we can easily see how she was duped, as well as what she might have done differently in order to protect herself f r o m t h e f r a u d W h i l e s h e w a s n a t u r a l l y hesitant (because of her relationship with Krupa) to ask for more formal documentat i o n , a s w e l l a s c o n f i r m a t i o n o f t h e a r rangement with other Jones & Brown representatives, that’s precisely what she ought to have done

The lesson is this: If the directors had been aware of their co-director’s gambling habit or his tendency to take investments, and had they known he was using any company property or company time to conduct any type of separate business, we can easily imagine a different analysis, if not an entirely different outcome The need for vigilance is all too clear As a corporate director, you will be known and potentially responsible for the company you keep ICPAS member Brian J. Hunt is the managing principal of The Hunt Law Group, LLC (THLG), where his practice focuses on business litigation and the representation of CPAs In 2012, THLG was selected as a “Go-To Litigation Firm for the Fortune 500 ” Email Brian at bhunt@hunt-lawgroup com

Elaine Weiss, ICPAS

Jim Jones,

Oak Brook |Janaury 22 |C19950

The DoubleTree Hotel 1909 Spring Road, Oak Brook, IL

Glenview |January 23 |C19951

8:00AM - Networking and Breakfast

8:30AM - 9:30AM - Program and Q&A

Wyndham Glenview Suites 1400 N. Milwaukee Ave., Glenview, IL

Chicago |January 28 |C19952

8:00AM - Networking and Breakfast

8:30AM - 9:30AM - Program and Q&A

The Crowne Plaza Chicago Metro 733 West Madison, Chicago, IL FOR

Green It

Pressures are mounting for small businesses to reduce their carbon footprints

By Derrick Lilly

only a few years ago, most small businesses scoffed at the concept of “going green ” It was a drain on time and resources, and, most likely, just a fad

According to the Office Depot Small Business Index, today’s reality is quite different, with 61 percent of small businesses actively strategizing to go green, and 70 percent anticipating becoming more environmentally conscious over the next two years

“From a strategic perspective, it’s a competitive advantage, a market differentiator that needs to be integrated into business operations,” stresses Peter Locke, MBA, managing director and co-founder of TerraLocke Sustainability Consultants

“Consumers definitely want to do business with more environmentally friendly organizations Consumer demands change and businesses need to evolve with them.”

Despite the social benefits and oft-touted business rewards like lower operating expenses, a positive public image, and stronger recruiting and retention campaigns many small and midsized businesses are still reserved about making the leap into green initiatives

No Budget? No Problem

“ Bus ine s s le a de rs a re a fra id of ta k ing the ir eyes off the bottom line, particularly during a challenging economy,” says Zbig Skiba, presid e n t o f s u s t a i n a b i l i t y c o n s u l t i n g f i r m S k i b a C o n s u l t i n g , L t d “ M a n y s m a l l a n d m i d s i z e d businesses interested in environmentally sustainable practices feel that environmental sustainability is a concept only large corporations can afford, but any business can be environmentally conscious regardless of size, industry, or financial resources.”

You won’t maximize your sustainability efforts if they’re limited to a one-man show, however, so get your staff involved Simply announcing to employees that your organization would like to become more green will encourage engagement, invite new ideas, and allow a sustainability-minded, values-driven culture to grow That culture shift alone can work wonders for your employee recruitment and retention efforts.

“From a longer-term business perspective, it can be a differentiator New grads are definitely l o o k i n g t o h a v e m o r e t h a n j u s t a j o b , ” s a y s Locke. “They want to be part of an organization that contributes to society and doesn’t pillage the environment ”

What’s more, he adds, “The younger generations are already being introduced to sustainability concepts that they’ll transition right into the business world,” which will certainly come in handy when forming your “green team ”

What green team you ask? Our experts are adamant that such a team is a key component of successful sustainability efforts

“Starting to change behaviors and raise sustainability awareness can be as simple as putting ‘Please Turn Off’ signs on light switches and electronics,” says Peter Locke, MBA, co -founder and managing director of TerraLocke Sustainability Consultants “There are all sorts of easily implemented solutions out there ”

Need a jumpstart on the path to shrinking your carbon footprint? Double-sided printing, limiting HVAC system activity to business hours, recycling and making conscious efforts to reduce waste are all first-class no-cost options With the savings you realize, you can cycle funds back into your green initiatives, trading outdated equipment for energy-efficient models and recycled products as they come up for replacement “Many people think that going greener will cost more, but that’s not necessarily the case, ” says Yalmaz Siddiqui, chief green advocate at Office Depot “Customers can look at purchasing energy- efficient lights and computers, remanufactured printer cartridges and a wide range of greener supplies that cost less than less -green alternatives ”

“It’s absolutely best to have a volunteer or committee champion sustainability initiatives,” says Locke “Your green team can take an inventory and consolidate current initiatives, initiate discussions amongst departments to identify new cost-saving conservation opportunities, assign some criteria to prioritize them and, finally, act on them.”

Your chosen champion(s) can also initiate special projects in response to specific company needs. An example Skiba offers is an init i a t i v e t o d e c r e a s e e l e c t r i c i t y u s a g e “ T h e financial benefit is obvious,” he says. “Lower u s a g e o f e l e c t r i c i t y m e a n s l o w e r c o s t s a n d increased profits The environmental benefit includes a decreased effect on global warming, lower toxic releases and lower utilization of limited energy resources ”

S u s t a i n a b i l i t y i n i t i a t i v e s i n t h e b u s i n e s s world are rising to even greater heights, however, with two corporate strategies: Certified B Corporations and Beneficial Corporations.

Realizing the influence businesses have on s o c i e t y, t h e C e r t i f i e d B C o r p o r a t i o n w a s founded by the nonprofit organization B Lab [www bcorporation net] with the goal of carving out a niche for businesses that use their p o w e r t o s o l v e s o c i a l a n d e n v i r o n m e n t a l problems Certified B Corporations meet rigorous independent social and environmental p e r f o r m a n c e , a c c o u n t a b i l i t y, t r a n s p a r e n c y and legal standards that ensure they’re working to achieve a positive environmental footprint, create great places to work and build stronger communities

“Becoming a Certified B Corporation is a really great opportunity for all businesses It’s a process any business can go through, and it promotes to the public that you’re acting sustainably and trying to create change and publ i c b e n e f i t , ” e x p l a i n s L o c k e , w h o s e f i r m i s currently a Certified B Corporation, with the intention of pursuing legal incorporation as a Beneficial Corporation

Beneficial Corporations are like traditional corporations except they seek to achieve similar goals to B Lab’s Certified B Corporation declaration. Beneficial Corporations are legally required to have a corporate purpose to create a material positive impact on society and t h e e n v i r o n m e n t ; e x p a n d f i d u c i a r y d u t y t o require consideration of the interests of workers, the community and the environment; and publicly report on overall social and environmental performance against a comprehensive, credible, independent and transparent thirdparty standard

Governor Quinn has signed legislation allowing Illinois businesses to be incorporated as Beneficial Corporations effective January 1, 2013, and Locke sees this as an opportunity for businesses to further differentiate themselves from their competitors

“Now a consumer looking to do busin e s s w i t h a n o rg a n i z a t i o n t h a t t r e a t s i t s e m p l o y e e s w e l l , t r e a t s t h e e n v i r o n m e n t w e l l a n d i s e n g a g e d i n t h e c o m m u n i t y,

can simply search for Beneficial Corporations,” he says

As it turns out, business greening isn’t a fad, it’s the future. Businesses want it, consumers want it, and even politicians want it If you’re serious about the future of your business, you have to think and act sust a i n a b l y. “ L o n g t e r m , ” s a y s L o c k e , “ i t ’ s going to be critical for businesses to take action ”

Digital Learning

An evolving online environment gives CPE takers both flexibility and savings

By Derrick Lilly

d g e i n t o d a y ’ s c o n s t a n t l y e v o l v i n g a c c o u n t i n g a n d f i n a n c e profession is a feat Too bad time is short and dollars are tight

Not surprisingly, demand for fast, convenient and affordable CPE is at an all-time high And thankfully, many of today’s education and training providers are rising to the challenge, quickly establishing new ways to deliver learning in cutting-edge interactive digital formats

“ I t ’ s t h e e r a o f ‘ p e r s o n a l l e a r n i n g . ’ I t ’ s a l e a r n e r ’ s w o r l d n o w, ” s a y s D o u g H a r w a r d , CEO of Training Industry, Inc. in his article, Key Trends for 2012: Mid-Year Review “[T]hey personalize their learning experience by getting r e l e v a n t i n f o r m a t i o n w h e n , h o w a n d w h e r e they want it.”

Why travel to a live seminar, for example, when you can attend a live webinar from the comforts of your home or office at a fraction of the cost? Forget the commuting, the parking, the time away from work or family, and all of the other hassles that go along with attending a live

event Thanks to high-speed internet access and constantly advancing internet-ready devices, webinars are accessible to more participants than ever and demand keeps growing Google Trends, for example, reports that searches for “webinar” have steadily climbed since 2004. And accounting and finance professionals are jumping right on board

“Two conditions have become exacerbated in today’s work environment the demand on people’s time and the pace of change,” explains Rod Mebane, a partner with St. Charles Consulting Group, and a specialist in corporate learning strategy and executive leadership development “So there’s been a very strong trend within the accounting and finance professions towards utilizing more webcasts and webinars.”

“ M ov ing to the dig ita l world is the big g e s t trend we’re seeing in professional education,” stresses Curtis Marquardt Jr , online education m

stronger, the online learning experience is coming closer to what you would experience at a live event.”

