Insight Magazine - Fall 2015

Scapegoating

How

lead

trending topics

To learn how we put the right accounting and finance talent in the right positions, contact us today.

Todd Shapiro

today ’sCPA

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Grab a Seat at the Table

this is the concept at the heart of ICPAS’ advocacy efforts on behalf of our members & the accounting profession in general.

Advocacy is an integral component of the Society's mission “Enhancing the Value of the CPA Profession ” That means we’re constantly working to ensure a business climate that is supportive of and favorable to our profession through ongoing interactions with influencers regulators and legislators in the federal and state government, and organizations such as NASBA and the AICPA Here are a few of the many ways we're doing that

Last May, a number of ICPAS members and I flew to Washington, DC to attend the AICPA Council meeting Over three days, we discussed issues impacting the profession and heard from various congressional leaders Most importantly, on the last day we met with Congressman Robert Dold and the staffs of Congressman Peter Roskam and Senator Richard Durbin to discuss a range of issues that impact CPAs, including improving IRS taxpayer services and responsiveness (we requested that they sign a letter to the IRS commissioner), preserving cash basis accounting in the tax code, and the Mobile Workforce State Income Tax Simplification Act of 2015, which makes it easier for CPAs to work across state lines. Congressman Roskam subsequently agreed to co-sponsor this bill.

The Society also focuses significant advocacy efforts on Illinois government officials in the executive and legislative branches Advocacy is truly all about relationships, and Marty Green, the Society’s VP of Government Relations and “Our Man in Springfield,” has built up a strong rapport with officials over the years This is key when bills or regulations come forward that may impact CPAs In the past year alone, we’ve addressed the Public Accounting Act, which governs the profession, regulatory rules that interpret the Act such as allowable CPE, a possible tax on professional services and legislation that may impact tax preparers Our overarching goal is to ensure a positive climate for business and accounting professionals In November, the Society’s Board of Directors will be holding its Board meeting in the heart of Illinois government the capitol in Springfield We hope to meet with the governor, comptroller, legislators and IDFPR and IDOR officials to discuss issues that are front and center for the accounting profession

Advocacy is not limited to Washington and Springfield, however. Frequently, we have government officials attend our Town Hall Forums and we also hold a number of legislative events in conjunction with our chapters. These forums give our government officials a chance to hear about issues affecting the profession and interact directly with members. I encourage you to attend a Town Hall Forum or chapter legislative event and, while there, say hi to officials who may be attending and let them know your thoughts on issues impacting CPAs Your interaction keeps them coming back

Advocacy is a never-ending job and, in this political climate, requires constant vigilance Through our Government Relations staff and volunteers, we will continue to advocate for you and the profession