Couple this with the explosion of available content and it’s no surprise that online education is bringing many professionals the instant gratification they’re feverishly looking for “People are going to make smarter choices now about how they learn new content,” says Mebane “Nowadays, it’s a whole lot easier for professionals to mix and match the most relevant courses for their work and development goals ”

For those professionals with unpredictable downtime, or those who often find their backs against the wall around CPE reporting time, ondemand courses are a godsend

“With on-demand courses, it’s all in your power to learn where you want and, more importantly, when you want, as they offer the convenience of learning online with recorded, interactive courses,” says Marquardt. “It’s an a la carte sort of world where professionals can pick a topic, sit down with their PCs or mobile devices at their convenience and learn.”

“It’s really helpful to walk through a structured course where the materials are nicely organized for you when you’re learning something new,” adds Mebane “The better designed on-demand platforms are packaged in a nice technology shell that walks you through the learning program while giving you the ability to pause, stop, or replay something, or search for key terms within a lesson to review again On-demand content goes beyond being just a training course; it’s a research tool for today’s digital learner ”

Hence the rise of the learning management system (LMS) Described by Marquardt as “online learning on steroids,” an LMS is a large-scale interactive online platform that enables users whether individuals or organizations to plan, track and manage the learning experience from start to finish It’s the ultimate tool for cutting through the cluttered online learning world.

“When a professional or employer looks for training today they’re going to find a dozen different providers with different courses and different prices; it’s a little bit overwhelming to make decisions,” says Mebane. “Conversely, an LMS allows you to organize content in a very useful and meaningful way ”

An LMS is for users who need to do more than just take a course here and there, granting users full control over the learning process with scalable capabilities to create custom curriculums for specific job functions, detail specific professional development goals, monitor training progress and results, track and manage education budgets and expenses, and ensure professional regulatory compliance

Cost effectiveness is another plus For $25 per person, for example, the Illinois CPA Society’s new knowledgehub initiative [www icpas org/ knowledgehub htm] allows users access to more than 1,500 educational offerings from four trusted CPE providers: the Illinois CPA Society, Becker Professional Education, SmartPros and Western CPE.

Many of these 24/7 programs are presented in HD video under one easily navigated website. What’s more, knowledgehub allows individuals and employers to search for programs by topic or job function, develop course plans tailored to specific job functions, and monitor and guide the development process while conveniently tracking CPE and licensing compliance for CPAs, CFEs, CIAs, CMAs, and much more

Given the restraints on time, dollars and accessibility accounting and finance professionals constantly face, along with the challenges o f t r

learning models

New Manager Sur vival Guide

Five tips to take you from reviewee to reviewer seamlessly

By Jacqueline Babb

Moving up the organizational ladder comes with many perks more involvement with strategy, access to leaders and a larger paycheck, to name a few The shift to the other side of the desk, however, can be daunting for even the most technically competent CPA

While the accounting profession makes the transition from reviewee to reviewer more rapidly than most, professionals in industry and business get their feet wet within just a few years. Typically at this point, they’ve completed the CPA Exam and have been mentored under various managers Those with a public accounting background also may have the benefit of experience reviewing work, which g i v e s t h e m a c e r t a i n l e v e l o f c o m f o r t when it comes to giving feedback.

No matter your range of experience, however, once promoted to manager, employers are expecting their young professionals to be competent in all areas of management, from agenda-setting to consensus-building Getting up to speed quickly is vital.

In her book, Becoming a Manager: How New Managers Master the Challenges of Leadership, Linda A. Hill tracked 19 managers during their first year in the role, interviewing participants as well as supervisors and subordinates Surprisingly, she found that expectations among these groups were anything but aligned. While new managers viewed their role as one t h a t f o c u s e s o n s e t t i n g g o a l s a n d e x e c u t i n g workflow to achieve those goals, both subordinates and supervisors expected a greater emphasis on people management and network-building Specifically, supervisors expected new managers to achieve goals by orchestrating a diverse network of relationships

A great deal of management is art rather than s c i e n c e . N e w m a n a g e r s c a n k e e p t e c h n i c a l , strategic and interpersonal factors in balance by following these five tips:

1. Become a technical pro

If you know your stuff, then evaluating others’ work and providing meaningful feedback will be a breeze Amanda M Rzepka, CPA, CGMA, senior staff accountant at Jet Support Services, I n c i n C h i c a g o , r e c o m m e n d s t h a t n e w m a na g e r s , “ R e a d e v e r y t h i n g a t y o u r f i n g e r t i p s . While a news piece or a technical standard may not be immediately relevant, it’s something to r e m e m b e r, s o y o u c a n h e l p y o u r t e a m l a t e r Consider yourself the source of information for your organization, particularly if you are one of only a few CPAs on staff.”

2. Learn the art of delegation

Harvard Business Review’s “Manager’s Toolkit” warns, “If you try to do too much as a new mana g e r, y o u w i l l h u r t t h e t e a m ’ s p e r f o r m a n c e , damage your relationships with team members a n d r i s k b u r n o u t ” I t s u g g e s t s t h a t d e l e g a t i o n builds a team member’s sense of belonging, and recommends that new managers clearly articulate goals, break those goals down into meaningful tasks, shore up resources and put a plan into action. Results are important. If an initiative i s n ’ t l i v i n g u p t o i t s k e y m e a s u r e s , d o n ’ t b e afraid to redefine it and change direction.

New managers sometimes struggle with the concept of trust, since they’re making the trans i t i o n f r o m s o m e o n e w h o d o e s t h e w o r k t o someone who reviews the work. Rzepka reco m m e n d s t h a t y o u n g p r o f e s s i o n a l s k e e p t w o lines of communication open, so all team members can delegate to one another with a mutual end goal “If the staff understands the end goal, t h e y c a n b e t t e r s e e t h e i r c o n t r i b u t i o n t o t h a t goal,” she says

Follow up is key Determining the effectiveness of the work product will keep everyone on the right track

3. Encourage conversation

Often, expectations aren’t articulated and therefore aren’t aligned across the board Savvy managers know how to identify those misalignments and bring a group to consensus

At Apple, arguably the most high-tech company the world has ever seen, Steve Jobs led meetings face to face Take a lesson from Jobs and do the same Consensus is hard to build electronically

Rzepka stresses that open communication is vital She began meeting with her team on a weekly basis This wasn’t only a time for team delegation, but also proved to be the connection team members needed to feel comfortable asking questions and sharing their ideas

4. Channel your emotional intelligence

There are ways to read body language and evaluate others’ emotions Your emotional intelligence will clue you into how to manage information so your audience responds favorably, and will enable y o u t o b e t t e r u n d e r s t a n d n o n - v e r b a l s i g n a l s a n d t h e i r u n d e r l y i n g meaning Essentially, emotional intelligence allows you to build a stronger bond with your team, and can go a long way in aligning expectations and agendas

5. Get advice from the trenches

Your supervisor was a new manager once too He or she understands the challenges associated with the transition from one side of the desk to the other Ask him or her for constructive advice and first-hand examples After all, you were promoted because your supervisor saw leadership potential in you, and talent that could be nurtured to bring about even greater organizational success

Yo u r l e a r n i n g s h o u l d n ’ t s t o p t h e r e , h o w e v e r N e w m a n a g e r s should tap into everyone around them, forging cross-departmental bonds Build your internal network and you’ll have a means to find the answers you need in your first foray into management

“Ultimately,” says Rzepka, “the most successful people are those surrounded by a strong team ”

ERP to the Max

Seven ways to optimize your ERP solution

By David E Sweas, CPA

The typical enterprise resource planning (ERP) software implementation process involves a lot of testing to ensure key system functions such as quoting, production, procurement and order fulfillment will deliver what they’ve promised before going live That said, there’s an area of the process that’s often only superficially looked at before system startup accounting

Because ERP solutions contain “automated accounting engines,” from day one accountants using the solution need to have a well-rounded understanding of how the system drives financial output. There also needs to be assurance of the quality of and control over financial data Failing to understand and act on this could have negative consequences for the ERP solution

These seven practical, scalable tips will help CFOs address this very issue

1 It’s no longer all about the GL

For an accountant to focus solely on the general ledger (GL) is to merely touch the tip of the ERP iceberg.

True enough, most ERP systems are designed around the GL Naturally, GL accounts still represent an organization’s financial position and have to tie in with certain areas and reports.

T h e p o i n t i s t h a t a c c o u n t a n t s n e e d a d e e p understanding of the transactional details that drive debits and credits to the GL This principle applies to transactions in the back office ( s u c h a s r e c e i v a b l e s , p a y a b l e s a n d t r e a s u r y ) a n d e s p e c i a l l y t o t r a n s a c t i o n s o n t h e o p e r ations side of the business, where the greatest level of accounting complexity tends to exist

A nothe r word to the wis e : M a ny s oftwa re packages embed (within operational modules) financial configuration and processes belonging to functions such as project accounting and cost accounting, which may make accounting-facing func tiona lity the re s pons ibility of nona c c ounting pe rs onne l It’s importa nt for a c countants to establish a high degree of ownership and control over these functions and processes W ha t’s more , a c c ounta nts ne e d to be a wa re

that some accounting sub-processes cross ERP modules.

2. Understand the system configuration

As a result of internal controls, SOX, and t h e l i k e , t h e r e s p o n s i b i l i t y f o r f i n a n c i a lr e l a t e d s y s t e m c o n f i g u r a t i o n a n d m a i n t enance often rests with business areas outside of accounting It’s critical that ERP conf i g u r a t i o n b e u n d e r l o c k a n d k e y, w i t h a c c e s s i b i l i t y l i m i t e d t o a s e l e c t g r o u p o f u s e r s H o w e v e r, e v e n i f n o t u n d e r a n a c c o u n t a n t ’ s c o n t r o l , t o p r o p e r l y u n d e rs t a n d a n d a n a l y z e f i n a n c i a l r e s u l t s i t ‘ s important that he or she understand systemw i d e c o n f i g u r a t i o n s t h a t h a v e a d i r e c t o r indirect effect on journal entries (JEs).

3 Built-in reconciliation needed

M o s t E R P s y s t e m s c o n t a i n s o p h i s t i c a t e d mapping configurations that drive financial transactions to specific GL accounts, typically on a daily or ongoing basis Both continuously reconciling major balance sheet GL accounts to transaction-driven backup r e p o r t s a n d p e r f o r m i n g r e a s o n a b l e n e s s checks are critical given not only the interrelationship between the balance sheet and profit and loss, but also the fact that ERP system JEs are “close-looped” and transaction-driven, and place a financial value on transactions

This continuous balance-sheet reconciliation will keep the P&L accurately stated and allow for income statement analysis throughout the month. Ultimately this results in a favorable impact on the month-end close cycle and analysis, which in turn has other positive effects on the organization.

Another point to note: Daily posting of ERP-driven JEs to the GL, while a must, isn’t sufficient in and of itself; the process must include ongoing reconciliation

4 Chart of accounts design is crucial

Best practices tell us that the chart of accounts (COA) is typically thought of as a means to drive reporting and analysis While this is true, another aspect of the COA structure is the ability to embed reconciliation into transactional/financial processing by leveraging various “reconciliation points” contained in the software configuration. The rule of thumb here is, if there’s a GL reconciliation point available in your configuration, take it (build it into the COA).

5. Exception reporting is a must

It isn’t about what you can build; it’s about what you can build and control

While heavy emphasis is placed on GLdriven financial reporting, many ERP implementations completely overlook the devel-

opment of critical “exception dashboard” reporting within the CFO’s area (or may relegate it to a “second phase”)

To illustrate the point, ERP systems will allow the processing of certain operational transactions that might have an abnormal f

p e r a t i o n a l a d j u s t m e n t s t o inventory or receivables, and transactions that fall outside a certain financial “acceptable tolerance ”

A w o r d o f a d v i c e : E x c e p t i o n r e p o r t i n g should be ongoing, and not associated only with month-end closing activities

6. Don’t design for month-end close

While this statement may seem counterintuitive, the principle is this: If the correct c o n f i g u r a t i o n , d a t a c o n t r o l s a n d o n g o i n g reconciliation are in place, the month-end close actually becomes a byproduct of the ongoing accounting process, instead of a major monthly task.

7. Make a seamless role transition

Month-end closing is largely viewed by the greater organization as a non-value-added activity, albeit a necessary one. In an ERP system, it‘s expected that the accountant’s role will shift dramatically from a focus on closing activities to analytics, especially as organizations continue to embrace business intelligence tools. Understanding the system configuration, processes, ongoing reporting and controls, and resulting migration towards a “continuous-closing” process, will enable accountants to transition to those duties

W h a t ’ s m o r e , m a k i n g t h e l e a p t o E R P o f t e n m e a n s r e t o o l i n g a n d r e t r a i n i n g t h e

C F O ’ s g r o u p , a s s k i l l s e t s a n d p r o c e s s e s a d a p t t o t h e n e w t e c h n o l o g y C o n s eq u e n t l y, g o a l s f o r u s e r a d o p t i o n s h o u l d include not only how to use the new system, but also how to use it differently than t h e l e g a c y s y s t e m , s i n c e m a n y c u r r e n t accounting processes won’t map, task-fortask, to the new system

David Sweas is a career-long ICPAS member who spent the first portion of his career i n p u b l i c a c c o u n t i n g a n d i n d u s t r y, w i t h heavy experience as a user of and advisor o n f i n a n c i a l s y s t e m s . S i n c e 1 9 9 6 , h e h a s b e e n a n E R P c o n s u l t a n t f o c u s i n g o n t h e implementation and optimization of financial and cost accounting applications and processes David is presently a director in t h e C h i c a g o o f f i c e o f M a r k e t S p h e r e C o nsulting LLC’s ERP practice

Reach out to prospective NEW CLIENTS by listing your firm on the Illinois CPA Society’s FIND A CPA Directory.

Listing in this directory is FREE and a benefit only available to Illinois CPA Society members.

This easy-to-use online feature allows individuals, businesses and not-for-profits to access your firm’s information through a simple CPA search on the Society’s website.

Join

Return of the Urbanites

The new face of urban renewal has revitalized Chicago’s hub

By Sheryl Nance Nash

Ah , t h e h e a d y d a y s o f 1 9 4 9 - 1 9 7 4 , w h e n urban renewal was at its prime. It was then that a major national undertaking to remove blighted properties and poverty from areas surroundi n g c e n t r a l b u s i n e s s d i s t r i c t s t o o k p l a c e i n C h i c a g o a s w e l l a s o t h e r u r b a n c e n t e r s Between 1949 and 1962 alone an estimated $3 billion was spent on this initiative Adjusted for inflation, that estimate approaches $17 billion in today’s economy When added to the renewal funds deployed between 1963 and 1973, the total cost of urban renewal likely exceeded $30 billion (in contemporary dollars), writes Derek Hyra in the Urban Affairs Review. F a s t f o r w a r d t o t h e “ n e w ” u r b a n renewal, between 1992 and 2007 Billions in federal funds again were pumped into programs like HOPE VI a n d t h e E Z I n i t i a t i v e t o h e l p f u e l inner-city

revitalization in America

“The new urban renewal is about economic globalization and the backto-the-city movement,” says Hyra in an interview with INSIGHT. In the 1990s and 2000s, some cities, including Chicago, saw population growth and an increase in demand for housing in their downtowns, he explains “In Chicago, just outside the Loop, what was once a very impoverished area has been redeveloped to accommodate technology workers Workers of the global economy are moving downtown,” he comments.

Demographics are key. “With the older generation there was more of a f l i g

o

and picket fence But kids just out of college have a different dream,” says

mutes and living close to work in an area they also want to play in Then too, rentals are an issue in suburbia there simply isn’t the same supply, says Stephen Friedman, CRE and president of S B Friedman & Company, a Chicago company specializing in consulting for urban a n d t o w n c e n t e r p r o j e c t s A n d e v e n s o m e mature citizens who now have empty nests are seeing the value of moving closer into the city where they have greater access to amenities.

“ I t ' s a b o u t b u i l d i n g n e i g h b o r h o o d s w h e r e people can live and walk to work; recreation a n d c u l t u r e a r e a l l w i t h i n a o n e - m i l e r a d i u s . Cities can develop many of these square-mile urban centers each with a distinct character of economic culture,” explains David Fiorenza, a Villanova School of Business economist, who specializes in urban and public-sector economics at Villanova University in Philadelphia, Pa Revitalization hasn’t been limited to downt o w n , h o w e v e r “ T h e r e a r e m u l t i p l e c e n t e r s , satellite places that are becoming more urban A l o t o f n e i g h b o r h o o d s w i l l b e n e f i t , n o t j u s t downtown,” says Philip Bess, urban design prof e s s o r a n d d i r e c t o r o f g r a d u a t e s t u d i e s a t t h e University of Notre Dame School of Architecture, South Bend, Ind

Increasingly, residents are able to have a real say in what goes on For example, on the neighborhood level in Chicago, the local alderman, agencies and residents' associations are devising neighborhood plans that look at transportation, housing, parks and recreation, and are working together to guide community investment

y M i l l e n n i a l s includes doing away with long com-

“The plans are taken seriously This is very different than what you saw 30 years ago,” says Gloria Castillo, president and CEO of Chicago Unite d, a n a dv oc a c y org a niz a tion. W he n the Green Exchange manufacturing facility closed its doors and 200 jobs were lost, for example, a quality-of-life plan was in place. So when the developer wanted to turn that building into condos, the neighborhood association said no and asked instead for a development plan that would bring jobs into the community.

“There were enough new condos given all the gentrification that had occurred,” says Castillo Their voices were heard “The building is now home to 1,100 jobs from a range of activities, like a transportation logistics company, workforce education firm, architect and packing company I love this model, you see a multiplier effect People get jobs, they can go to the store to shop and they have their money to repair their cars. It goes on and on,” she says.