INSIGHTS & SOCIETY NEWS FROM ICPAS PRESIDENT & CEO TODD SHAPIRO

Illinois CPA Society President & CEO

INSIGHT MAGAZINE

Publisher/President & CEO Todd Shapiro

Editor-in- Chief Judy Giannetto

Art Direction & Layout Judy Giannetto

Production Design Rosa Garcia

Assistant Editor Derrick Lilly

Photography Jay Rubinic, Derrick Lilly, Nancy Cammarata

Circulation Carl Siska

National Sales & Advertising

Michael W Walker

The RW Walker Company

P: 213 896 9210

E : mike@rwwcompany com

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

ICPAS OFFICERS

Chairperson, Edward J Hannon, CPA, JD, LLM Quarles & Brady LLP

Vice Chairperson, Scott D Steffens, CPA Grant Thornton LLP

Secretary, Lisa A Hartkopf, CPA Ernst & Young LLP

Treasurer, Margaret M Hunn, CPA, CFE, CFF Rozovics Group LLP

Immediate Past Chairperson, Daniel F Rahill, CPA, JD, LLM FGMK, LLC

ICPAS BOARD OF DIRECTORS

Brent A Baccus, CPA, Washington, Pittman & McKeever, LLC

Jared J Bourgeois, CPA/ABV, CFE PricewaterhouseCoopers LLP

Terry A Bishop, CPA, Sikich LLP

Rose Cammarata, CPA, CGMA, CME Group Inc

Jon S Davis, CPA, University of Illinois at Urbana

Rose G Doherty, CPA, Legacy Professionals LLP

Eileen M. Felson, CPA, CFF, PricewaterhouseCoopers LLP

Gary S Hart, CPA, MBA, Gary Hart & Associates, Ltd

Jonathan W Hauser, CPA, KPMG LLP

David V Kalet, CPA, MBA, BP Products NorthAmerica, Inc

Thomas B Murtagh, CPA, JD, BKD, LLP

Elizabeth S Pittelkow, CPA, CITP, CGMA ArrowStream, Inc

Kelly Richmond Pope, Ph D , CPA, DePaul University

Kevin V Wydra, CPA, Crowe Horwath LLP

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, in Spring, Fall, Fall, Winter, by the Illinois CPA Society, 550 W Jackson, Suite 900, Chicago, IL 60661, USA, 312 993 0407 or 800 993 0407, fax: 312 993 7713 Copyright © 2015 No part of the contents may be reproduced by any means without the written consent of INSIGHT Permission requests may be sent to: Publications Specialist, at the address above Periodicals postage paid at Chicago, IL and at additional mailing offices POSTMASTER: Send address changes to: INSIGHT, Illinois CPA Society, 550 W Jackson, Suite 900, Chicago, IL 60661, USA

QUESTIONS: Contact Member Services at 800.993.0407, option

SEEN HEARD

of mentored small businesses succeed versus 30% of those that are not. [businessadvising.org]

HOW TO

Become a Business Blogger

Fresh, original content is a great way to boost traffic to your website, build a reputation and grow your social media presence Here are some quick tips from Karen Reyburn at The Profitable Firm to get you started

1 Identify a few themes: List the top three issues you confronted over the week, e g cloud computing, audit quality and R&D tax credits

2 Pic k a topic: Select the theme that you ’ re most interested in or have the most knowledge of, e g R&D tax credits.

3 Explain what happened: What changes were announced or what did you tell your client about the credit? E g “My client received $17,000 with the R&D tax credit ”

4. Write a headline: Turn the happening into a catchy title, e g “How to Use the R&D Tax Credit to Access Thousands ”

5. Draf t an outline: Bullet the important points, e g Why do you need to know about the R&D credit? Who’s eligible? etc

M&As Keep Ramping Up

The first six months of 2015 had one of the strongest M&A starts of recent times, with values jumping 55% to $1 143 trillion And Ernst & Young LLP (EY) predicts the second half of the year will see even more activity According to EY research, more than 50% of US companies are planning acquisitions over the next 12 months, and 89% are planning lower middle-market deals in the next year The improving economy, sustained low interest rates, and a strong US dollar are driving the trend What ’ s more, many companies are looking at divestitures, carve-outs, splits and spins to optimize their growth and focus on core assets

In fact, more than half of surveyed companies expect the number of strategic sellers to increase in the next year

6 Flesh out the details: Elaborate on each bullet by adding a tip, how to or factoid, e g “The R&D credit is widely underutilized, and could access thousands ”

7. Edit your post : Read it out loud, and have someone else take a look at it to ensure clarity and fluency Make it a manageable length (approximately 300 words is a good target)

8. Post it : Once you ’ re done writing and editing, post it on your blog or website

9 Share it : Drive traffic to your post by sharing it across all your social media profiles

10. Repeat : Do it all again for your next post and keep to a regular posting schedule

“What happens in Vegas stays in Vegas; what happens on Twitter stays on Google forever.” Jure Klepic, digital strategist

ialists, w t t C t et a Fi tem inancial S y u th suppor vide y e developed a un ne danc e the one-on-one t s ca s o to pro o c ou t nee s our g guidance eed , ommunication o b and reso u t e es ou a you w ur w o build your business you y.

o

[right management]

TRENDING

Get Ready for Gen Z

Born between 1990 and 1999, the next generation of workers wants to head into private offices (45%) and meet face -to -face with colleagues (74%) before calling it a day hopefully, not too late, since work-life balance is a primary career concern, according to recent surveys by Robert Half and Enactus Here are a few more facts about this rising generation of workers

1. Think Mad Men rather than Silicon Valley: 44% described midsize organizations as the ideal work environment; only 14% cited startups

2 Time for a 'reality-c hec k': 77% believe they ’ll need to work harder than past generations to have a satisfying professional life.