Makeovers of significant magnitude require money Most cities offer businesses a variety of tools and incentives to locate to their city, or fill the financing costs associated with redevelopment “There can be dirty dirt with demolition, the soil has to be re-engineered, and there are other problems like lack of infrastructure or its decay. It means extraordinary costs,” says Friedman

To help to get the work done, there are an array of tax credits and programs, at all levels of government Also important is the r o l e o f p u b l i c - p r i v a t e p a r t n e r s h i p s w i t h corporations and organizations, which increasingly step in to fill funding gaps, particularly since the recession

At the end of 2011, the U S Department of the Treasury's Community Development Financial Institutions Fund (CDFI Fund) released data collected on projects financed in low-income communities across the nation Through the fiscal year 2010 reporting period, Community Development Entities disbursed $20 9 billion in Qualified Equity Investment (QEI) proceeds to more than 3,000 Qualified Active Low-Income Community Businesses, financing both real estate developments and operating businesses in low-income communities These New Markets Tax Credit investments were located in the metro and non-metro areas across all 50 states, the District of Columbia and Puerto Rico

“ N e w M a r k e t Ta x C r e d i t s a r e u s e d t o h e l p s t a r t d e v e l o p m e n t i n a r e a s w h e r e businesses may not want to go because of the high crime rate, or where the economy may be so bad that there may not be much o f a c l i e n t b a s e T h e t a x c r e d i t s i n c e n t businesses to go there; it makes them more willing to take the risk,” says Shafer

But change must be beneficial to the community, says Shafer. “We want employers to commit to hiring a certain number of people, there must be give-back to the community,” he explains

Pooling resources just makes good sense, particularly now Chicago’s Millennium

Park is a great example of a successful public-private partnership “The city put up half of the money, but corporations and monied people who wanted to expand the improvements raised money,” says Chris Gent, a consulting registered landscape architect in Chicago

Maxine Mitchell, CRE and president of Applied Real Estate Analysis in Chicago, which specializes in market and financial feasibility analysis and public and private development strategies, goes a step further. “The private sector put the frosting on the park; they made it outstanding The public sector couldn't do it alone.” The private sector's money went towards features such as the park's bridge, band shell, column structure at the main entrance and the gardens

Members of the private sector get kudos f o r b e i n g g o o d c o r p o r a t e c i t i z e n s , w i t h their names often posted publicly, say on the ball field or rehabbed theater. It's politically astute for a corporation to do its part f o r t h e g r e a t e r g o o d . Q u i t e f r a n k l y, “ F o r t h i s p u b l i c - p r i v a t e p a r t n e r s h i p t o w o r k , there has to be enough incentive for the private organization to get involved, and t h e p u b l i c d o e s n ' t w a n t t o o v e r p a y, i t w a n t s w h a t i t f e e l s i s a w o r t h y i n v e s tment,” says Mitchell

Chicago United, an advocacy organization, launched its Five Forward Initiative in 2008 a strategic plan to build a stronger regional economy and build minority businesses of scale The initiative asks for the commitment of CEOs of mid- to large-sized corporations in the Chicago metropolitan area to establish or expand business relationships with five current and/or new local minority firms Nearly 30 companies have committed to doing business with five minority companies for five years

“It's a significant commitment,” says Castillo, president and CEO. Already the benefits have been in multiples “One of the strongest indicators has been the growth of those minority firms in the program Even during the economic downturn, many of them retained jobs and grew Some corporations went above and beyond and have supported companies by introducing them to banking relationships, or helping them with their accounting departments.” Approximately 80-85 firms currently participate in the program T

well out of the station

Practice Requirements

Licensing Requirements

Mobility

Form of Practice

Quality Assurance

Ethics Case Studies – NEW

Peer Review

Education

Knowledgehub – learning management system – NEW

CPE Catalog of Live Programs, Webinars and onDemand Courses

Staff Training Curriculum

In-Firm Training

Practice Management

CPA Marketplace – NEW Succession Planning Services

Marketing Toolkits

CPA vs RTRP Toolkit

Technical Resources

Government Report Review

Checklist – NEW

Staff Subject Matter Experts

Research Specialist

NETWORK Volunteers

Practice Advantage e-publication

G OWTH i n t e g r a t e d

A holistic approach to your company’s next growth spurt is critical to driving top-line results.

By Clare Fitzgerald

Global accounting, tax and advisory firm Grant Thornton’s Growth Wi n s c a m p a i g n s t a r t e d o u t w i t h a f o c u s o n t h e f i r m ’ s “ d y n a m i c c o m p an i e s ” o rg a n i z a t i o n s i n t e n t o n a d a p t i n g t o m a r k e t p l a c e f l u c t u a t i o n s a n d seeking out new growth opportunities.

In working with those companies, Steve Lukens, Grant Thornton’s national managing partner of advisory services, started to find a consistent theme. “After several years of crisis, companies have done as much cost-cutting as they can,” he explains “Dynamic companies are now asking, ‘How are we going to grow?’”

“After years of contraction and stagnation, companies are definitely prioritizing growth. Although profits have gone up for some companies, top-line growth has not,” adds Stephen Wunker, managing director of New Markets Advisors and author of Capturing New Markets: How Smart Companies Create Opportunities Others Don’t

In fact, average top-line growth among global corporations has dropped d r a s t i c

according to a 2011 McKinsey & Company study.

Having weathered what seems like year after year of recession, many companies need to make up lost ground and many are optimistic about their ability to do so According to Grant Thornton’s Business Optimism Index, 75 percent of the nation’s business leaders expressed optimism about their company’s growth prospects at the beginning of the year.

Experts characterize it as cautious optimism, however “Leaders are more conservative now in terms of spending for growth initiatives, which is a good thing,” says Wunker. “Companies are giving people a shorter leash and demanding more information about metrics and how the initiatives are going to be funded.”

Despite economic challenges, the concept of growth retains its allure After all, as Carolyn Hendrickson, Ph D , founding partner and CEO of Chicago-based organization strategy consulting firm Tandem Group, puts it, “If you don’t grow, you don’t succeed ”

But finding growth opportunities in a slow-growth economy takes more than creating a committee or raising prices Whether companies are focused on global expansion, enhanced products and services, organic growth, investing, mergers and acquisitions or any

range of growth drivers initiatives need to be properly plotted, communicated and integrated throughout the organization.

Square one

“Growth can come in a variety of different ways,” explains Lukens “But before companies focus on driving that growth, they need to ask themselves whether their fundamental business is able to supp o r t e x p a n s i o n W h e t h e r y o u r g r o w t h c o m e s t h r o u g h o rg a n i c growth, investing, M&A or anything else, it’s really important to have the basics of the company in order

“Our advice to leaders of any company, large or small, is to take a deep breath, step back and ask, ‘If this goes well, where might our weak points be?’” Lukens continues “Even if you don’t fix everything, it’s so important for leaders to be candid with themselves and to ask themselves if they’re ready A lot of times it makes sense to take six months to get your house in order Everybody wants to grow, but the question is, is everybody ready to grow?”

D o u g B r u h n k e , C E O a n d g r o w t h p a r t n e r a t c o n s u l t i n g f i r m Growth Nation, offers this five-step approach before jumping into strategic growth planning:

1 List all current initiatives and their associated costs

2 Analyze what you’re getting out of your current initiatives based on past results List new ideas and see how they fit

3 F o r a l l t h o s e i n i t i a t i v e s , i d e n t i f y m e a s u r e m e n t s b y w h i c h t o judge your success

4 Prioritize what needs to be done; analyze what should drop off and how you might be able to move money around to get a bigger bang for your buck

5 Set up a system where you can review initiatives every month and evaluate results compared to expectations

“It ends up being an enlightening process,” says Bruhnke “You can really start to see what’s working and what isn’t ”

“It’s critical to define your growth ambitions up front,” Hendrickson adds “Put a number on it If you want to grow by 8 perc e n t , m a k e s u r e e v e r y o n e k n o w s y o u ’ r e p l a y i n g t h e 8 - p e rc e n t game You realize that you may not hit it, but you’re going to be making decisions and playing the game with that goal in mind ” Companies need to go beyond the numerical goal, however, and state the reasons behind their desire to grow “You’re never going to be able to inspire people with just numbers,” Hendrickson notes

Driving growth

Whether it’s improving internal processes, gaining market share, expanding investment portfolios or leveraging new technologies, high-growth companies are likely to pursue several avenues to growth, especially given today’s lagging consumer confidence, regulatory changes, tight access to capital and economic volatility

According to Lukens, middle-market companies in the $50 million to $1 billion revenue range are intently focused on expanding g l o b a l l y “ G l o b a l e n g a g e m e n t i s c r i t i c a l a n d c o m p a n i e s a r e quickly trying to access new markets We’re seeing very big global expansion programs, but companies need to keep in mind that there are a lot of tax, regulatory and cultural implications that need to be considered before pursuing global expansion plans ”

Regardless of global versus local goals, Wunker suggests that s u c c e s s f u l g r o w t h i n t o d a y ’ s e n v i r o n m e n t d e p e n d s o n a b e t t e r u n d e r s t a n d i n g o f

r range of offerings

“ C o m p a n i e s a r e e n c o u n t e r i n g m o r e d i f f i c u l t y r a i s i n g p r i c e s T h e r e ’ s m o r e t r a n s p a r e n c y a n d b e t t e r i n f o r m e d b u y e r s , ” h e explains. “People just aren’t willing to pay much more, and there’s a lot of competition from lower-end competitors All those things make it tough to keep pushing prices up and up ”

Given these marketplace realities, Wunker suggests that companies sell more of whatever products or services they currently offer. “ C o m p a n i e s a r e b e i n g p r e s s u r e d i n t o f i n d i n g n e w m a r k e t s e gments,” he says “And given the overall environment out there, they need to find less contested spaces to try ”

New markets that may look small initially are another hotbed for leaders. “What looks small can eventually get very big,” Wunker notes, citing examples like Apple, GE, Google and Microsoft

And with markets changing faster than ever, sometimes small companies have a leg up on their bigger competitors “Big companies may have more cash to spend, but small companies are more nimble and able to adapt to quickly changing markets,” he says.

Shifting mindsets

I n s o m e c a s e s , t a k i n g a d v a n t a g e o f n e w o p p o r t u n i t i e s r e q u i r e s good timing, the right mindset and a certain amount of luck. However, companies can better prepare to adapt, capitalize on trends and seize opportunities by avoiding some common obstacles, for example, battles between finance and marketing

“ S o m e t i m e s t h e m a r k e t i n g s i d e d o e s n ’ t p r e s e n t i t s p l a n s t o finance in a business case-type framework,” says Bruhnke “It feels like it’s hitting a wall and not getting approved for things Marketing people need to build better business cases and finance people need to realize that not all marketing efforts can be quantified.”

Hendrickson suggests that finance professionals use their analyti c a l a n d p l a n n i n g s k i l l s t o p l a y a b i g g e r r o l e i n t h e s u c c e s s o f growth initiatives

“The way that finance people relate to numbers can make a significant difference to growth,” she says. “Finance tends to provide projections of growth based on past performance This approach can actually limit future growth If the business wants unprecedented growth, leaders need to aspire to growth beyond what they have done in the past. Then the finance people use their analytical skills to figure out what needs to be true to achieve that level of growth. In that way, the numbers help to create new possibilities for growth rather than limiting them They provide the rigor and discipline to do what’s necessary, and make the smart choices to achieve it ”

Wunker advises finance professionals to take cues from venture capitalists and the rigorous but practical methods they employ for ba c k ing ne w v e nture s “ Ve nture c a pita lis ts fa il a lot more tha n average, but they fail very quickly and very cheaply, and when they win they win big,” he says, while also recommending that finance departments give those responsible for exploring growth o p p o r t u n i t i e s a s h o r t l e a s h T h e i d e a i s t o l o o k f o r c l e a r p r o o f points, focusing on a small number of tests or experiments and planning for failures

Wunker also warns that companies are often too focused on farflung projections. “For real growth initiatives to take hold in less charted spaces, finance needs to really concentrate on three to five big assumptions,” he says “Think like a startup CEO Don’t get hung up on whether it’s going to be a $10 million company or a $15 million company, because no one is really going to know

Focus on three to five assumptions and work to prove the assumptions that really count ”

Along the same lines, Wunker points out that leaders shouldn’t worry about fulfilling every aspect of a plan “Too often in established companies the focus is on doing everything right,” he says “But it’s better to focus on a handful of things and get those right The other stuff can come later ”

What’s more, Hendrickson encourages companies to subscribe to “possibility thinking” and avoid a “resigned mindset,” which occurs when leaders are resigned to accept whatever growth has taken place in the past. She also counsels clients to avoid letting circumstances, rather than commitment to growth initiatives, dictate results Companies need to find other ways to achieve their goals when an unforeseen obstacle arises. “If something stops the action, don’t place blame or waste a ton of time analyzing why s o m e t h i n g w e n t w r o n g F o c u s o n h o w y o u ’ r e g o i n g t o b r e a k through that problem,” she says.

Executing change

As companies place more emphasis on developing an integrated plan for growth, they also need to look comprehensively at how to execute their plans

“At the end of the day, growth is about change,” says Hendrickson. “You need to build capabilities to sustain change and maintain adaptability as an organization You need to build the muscle to implement the strategy and have the flexibility to adapt on an ongoing basis.”

To do that, Hendrickson advises companies to align leadership to ensure leaders at two to three levels below the CEO understand and are prepared to execute the strategy. Then the work processes, structures, talent and culture need to be aligned to support the growth strategy

“High-growth companies take a holistic look at how they are going to architect all the changes that need to happen,” she says Essentially, they need to create the cultural conditions for growth to take hold According to Hendrickson, those conditions include having a shared vision, a coordinated plan of action and flexible structures so that teams can come together and disband with ease as needed

Also, everyone in the organization should have a certain amount of what Hendrickson calls “business literacy,” or an understanding of how processes work and how they contribute to the greater goals of the organization And leaders need to foster a culture where staff members handle criticism and conflict in a way that produces breakthroughs, and are given the discretion to make choices each day that will continue the drive towards growth

Bruhnke adds that communication across the organization is critical “Recognize that everyone has different responsibilities, but that in these times, you need to do a good job of pulling everyone together and prioritizing your plans,” he says “Everyone on the team should know the strategy or plan up front, and be a part of the execution. Make sure everybody’s eyes are wide open and everyone knows how the plan is helping the company as a whole ”

No matter what, companies should constantly strive to take forward action. “Even if you fumble things along the way, pursuing something is always better than nothing,” says Hendrickson “You can always make contingency plans and adapt along the way, but it’s important to commit to things that are bigger than what you know how to do and then go after them ”

global impact

By Kristine Blenkhorn Rodriguez

Our global interconnectedness continues to gain column inches on blogs, websites, Twitter and news media. “Interconnected we prosper,”’ trumpets The New York Times While we grasp the big picture, dig ging deeper reveals the four trends that could impact you, your clients and your customers in the years ahead.

One: An Expanding Middle

In their report, Innovating for the Next Three Billion, Ernst & Young examines the emergence of a global middle-class that’s expected to grow to nearly five billion by 2030 These five-billion consumers will wield a predicted purchasing power of $56 trillion Approximately 40 percent of that $56 trillion will be derived from Asia

“Companies, regardless of market, are currently missing a significant and increasingly important opportunity in developing economies,” says Maria Pinelli, Ernst & Young’s global vice chair of strategic growth markets. “They must bring products in line with the income distribution in rapid-growth markets. This requires a fundamental rethinking of innovation and go-to-market strategies.”

Ernst & Young’s report identifies four capabilities needed for companies to “frugally” innovate for the next three-billion consumers: First, customer insight, and the ability to understand the problems customers need solved; second, the willingness to tailor products to customers’ needs; third, a global network of R&D centers that enable companies to leverage global resources and reapply innovation across multiple markets; and fourth, an operations and business model that ensures product innovation that’s appropriate for a lower-income customer base.

It doesn’t matter whether your business is on Main Street or Wall Street, these four global trends will impact it over the next decade.

“Pull a thread here, and you’ll find it ’s connected to the rest of the world.”

The Wasted Vigil, Nadeem Aslam

Charles Krakoff, founder and managing partner of emerging markets consulting firm Koios Associates, agrees that the middleclass is defined by very different purchasing powe r a nd inte re s ts in diffe re nt ty pe s of e c onomie s . “ It de pe nds how y ou de fine middle-class,” he says “In China and India, a middle -c la s s inc ome le v e l is diffe re nt than in Germany and the U.S. Most economis ts re c k on whe n pe r-c a pita inc ome reaches $3,000, that’s when people start buying consumer goods & durables Above $5,000, that’s when things start to get pretty interesting You’re talking motorcycles and other larger ticket items ”

As workers are able to earn more disposable income, luxury goods pervade previo u s l y i m p o v e r i s h e d m a r k e t s . “ I n C h i n a , you already see a market for luxury goods,” says Hans Timmer, development prospects group director at the World Bank. “German cars and luxury products from France are favorites.”

But the picture isn’t entirely rosy While broadly distributed purchasing power can o n l y h e l p t h e g l o b a l e c o n o m y, m i d d l eclass demand puts pressure on resources For example, as demand for finite natural resources such as food, coal, iron ore, steel and oil rise, so too do their prices.

What’s more, says Homi Kharas, senior fellow and deputy director of the Brookings Institution Global Economy and Development Program, “Aggressive lending will be an issue It‘s not just a lack of education, but also a lack of laws that allow fair construction of a household credit score In most developing countries you can’t see if peo-

ple are paying their bills each month And many of them haven’t been exposed to credit and won’t be savvy to make good financial choices.”

Two: She Power

Wo m e n , e s p e c i a l l y t h o s e i n emerging markets, will be a dominant force in the global economy of the future, taking increased leadhip responsibilities across business, nment and education i t i o n a l l y, m o s t w o m e n l i v i n g i n emerging economies have lacked a proper e d u c a t i o n a n d f a m i l y s u p p o r t f o r t h e i r desire to work. As local laws and cultural n o r m s c h a n g e , h o w e v e r, s o t o o d o t h e number of women entering the workforce.

DeAnne Aguirre and Karim Sabbagh are t h e B o o z p a r t n e r s w h o c o i n e d t h e t e r m “third billion” when analyzing an emerging population of three-billion new participants in the global marketplace, includi n g 8 7 0 m i l l i o n p r e v i o u s l y u n d e r- l e v e raged or suppressed women They cite seve r a l r e a s o n s w h y t h i s 8 7 0 m i l l i o n w i l l have a profound and rapid effect on the global economy

For starters, the women of the third billion aren’t limited to one country, but rather are dispersed in every part of the globe. Also, when women join a more educated workforce or begin a business, they tend to have fewer children and, as a result, the social priorities of the culture begin to change Essentially, it becomes easier for women to gain support for leading more independent lives.

Added to this, women are more likely to invest a larger proportion of their household incomes in the education of their children. As those children grow up, their economic impact increases further This helps to explain why, as a report issued by the U n i t e d N a t i o n s D e v e l o p m e n t F u n d f o r Wo m e n f o u n d , i n v e s t m e n t s i n w o m e n ’ s enterprises in developing countries yielded greater long-term benefits to the economy a s a w h o l e t h a n i n v e s t m e n t s i n m a l eowned enterprises

Retailing giant Walmart is just one exa m p l e o f a c o m p a n y b e i n g p r o a c t i v e i n advancing the “she power” trend. In late

2 0 11 , C E O M i k e D u k e a n n o u n c e d t h e G l o b a l Wo m e n ’ s E c o n o m i c E m p o w e rment Initiative. The company is using its global size and scale to empower women throughout its supply chain by means of v a r i o u s i n i t i a t i v e s , s u c h a s i n c r e a s i n g sourcing from women-owned businesses and job training and education Walmart Brazil is hiring female construction worke r s t o a s s i s t i n b u i l d i n g i t s n e w s t o r e s Walmart China is helping female farmers m a k e t h e i r a g r i c u l t u r a l p r a c t i c e s m o r e s u s t a i n a b l e a n d p r o d u c t i v e A n d t h e l i s t goes on around the globe.