3 They might stay with promotions: Gen Zers expect to work for only four companies throughout their lifetimes, and 32% believe they will be managing employees in a corporate environment within the next five years

4. Forget fancy job titles: 64% ranked career growth among their top three career priorities; only 3% cited an impressive job title

2.3%

of all wage and sal ary workers earn minimum wage or less. [BLS]

5 Facts About Minimum Wage

Here are a few lesser-known facts about the highly debated minimum wage issue, courtesy of Pew Research Center

1 Minimum wage peaked in 1968 Adjusted for inflation, the federal minimum wage then equaled $8 54

2 Since it was last raised in 2009, federal minimum wage has lost about 8.1% of its purchasing power to inflation.

3 Three-million hourly workers earn minimum wage or less The Bureau of Labor Statistics (BLS) reports that 48 2% of these workers are aged 16-24 and 22 4% are aged 25-34

4 Twenty-nine states, plus the District of Columbia, have set their own higher minimums

5 About 20 6 million people (or 30% of all hourly, non-self-employed workers 18 and older) are “near-minimum-wage” workers.

US Competitiveness Ranks High

The United States ranked fourth among 93 countries in producing, retaining and attracting talent, according to the Global Talent Competitiveness Index For the second year in a row, Switzerland and Singapore took the top two spots, with Luxembourg and Canada rounding out the top five

Todd Shapiro Named Among the 100 Most Influential People in Accounting

AccountingToday’ s Top 100 Most Influential People recognizes the foremost thought leaders and visionaries shaping the accounting profession today In being named among them, ICPAS President & CEO Todd Shapiro joins an illustrious group, from KPMG Chairman and CEO Lynne Doughtie and FASB Chairman Russell Golden to AICPA President and CEO Barry Melancon and Financial Accounting Foundation President and CEO Terri Polley Read more at www accountingtoday com

75%

of employees say they’re “unengaged at work.”

TECH PULSE

$75,000 average annual earnings of twit ter’s 1billion registered users, aged 18-49. [Brillianttm]

How to Pick a New Technology

These five tips, courtesy of CPA com, will help to identify just the right areas of opportunity for your business:

1. Listen: Which services are clients asking for?

2 Structure: Is your team/business ready and able to support whichever services you plan to add?

3 Leverage: Choose the technologies that best align with your business needs, eliminate manual work and allow for client collaboration

4 Train: Become proficient in your new technology before unveiling it to clients and prospects

5 Promote: Use multiple marketing channels to inform clients and prospects about the new services you now plan to offer

5 Apps Entrepreneurs Love

1. Humin: Are you constantly networking and meeting new contacts? And are you constantly forgetting how and where you met these people? Enter the info into Humin, and it will remember all the tiny details for you

2 LIS TEN: This app automatically responds to incoming calls and texts with customizable voice and SMS responses when you ’ re too busy to answer them yourself LISTEN also syncs your auto replies with your meetings, can respond based on your location, and has a driving mode that notifies contacts when you ’ re on the road

3 Evernote: With its web and mobile app, you can create everything from digital notebooks for your expenses to a slideshow presentation And you can forget about filing and paperwork; Evernote allows you to tag your digital notes for easy searches later

4. Letterspace: Similar to Evernote, this free note -taking app allows you to organize your content with hashtags on an easy-to -use interface

5. Wor kf low: This time management app allows you to create any type of button for any type of activity you may perform on your phone on a regular basis With a simple click, your task is completed

Source: Entrepreneur Magazine

24%

of firms say they’re leveraging technology adequately to build the rel ationships they need. [Sageworks]

How Fit is Your Fitbit?

Good intentions aside, research firm Endeavor Partners suggests that about a third of owners of "smart wearables" ditch their devices within only six months of purchasing them.

An Anti-Procrastination Smart Button?

The Saent may look like nothing more than a $39 coaster-sized button with a fancy blue light, but it’s actually the world's first smart device designed to make you more productive When you hit the button, the Saent app locks you into productive apps and websites (based on a predefined list), while blocking out distractions (like social networking sites and app notifications) Try to switch to an unproductive app, and a friendly reminder pops up instead, recommending that you stay focused Over time, Saent learns your work patterns, associates productive apps with specific tasks and plans your break periods to keep your mind agile Learn more at saentproductivity com

CAREERS CONNECTIONS CREDIBILITY

Be Seen Here:

Happy Hour!

m to mingle with like-minded pros and share a casual drink. Located at the Illinois CPA Society offices in downtown Chicago, 550 W Jackson, Suite 900

Make the Diversity Difference

Through programs like the Mary T. Washington Wylie (MTWW) Scholar program, the Illinois CPA Society and Endowment Fund of Illinois are pioneering efforts to enhance diversity and inclusion throughout the accounting and finance profession

“On January 5, 2015, my life began to change personally and professionally as I gained a deeper insight into the various accounting career paths and established the direction I want to take my career,” writes Brandi Jackson, a MTWW Scholar and recipient of the Herman J Neal Accounting Scholarship “I credit the Mary T Washington Wylie Scholar program for this change.”

Visit www.icpas.org/diversity.htm to learn more about these life-changing programs, the people they impact, and ways in which you can get involved in diversity and inclusion programming and initiatives

Chris Lam, CPA Age: 32

Sr. Manager of Real Estate & Corporate Accounting

What’s the biggest perk of working for Hyatt? ”Free hotel rooms! After working there for one year, you get 12 free nights a year at participating hotels.” Why the move from public to private? ”Going from public to private was one of my defining career moments, after being in public for more than nine years I’d have to say that work-life balance is the biggest difference. In public, I felt like I always had to be connected in case a client needed something. Also, being in management, I was able to make my own schedule (for the most part) and choose where I would be on any given day, which I enjoyed. In private, I feel like I am able to “disconnect” more, meaning I can leave my work at the office and pick it up the next day ”

What do you owe your success to? “Hard work, a willingness to learn and ask questions, good teachers and mentors, and not being afraid to fail.” What excites you most about the future? “I love the fact that this world is always changing There are always new things to learn, new ways to do and improve work, and new people to work and connect with. I love being able to talk to people who have been in the industry longer than I have and those who are new to it Everyone, at every point in their career, has something to share.”

What single piece of advice would you give a young pro? “Work hard for what you want to achieve in life but make sure you prioritize what’s important to you Never lose sight of those things and make time for them. Life passes by too quickly and you don’t want to look back and have any regrets about not doing something, or doing too much of something that doesn’t have significant meaning to you

HYATT HOTELS CORPORATION

Find Your Happy Place

Four ways to unleash your natural talents and find happiness in life and business

By Derrick Lilly

For most of us, the pursuit of success starts with trying to right a weakness, brush up on an old skill, or dive into a development course for a chance to climb up the corporate ladder But how far will that take you? How happy will that make you? And what if there are better ways to succeed in life and business?