“Walmart’s global women’s initiative has the potential to be a game-changer for women and for economic growth,” says Melanne Verveer, U.S. ambassador-at-large for global women's issues. “By tapping its core competencies as a global retailer, Walmart will empower more women to access markets and develop careers in the global supply chain, transforming their lives and the lives of their families ”

Such moves aren’t purely philanthropic; they make perfect business sense “It‘s good for economies to have women participate at higher rates because it means maximizing the full potential of resources Exclude the women and you’re already at a disadvantage of 50 percent,” says Timmer

Three: BRICs & CIVETS

When the chairman of asset management at any major investment bank talks about global growth, a media firestorm usually ensues. Whether public opinion declares him a prophet or a fool, time is the only true determination of his clairvoyance

S o i t i s w i t h J i m O ’ N e i l l o f G o l d m a n S a c h s , w h o v e n t u r e s t h a t b y 2 0 2 0 , t h e BRICs (Brazil, Russia, India and China) will account for 50 percent of growth in global gross domestic product (GDP) Our experts may be as split as public opinion on the veracity of this statement.

“Growth in advanced countries as a whole is likely to be fairly limited because of low productivity growth and aging populations,” says Kharas. “While they still will be growing, they’ll probably be growing at rates of slightly under 2 percent, whereas

the world as a whole will be growing at a rate of somewhat over 2 percent.”

T h e r i p p l e e f f e c t o f g r o w t h v a r i a n c e s will affect global trade. “As the GDPs of developing countries go up, you will see m u c h m o r e r a p i d t r a d e a m o n g s t t h e m , ” says Kharas. “Advanced countries still will be large markets, but it’s hard to gain market share in a market that’s not growing, so companies will focus on developing countries where growth is most rapid You’ll see resulting impacts in the financial services arena, which tends to follow trade, as do mergers and acquisitions ”

In Timmer’s opinion, O’Neill’s take on the impact of BRICs is an understatement “ O v e r t h e l a s t 1 0 y e a r s , 9 0 p e rc e n t o f g l o b a l g r o w t h i n i n v e s t m e n t s h a s c o m e from developing countries Therefore, the role of the BRICs in the global economy i s e v e n m o r e c r i t i c a l t h a n t h e i r s h a r e i n GDP suggests ”

Krakoff declares his bias up front “When you have asset managers coining terms that lump together disparate countries and economies, I take issue with that Why these countries? There are other countries that represent opportunities that are equally attractive, if not more. Indonesia by population, it’s the fourth largest country in the world. Thailand also has experienced tremendous growth; its political instability hasn’t had much effect on this. People are afraid of Nigeria but its economy is diversifying. Petroleum will still be an important component but lots of things are happening to give it a broader industrial base. If I were to choose which economy will have greater global importance in 2050, I’d bet on Nigeria over Russia I think the BRICs are an artificial construct with not much tying them together, really Other countries will come on quite strong ”

E v e n s o , K r a k o f f s u m m a r i z e s w h a t h e s e e s a s t h e B R I C s ’ p o t e n t i a l g l o b a l e c onomic impact “China is quite authoritari a n b u t v e r y s u c c e s s f u l e c o n o m i c a l l y and will be even more so if it privatizes Brazil has tremendous potential but will it a c h i e v e i t ? B r a z i l ’ s e c o n o m y i s g r o w i n g slowly this year; inflation has been a problem India has enormous potential, but has

had this potential for a long time. The government needs to clear barriers to investing in India before that economy can grow t h e w a y i t s h o u l d R u s s i a i s i n a d e m og r a p h i c d e c l i n e ; i t ’ s l o s i n g p o p u l a t i o n P e t r o l e u m a n d g a s a r e r e a l l y t h e o n l y industries in Russia, so its fortunes are tied to the price of oil and gas ”

Turning our attention to CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), the estimated average rate of growth for these countries is set at 4 9 percent annually through 2030, according to The Economist’s Intelligence Unit

“The rationale for this group of countries i s t h a t t h e y ’ r e i n d i c a t i v e o f t h e f a c t t h a t r a p i d g r o w t h i n t h e d e v e l o p i n g w o r l d i s broader than just the BRICs,” says Kharas “ I ’ d a d d M e x i c o . I c o u l d a d d A rg e n t i n a , Chile, Malaysia, Thailand to this grouping, as they’re all also growing rapidly ”

K h a r a s c a u t i o n s t h a t t h i s m a y b e t o o diverse a grouping, explaining that, “Indonesia and Vietnam grouped with Egypt is c o u n t e r i n t u i t i v e i t ’ s a n A s i a n i n f l u e n c e v e r s u s a E u r o p e a n o n e S o u t h A f r i c a i s l i n k e d t o n a t u r a l r e s o u rc e s , a n d s o t o China, while Colombia is closely linked to the United States ”

“These countries have similar characteri s t i c s t o t h e B R I C c o u n t r i e s ; t h e y ’ r e n o t necessarily all second-wave economies,” s a y s Ti m m e r. “ C o l o m b i a , I n d o n e s i a a n d Turkey are richer in per-capita terms than some of the BRICs I think these countries will continue to fare well because of their stable macroeconomic environment, particularly Indonesia, Vietnam and Colombia; here you see stable governments, low inflation and prudent fiscal policies ”

Four: The Debt Effect

By 2020, the debt-to-GDP ratio for developed countries will reach 133 percent of GDP, according to Deutsche Bank While many economists expound on the unhealthy economic climate this creates, Timmer sees it differently.

“ Yo u c a n ’ t s a y t h a t o n c e y o u p a s s a t h r e s h o l d o f d e b t t h e r e w i l l b e s p e c i f i c c o n s e q u e n c e s . I t d e p e n d s , ” h e e x p l a i n s . “My guess is that at the moment, we are not that far off from the 133 percent figure;

my guess is it’s already at 120 percent for developed countries In Japan, debt is at 2 4 0 p e rc e n t , b u t t h e f a l l o u t i s h a r d l y noticeable. It’s at 100 percent in Spain and Ireland, but there you see enormous fallout So, circumstances differ ”

T h r e e m a i n f a c t o r s d e t e r m i n e t h e i mpa c t of the de bt-to-GDP ra tio, s a y s Timmer “First, who owns the debt? In the case of Japan, it’s the people of Japan who save for their retirement; they own the debt It’s not foreign investors banks that can sudd e n l y w i t h d r a w f u n d s a n d c r e a t e h u g e problems So, the supply of funds in Japan is much more stable In Ireland or Spain, t h e d e b t i s f o r e i g n o w n e d a n d t h e y a r e s ma ll c ountrie s , s o its re la tiv e ly e a s y for investors to move out of those countries

“Second, the overall size of a country’s e c o n o m y w i l l u s u a l l y d e t e r m i n e h o w m u c h c o n f i d e n c e i t g e n e r a t e s , ” Ti m m e r continues. “Third, there’s the overall econ o m i c e n v i r o n m e n t . G o v e r n m e n t i t s e l f d o e s n ’ t g e n e r a t e t h i s p r o b l e m . A l a c k o f competitiveness, a weak financial sector, slow to no growth these all contribute, a n d f i n a n c i a l l e a d e r s h a v e t o o w n t h a t responsibility also.”

Meanwhile, Kharas doubts the veracity o f t h e d e b t - t o - G D P r a t i o . “ I t h i n k t o d a y there‘s a huge amount of discussion about undertaking fiscal reform and preventing the rise of debt in proportion to GDP in all the major countries You definitely see it in the U S proposed action to taper the size of the deficit and achieve financial sustainability You see it in Europe with discussions about fiscal reforms Tight fiscal polic ie s a re be ing e nc oura g e d The g rowing c o n s e n s u s a m o n g p o l i c y - m a k e r s i s t h a t debt should be limited ”

Any one of these four trends is indicative of a thread that connects business communities around the globe As a global middleclass exercises its buying muscle, as women in the workplace change both national and corporate cultures, as the global community works together to reduce debt overall, we pull the interconnected threads What remains to be seen is if the pulling results in a tighter-knit global community or an unraveling one

IT CFO & The Modern

By Carolyn Kmet

Information technology is a common thread that weaves through all aspects of an organization It facilitates data sharing and analysis in all departments, from payroll to production. Due to its omnipresent nature, it’s critical for today’s CFOs to be intimately versed in areas such as cloud computing, information management and data security, and they need to understand the associated risks and benefits.

CLOUD COMPUTING

These days, there’s a lot of discussion about “moving to the cloud.” True enough, cloud computing offers many advantages, including the potential to r

between an organization’s functions and departments. Also, since the application itself is stored on an external server, companies don’t have to pay for and maintain the hardware internally However, in order to evaluate whether to allocate capital to cloud computing, CFOs have to understand how it may impact the organization in the long term.

i e n c i e s a n d access to real-time data, but the overall implementation and infrastructure costs, revised internal processes and data risks,” explains Keith Richmond, CFO of GreenRope, a cloud-based integrated software platform

Benjamin Mulling, CFO of TENTE Casters, Inc , says cloud-based computing has become so popular because the initial capital outlay isn’t as high as in traditional ERP purchases “Also, the data is readily accessible from almost any location without needing a client-based software install ” In today’s changing environment, mobility is an absolute necessity for CFOs.