“ E v e r y o n e d e f i n e s s u c c e s s d i f f e r e n t l y, b u t w h e n y o u l o o k a t m o s t ‘ s u c c e s s f u l ’ p e o p l e , y o u ’ l l s e e t h a t t h e y f o u n d s o m e t h i n g t h e y ’ r e

November 13’s StrengthsFinder: Leverage Your Strengths For Success offers you the opportunity to complete Gallup’s groundbreaking StrengthsFinder assessment to discover your unique combination of strengths and how to use them as the basis of success Location: Illinois CPA Society offices in downtown Chicago. Time: 8-10 a.m. Price: $50. CPE: 2 hours. Visit www icpas org/YPclout htm for further details

g o o d a t , t h e i r w o r k d o e s n ’t f e e l l i k e w o r k because it’s a passion, they’re more fulfilled and less burned out, and they have more productive relationships,” explains Dr Todd Dewett, author of Show Your Ink: Stories About Leadership and Life, professional speaker and “recovering” management professor “People who can’t stand or barely tolerate their work take that home with them and it affects all areas of their life ”

In fact, Gallup research suggests that people w h o h a v e t h e o p p o r t u n i t y t o f o c u s o n t h e i r strengths every day are “six times more likely to be engaged in their jobs and more than three t i m e s a s l i k e l y t o r e p o r t h a v i n g a n e x c e l l e n t quality of life in general ” Don’t you want to be one of them?

“ I s y o u r c a r e e r c h o i c e g o i n g t o m a k e y o u h a p p y w h e n y o u ’ r e 5 0 , 6 0 , o r 7 0 ? ” a s k s D r Dewett “You need to ask yourself if you are in the position that is perfect for you If you’re not, congrats on recognizing this Don’t complain, don’t wallow, give yourself some time to back up your hunch, and then craft a very real plan ” Crafting that plan is the biggest challenge for most of us, so here’s how to get started

1. What do you really enjoy?

“What are you naturally drawn towards? Where do you gain attention and praise most effortlessly?” asks Dr Dewett “These may or may not be the same things, but they’re all indicators of what you’re likely to be really good at ”

F or mid-careerists, he recommends looking back on projects, tasks and accomplishments that gave you the most pleasure Which ones were most memorable? And what was it about the work that made it stand out? “These are the things you want to be developing skills for and positioning yourself to spend more time doing,” says Dr Dewett

For young professionals with limited experie n c e t o l o o k b a c k o n , s o m e h a n d y t o o l s include What Color is Your Parachute, a classic book that helps you identify possibilities and opportunities, says Dr. Dewett. He also encour-

ages young professionals to find a strengths assessment tool the most popular being Gallup’s StrengthsFinder

This tool is built around more than 40 years of Gallup research, with the intention of helping people discover and develop their natural talents StrengthsFinder identifies 34 of the most common talents, and provides in-depth analysis of the unique strengths you portray and how they play out in your life and career The tool also gives insight into ways to take action and align your job and goals with those talents. The outcome, says Gallup, is that you’ll “find yourself in a much more positive and productive environment ”

2. Leverage your strengths

This “comes much more effortlessly, and produces much more joy than trying to deal with weaknesses,” says Dr Dewett “Everyone has a handful of things that aren’t their forte The question is, as your career advances, which skill area or two not five or 10 are most likely to trip you up and stop you from being the world-class auditor or partner, or whatever it is that you’re working towards Develop those; your long-term plan must dictate the weaknesses you go after ”

“There can be a lot of growing pains with learning about yourself, and equally when teaching someone about something that they aren’t good at or lack confidence in,” adds Colleen Loeffler Phonwiang, CAE, director of Member Outreach with the Illinois CPA Society. “It’s much easier to enhance the strong skills. That’s why having a career that is a good fit for your talents makes you happier and proud of the product you create ”

3. Think chemistry as much as skill

We often hear about the “war for talent” and how every organization is competing for the best and brightest While that’s true, says Dr Dewett, there’s a lot more to it “The war, honestly, is for chemistry Everyone wants a team with good chemistry. But to get that, you have to leverage each person’s potential and strengths, appreciate how people relate to each other, and understand what each team member wants to do, not just what you need them to do,” he explains.

4. Give communication top priority

“What most people don’t do, particularly young professionals, is let their bosses know how they’re doing That’s one of the simplest steps to take in advancing your career. You have to let your boss know how you feel about the trajectory of your career, projects and responsibilities, and your fit in the organization,” Dr Dewett explains

“Talk to your employer about your challenges or concerns to see if any adjustments can be made,” says Loeffler Phonwiang “If you b e l i e v e y o u r t a l e n t s a r e b e i n g w a s t e d , y o u ’ r e n o t h e l p i n g t h e organization be successful. If you’re someone who they see value in, they’ll want to give you the tools and opportunities to succeed ”

At the end of the day, good team building is about respecting the uniqueness of the skills each person brings to the table. “If your organization doesn’t embrace a culture of developing its people, there are always other organizations that will appreciate what you offer,” Loeffler Phonwiang explains encouragingly “Invest in yourself and the skills that will get you to the job that is the best fit for you ”

“When we’re able to put most of our energy into developing our natural talents, extraordinary room for growth exists,” writes Tom Rath in StrengthsFinder 2 0 “So, a revision to the ‘you-can-be-anything-you-want-to-be’ maxim might be more accurate: You cannot be anything you want to be but you can be a lot more of who you already are ”

Are Business Retreats Worth It?

Six ways to make that team-building, solutions - driven field trip really, truly work

By Derrick Lilly

It ’s b o r i n g I t ’s a w a s t e o f t i m e I t c o s t s t o o m u c h I t ’s H e l l i n p a r a d i s e I t ’s y o u r f i r m ’s annual retreat, and nothing ever changes after it anyway

Often intended to be a serene getaway that builds bonds and turbocharges strategic thinki n g , r e t r e a t s c a n q u i c k l y t u r n i n t o s o m e t h i n g worse: Endless days of listening to high-priced m o t i v a t i o n a l s p e a k e r s f l i t t i n g f r o m o n e p l a t itude to another

It’s no wonder that retreats either have fallen by the wayside or are met with derision. But r e t r e a t s d o n ’t n e e d t o b e d r i v e n i n t o e x t i n ction they just need to be reinvigorated.

“A retreat is a time for going boldly where t h e p a r t n e r s h a v e n e v e r g o n e b e f o r e , ” s a y s Marc Rosenberg, CPA, a “Top 10 Most Recom-

m e n d e d C o n s u l t a n t ” a n d o n e o f A c c o u n t i n g

Today’s “Top 100 People ”

So here’s how to make your retreat worth the journey and the money

1 Go With a Goal

Do you need a succession plan? Are you introducing a new practice area? Does your board need restructuring? Is a merger in your future? Has the organization lost sight of its culture?

These are issues unlikely to be settled in an a f t e r n o o n m e e t i n g , b u t t h e y j u s t m i g h t b e retreat-worthy

“A retreat is not just another partner meeting; it’s an opportunity to ‘freeze time,’ step away from the office, the staff, the telephone, the emails and text messages, and focus on the firm, communication and brainstorming The whole

Give a little, gain a lot!

Serve on an Illinois CPA Society Appointed Committee or Task Force

Use your expertise and leadership skills to help guide and govern the work of your Illinois CPA Society.

Your service helps enhance the value of the CPA profession. In return, you will broaden your knowledge base, receive first-hand information on emerging issues, and develop powerful professional connections.

Illinois CPA Society regular and affiliate members are encouraged to apply for a position for the term April 1, 2016 - March 31, 2017.

Application Deadline is December 11, 2015.

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www.icpas.org/volunteer.htm

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Recognize Your Peers!