Dig deep into what’s really driving the dollars, however, says Prashant Kumar, president and CEO of MLC & Associates, a management consulting firm. “Cloud technology providers often inflate numbers by including man hours saved, so consider whether you are actually going to lay off employees They also may include the cost of hardware and software, which you may have already purchased,” he explains. Instead of relying on what the vendor estimates, CFOs should look for capital expenditure that can be minimized or converted to operating expenses

comes to security “Because multiple users can access files, look for applications with stringent user-permission control settings,” advises Dave Phillips, director of marketing for Quantrix. For example, he explains that CFOs need to determine who has read-only rights versus data-entry rights They also need to control who can change existing information, formulas or settings Furthermore, the ability to view historical changes, as well as who made them, is an important security feature

In addition to securing user access, CFOs need to safeguard the physical data “Look for vendors who are working with reputable d a t a s t o r a g e f i r m s u s i n g h i g h - a v a i l a b i l i t y s e r v e r s a n d s t r i n g e n t security controls, and always make sure that you can download all your data at any time,” Phillips suggests.

At the end of the day, though, “With data being stored offsite at a secure facility, data security and backup risk is one less thing that a CFO has to plan for or worry about,” Mulling comments

A last word of advice: While cloud computing enables companies to aggregate data from different sources, a lack of coordination might result in siloed projects and data, which hinders cross-functioning and data analytics. As such, CFOs need to work closely with their CIO and IT department to gain a deeper understanding of business opportunities and their risks

DATA SECURITY

Wi t h h i g h - p r o f i l e c o r p o r a t e d a t a l e a k s c o n s i s t e n t l y h i t t i n g t h e news, CFOs are motivated more than ever to secure an organization’s intellectual property Stephen Gregorio, senior vice president and CFO of Verdasys, an enterprise information protection software company, says that protecting key data from misuse or theft can affect several aspects of a company’s value chain, including customer information, new product manufacturing pricing or market introduction, and core competitive advantage

He further comments that comprehensive data security strategies have to originate with executive leadership “The success of a well thought out IP protection program depends entirely on senior management’s seriousness about and commitment to investing the time and funds necessary to support a culture that is accountable for data protection.”

Without that leadership, companies might end up making ad hoc investments in data security, which defeat the organization’s overall objectives To put it plainly, these investments may save a few dollars in the short term, but could prove counterproductive in the long term.

“It results in serial-point technology acquisitions that attempt to address security problems that are holistically linked in a reactive fashion and in isolation,” Gregorio explains “It invariably adds a d d i t i o n a l o v e r h e a d a n d c o m p l e x i t y t o a b u s i n e s s p r o c e s s t h a t must run efficiently and accurately ”

In Gregorio’s experience, the most successful companies are the o n e s w h e r e l e a d e r s h i p h a s m a d e i n f o r m a t i o n p r o t e c t i o n a t r u e s t r a t e g i c i n i t i a t i v e a n d i n c o r p o r a t e d i t i n t o l o n g - t e r m s t r a t e g i c planning. “This usually requires the CFO to have an active voice t o e n s u r e d a t a s e c u r i t y i n v e s t m e n t s s u p p o r t a s i n g l e l o n g - t e r m strategy and avoid costly, tactical purchases,” he says

CFOs must contribute to the early planning stages in order to ensure the expected end results and their alignment with corporate strategy “As CFOs sit at the intersection of overall corporate strategy and asset maximization, they can, and should, provide con-

sultation for how to measure the impact of data security solutions, and whether the forecasted benefits support the stated objectives,” Gregorio comments

Another aspect of data security to consider is its impact on financial statements and corporate valuation. In October 2011, the SEC issued broad guidelines on how companies should disclose cyber s e c u r i t y r i s k s a n d c y b e r i n c i d e n t s i n t h e i r f i n a n c i a l s t a t e m e n t s Gregorio explains that, “These new disclosures include the costs i n c u r r e d t o p r e v e n t c y b e r i n c i d e n t s , m i t i g a t e d a m a g e s a n d a s s e r t e d / u n a s s e r t e d c l a i m s f r o m a t t a c k s T h e y a l s o s u g g e s t t h a t companies self-assess their overall exposure to cyber threat risks, including deficiencies in data-handling controls or procedures.”

CFOs have to be able to assure shareholders and regulators that the issue of data security won’t negatively impact their company’s value or result in a loss of intellectual property “The CFO is the unique corporate officer who can properly measure data security solutions against strategic business objectives, and thus is becoming an ideal focal point to help determine which investments can best protect their organization’s long-term value and reputation,” says Gregorio.

BUSINESS INTELLIGENCE

With the fast pace of today’s business environment, getting informa tion from the rig ht pe ople a t the rig ht time is a c ompe titiv e advantage Since CFOs are responsible for helping to shape the strategy and direction of the organization, it’s critical that they understand how to convert data into actionable information, and how to disseminate it in a timely manner to the right departments. Specifically, CFOs have to be uniquely adept at considering what day-to-day information is required at the operational level.

“The CFO is critical in defining what information to distribute, because the finance function has a lot of knowledge that can be s ha re d,” Kuma r e x pla ins “ A C F O who unde rs ta nds the importance of information can take the organization’s strategic goals and map them back to financial goals at all levels of the organization.”

K e v i n B e a s l e y, C I O f o r VA I , s a y s C F O s a r e i n c r e a s i n g t h e i r investments in business intelligence (BI) because it “enables them to create their own data and process mining, reporting, predictive analysis and dashboards to achieve a clear picture of their business o p e r a t i o n s F u r t h e r m o r e , B I a l l o w s C F O s t o m a k e p r o a c t i v e , knowledge-driven decisions for their businesses while saving a significant amount of money and time ”

It‘s a logical step to define what’s important to the organization before investing in the information technology necessary to effectively and efficiently share that knowledge By investing in flexible platforms, organizations can achieve stronger data analytics and digital marketing, which creates a competitive advantage in the marketplace

“CFOs who invest in business intelligence recognize sufficient R O I a n d l o n g - t

observes, adding that, “Delivering accurate and timely reports where leaders can effectively respond to business operations drives knowledge management CFOs can aid knowledge management by ensuring that all IT applications are integrated within the reporting structure and are in real time Without complete integration of the applications, the system will produce lackluster information and delay management projections ”

IT & SOX

Ensuring IT applications and processes are compliant with Sarbanes-Oxley (SOX) can be a daunting task for any CFO, particularly since they extend across multiple departments and functions, including application management, data management, reporting and security

For example, SOX requires protection of sensitive user information; at a minimum, this requirement draws on both logical and physical security functions, database administration and business application functions

“A CFO may be involved in any of the IT functions, but it is necessary to understand how a simple SOX compliance requirement might require the coordination of multiple IT functions,” Kumar explains “This understanding helps the CFO streamline and leverage efforts towards other compliance regulations such as HIPAA and GLBA ”

Since SOX compliance affects all business units, it’s necessary for the CFO to be involved at every level, from controlling programmers to restricting access to particular types of data “Failure to comply with SOX regulations results in legal issues, and CFOs are responsible for ensuring their company is in compliance with these regulations,” says Beasley. “It’s critical that CFOs are in constant communication with IT to ensure those guidelines are met ”

What’s more, Peter Minck, vice president of business solutions for Redwood Software, says CFOs have to be intimately aware of how to maintain a n a u t o m a t i c a u d i t t r a i l f o r S O X c o m p l i a n c e . “ T h e y n e e d t o k n o w w h a t points are monitored, how complete the monitoring is, and how the data is stored and secured,” he advises “CFOs should be able to understand and use the appropriate IT process resources that maintain the audit trail and keep a close watch on all activities that support compliance functions.”

WORD OF WARNING

If a CFO lacks IT insight or fortitude, he or she may end up relying too heavily on the IT department, which could affect the company’s long-term goals and performance. “Relying on IT to produce an ROI assessment will lack the financial prowess of a CFO and could prove to be quite costly,” says Richmond “For instance, having on-premise servers and infrastructure creates a costly capital expenditure and may hinder overall growth due to the diversion of investment dollars to these areas.” As such, it’s imperative that all CFOs stay plugged into and up-to-date on IT issues and understand the infrastructural needs of the organization

Being able to react quickly to changes in the IT environment is vital to today’s CFO function. “Without insight into technology and information syste ms , C F Os a re re a lly ha ndic a pping the ms e lv e s in how the y ma k e de c isions,” says Mulling “Lack of knowledge in the IT area makes it difficult for a CFO to know what technological capabilities there are to improve the performance, efficiency and effectiveness of the management accounting roles that they are required to be proficient in ”

IT RISK ALERT

Prashant Kumar, president and CEO of management consulting firm MLC & Associates, outlines m a j o r r i s k s t h a t C F O s s h o u l d w a t c h f o r w h e n evaluating IT investments:

n B u s i n e s s C o n t i n u i t y R i s k : C F O s a r e o f t e n unaware of the impact of a natural disaster or any other major event to their organization, especially from an IT perspective. What if systems aren’t available for days or weeks? How will the org a niz a tion's re v e nue s a nd re c e ivables be affected? Often, IT prioritizes systems based on the footprint (number of users) in the organization rather than the criticality to business operations The CFO must be aware of t h e p r i o r i t y a s s i g n e d b y I T t o e n s u r e i t ’ s aligned with business-critical functions.

n Data Security Risks: Data security leaks have wreaked havoc on many unsuspecting companies. Every organization has some data that is sensitive While it’s impossible to completely secure data against every attack, it’s important to identify such data, and have a good plan to both secure it and mitigate risks in the event of a breach

n Project/Technology Risk: Many IT projects fail While there may be a variety of reasons, the bottom line a lwa y s fe e ls the big g e s t impa c t. Every IT project plan or new technology adoption initiative should define and quantify the risk of the implementation failure.

n Outsourcing Risk: IT outsourcing has its own risks, especially with volatile currencies and a c h a n g i n g i n t e r n a t i o n a l c l i m a t e C F O s m u s t develop a backup plan in case all doesn’t go as intended

n Brand Risk: Social media is a great instrument to grow brand awareness, but it also can be used against the organization. CFOs must be acutely aware of the risks and constantly monitor social media outlets

Is it time to consider a merger?

We can make the decision a Win-Win!

We’ve completed 15 separate mergers over the past 20+ years. You’ll work with us, not for us… and become more profitable! Contact me to learn more: Earl Holtzman, Managing Partner

Phone: 847.213.2100

Email: earlh@msco.net

Michael Silver & Company CPAs Skokie, IL 60077 www.msco.net

Peer Review

Mueller Prost PC, a St. Louis, MO based CPA firm, is offering firm to firm engagement and system peer reviews as well as readiness assessments. Our team consists of individuals with over 100 years of combined auditing and assurance services experience in the areas of:

Manufacturing & Distribution Construction & Real Estate Non-Profit

ERISA Governmental

Effective for all license renewals on or after July 1, 2012, the State of Illinois is now requiring satisfactory completion of peer reviews.

Don’t get left behind. Prevent costly delays in renewing your Illinois State license by scheduling your peer review today!

Please contact:

John E. Oeltjen, CPA 314-480-1302 joeltjen@muellerprost.com

BUY OR SELL AN ILLINOIS ACCOUNTING OR TAX PRACTICE

PRACTICES FOR SALE:

Downtown Chicago CPA Practice

gross $242K; West Central IL

CPA Practice gross $207K; Rochelle CPA Practice gross $110K; Oregon CPA Practice

gross $217K; NW Chicago Suburbs CPA Practice gross $700K; Lombard CPA Practice gross $206K; Chicagoland EA Practice

gross $1 1M; SE Missouri CPA Firm gross $700K

For practice details, call 1-800-397-0249 Or, visit us at www.accountingpracticesales.com to inquire about available opportunities and register for free email updates

THINKING OF SELLING

YOUR PRACTICE?

Accounting Practice Sales is the leading marketer of accounting and tax practices in North America We have a large pool of buyers, both individuals and firms, looking for practices now We also have the experience to help you find the right fit for your firm, negotiate the best price and terms and get the deal done To learn about our risk-free and confidential services, call Trent Holmes at 1-800-397-0249 or email trent@accountingpracticesales com

VALUATION OF YOUR CLIENT’S BUSINESS OR PRACTICE

By: Crandall & Brackett, Ltd 630 653 7922

email: robert@crandall-brackett com

Web: www.crandall-brackett.com

Our only service is performed on your behalf in a mutual engagement setting From basic research to a full valuation, we tailor our services to your needs We author, teach and participate on policy setting committees and boards within the valuation profession

Is your website attracting enough business?

Get practical tips for making your website part of a profitbuilding plan For your free copy, call Mostad & Christensen at (800) 654-1654 or go to: www mostad com/kc/ss

❏ Concentrates in agricultural bankruptcy -Chapters 11 and 12

❏ Grain Elevator & Ethanol Plant Insolvency

Illinois CPA Society

awardwinners

Lifetime Achievement Award

Sheldon P. Holzman, CPA/CFF, CFE Retired Partner, Baker Tilly Virchow Krause, LLP

Outstanding Leadership in Advancing Diversity Award

Kenton J. Klaus, CPA Partner, Deloitte Tax LLP

Emerging Leader in Advancing Diversity Award

Richard Cerda, CPA Senior Manager, Ernst & Young LLP

Outstanding Educator Awards

Leslie Van Wolvelear, CPA Associate Professor of Accounting, Oakton Community College

James C. Young, PhD, CPA Chair, Department of Accounting and Crowe Horwath Professor of Accountancy, Northern Illinois University

Time and Talent Public Service Volunteerism Awards

Robert E. Cameron, CPA

Cameron, Smith & Company, PC

David J. Hensley, CPA, EA

David J. Hensley, CPA, Inc.

Roann R. Kopel, PhD, CPA Eastern Illinois University

Special Achievement in Volunteerism Awards

Burton W. Goode, CPA

Burton W. Goode, CPA

Adrian W. (Ted) Hollander, CPA Complus, Inc.

Distinguished Service Awards

Joseph F. Bigane III, CPA Wolf & Company LLP

Taxation State and Local Committee

Ryan Brady, CPA Grant Thornton LLP

Accounting Principles Committee

Thomas E. Brean, CPA

Grant Thornton LLP

Not-for-Profit Organizations Committee

Jeremy A. Dubow, CPA NDH Group, Ltd

Taxation Flow-Through Entities Committee

James J. Gerace, CPA BDO USA, LLP

Audit & Assurance Services Committee

Michael W. Grove, CPA Logan Consulting

Chicago South Chapter

John A. Hepp, CPA

Grant Thornton LLP

Accounting Principles Committee

Leslie J. Kotrba, CPA

Leslie J. Kotrba, CPA

Taxation Practice & Procedures Committee

Phillip A. Levsky, CPA FGMK, LLC

Taxation Individual Committee

Susan Mairo, CPA

O'Hare Chapter

Linda M. Martin, CPA

CliftonLarsonAllen LLP

Central Chapter

Thomas B. Murtagh, CPA

Wolf & Company LLP

Taxation Business Committee

Larry E. Navoy, CPA

Larry Navoy, CPA

Fox Valley Chapter

Anthony J. Pagliuco, Jr., CPA

Pagliuco Opalacz & Associates P.C.

Legislators Tax Guide Task Force

Luis V. Plascencia, CPA

Luis V Plascencia & Associates LLC

Legislators Tax Guide Task Force

Kimberly R. Rice, CPA, MST R&M Consulting LLC

Women's Executive Committee

Mark F. Schultz, CPA

Dugan & Lopatka CPAs PC

Peer Review Report Acceptance Committee

Victor V. Scimeca, CPA

Victor V. Scimeca, CPA

Legislators Tax Guide Task Force

Michael J. Singer, CPA

Michael J. Singer & Co., P.C.

Taxation Practice & Procedures Committee

Michael A. Stephens, CPA

Mueller & Company LLP

Peer Review Report Acceptance Committee

Penelope J. Yunker, PhD, CPA

Outstanding Educator Award Task Force

The Illinois CPA Society is proud to recognize the following award winners and congratulate them on their accomplishments.

Caitlin Petersmark ICPAS Marketing Manager petersmarkc@icpas org

Oop s, Did You See That on Faceb ook?

As you transition from student to professional, definitely keep an eye on your online persona Lest a prospective employer’s Google search pulls up that infamous photo of your friend John hugging a store mannequin after one too many, take the time to Google yourself beforehand Not only that, but be on the lookout for Facebook updates If you haven’t been “Timelined” yet, for instance, know that it’s coming By the end of 2012, every profile will be combined with your wall postings for a more “holistic” experience And another major change is in the works automatic sharing: Everything you read or watch online will be automatically shared with your Facebook followers thanks to Open Graph Makes me want to run home and check my privacy settings right now! [CP]

Br ing You r Netwo rks Up a No tch

Derrick Lilly ICPAS Publications Specialist lillyd@icpas org

As Graucho Marx famously stated, “I refuse to join any club that would have me as a member ” While you may not share his sentiment, he did make a good point: The quality of your networks matters Specifically, look for two factors: easy access to peers and the ability to tap into mutual networks First, a network is only useful if you have access to the exper tise of fellow, like-minded professionals Organizations that coordinate in-person events are a definite plus, enabling you to build ties that don’t always come naturally online Second, many online communities pride themselves on connecting professionals through mutual networks, and often collaborate with similar organizations to bring more people into the fold This is usually a good indication that a given professional group is doing more than mere lip service to the concept of networks

Get star ted by joining the Illinois CPA Society on Facebook and on LinkedIn today! [JB]

B e a J A Vo l un t e e r!

Thanks to a par tnership between the Illinois CPA Society and Junior Achievement (JA), ICPAS members have the oppor tunity to present in-classroom money management skills to elementar y school children in Chicago, Carol Stream and Wheeling Visit w w w i c p a s o r g / v o l u nt e e r for dates, locations and FAQs

W I N T H I S : $ 2 5

In his “Tax Decoded” column, which state does Keith Staats note as having recently changed its sales tax treatment of deal- of-the - day vouchers? ICPAS LinkedIn Group members can email their answers to PetersmarkC@ICPAS.org to be entered into a $25 gift card drawing Not an ICPAS LinkedIn member? Join today!

Financial Analysts Top the List of Entr y-Level Jobs in Demand

The U S Bureau of Labor Statistics continues to report that accounting and finance is one of the strongest job growth areas across the nation And according to Accounting Principals [accountingprincipals com], “financial analyst” is the top entry-level accounting and finance job today, par ticularly amongst investment banks, insurance companies, asset management firms and public companies looking for professionals to forecast growth and prepare quar terly financial statements Is it time to brush off and spruce up your resume? [DL]

KNOW THIS: $42,200

OPENING SALARY FOR A FIRST-YEAR

FINANCIAL ANALYST AT A MIDSIZED COMPANY. Brilliant Financial Staffing

Jacqueline Babb INSIGHT Contributor jacbabb@gmail com

You want to make your client’s vision a reality. So we make that our goal as well. Whether we provide treasury management or 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.

bmoharris.com/redframe

A partner who works as hard as you do.