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

Lifetime Achievement Award

Presented to an individual who has provided distinguished service to the profession in Illinois and/or nationally. Deadline: 12/31

Outstanding Educator Award

Presented to an educator(s) at a community college, college or university who has made continuous and outstanding contributions to the education of accounting students. Deadline: 11/30

Lester H. McKeever, Jr. Outstanding Leadership in Advancing Diversity Award

Presented to an individual who is an exceptional leader committed to increasing diversity in the accounting profession. Typically has ten plus years of full-time work experience. Deadline: 11/30

Lester H. McKeever, Jr. Emerging Leader in Advancing Diversity Award

Presented to a young professional who possesses the qualities of the Outstanding Leadership in Advancing Diversity Award. Typically has four plus years of full-time work experience. Deadline: 11/30

Young Professionals Leadership Award

Presented to a young professional CPA who demonstrates leadership skills in their career, community service and through their involvement with the Illinois CPA Society and/or other professional organization(s). Deadline: 11/20 For specific award criteria and nominating instructions, visit www.icpas.org/awards.htm

point is to address highly critical and sensitive issues, and discover the feelings and opinions of the other partners,” says Rosenberg. “Partners should walk away from retreats as smarter people ”

Rita Keller, a nationally renowned CPA firm management consultant, speaker and author, also suggests heading into a retreat with a firm agenda “Not every topic has to be heavy, but there needs to be a clear goal,” she says “Provide an agenda to all participants a week before the retreat I also like to send along some ‘recommended reading’ relating to the issues at hand to get the creative juices flowing.”

2. Open the Floor

Everyone in attendance whether the retreat is limited to partners or includes experienced staff needs to have the opportunity to feed the discussion “Every participant must feel free to be brutally candid,” says Rosenberg “Everyone attending the retreat should enter the meeting with the mindset that it will be a game changer.”

“Everyone has to weigh-in on the discussion,” adds Keller “There’s often hesitation to speak up because of possible confrontation, but I strongly stress that it’s your duty to say what is on your mind during the retreat and not in the hallway afterwards, or in your office with a favorite peer.”

3. Champion Change

A major complaint about retreats is that a lot of time and money is spent coming up with these great ideas and solutions, and then nothing happens afterwards “So why bother?” asks Keller “One partner jokingly told me, ‘We are going to video our retreat t h i s y e a r a n d t h e n d i s t r i b u t e t h e v i d e o e v e r y y e a r f o r t h e n e x t f i v e y e a r s . We ’ l l save a lot of money because we talk about the same issues every time.’ While this was a joke, it rang loud and true ”

“If nothing ever happens, it’s your own fault It’s up to you to decide if you simply spend $80,000 on a retreat, or if you make a million because of the ideas that came out of it,” says Rosenberg. “There needs to be accountability there needs to be consequences Every discussion needs to conc l u d e w i t h a c t i o n s t e p s : W h a t a r e w e going to do? When are we going to do it? Who is going to do it?

“Someone has to be willing to commit to championing a plan and monitoring its progress,” he continues. “A firm can have t h e b e s t r e t r e a t i n t h e w o r l d , b u t u n l e s s

there’s a decent level of partner accountab i l i t y, u n l e s s t h e r e t r e a t i s f a c i l i t a t e d b y s o m e o n e w h o c a n m a k e i t s u c c e s s f u l , implementation of retreat ideas is doomed before the meeting begins.”

4. Set the Stage

Poor use of time and place is another factor that can quickly doom a retreat Many experts recommend making your business retreat an overnight event to get the most bang for your buck. After all, if everyone’s s t a r i n g a t t h e i r w a t c h e s , c o u n t i n g d o w n the hours until they can race home, how productive will they really be? Arguably, o v e r n i g h t r e t r e a t s a l l o w p e o p l e t o r e l a x and “let their hair down,” as Keller puts it

That doesn’t mean the retreat has to be an all-out-all-expenses-paid vacation for the group. “It’s a myth that your retreat has to be out of town,” says Rosenberg. “A local hotel and conference room away from the office can serve your needs just fine ”

T h e p o i n t r e a l l y i s t o l e a v e t h e o f f i c e behind, eliminating daily work distractions a n d h e l p i n g t o s e t t h e s t a g e f o r w o r k i n g towards important, common goals

5 Come Together

All work and no play isn’t necessarily the answer either If you can afford it, building an element of fun into the retreat can help to build enthusiasm among participants and encourage team members to get to know one another better and trust each other

One suggestion is to share all of your meals together. “I have found that casual cocktail hours and dinners actually lead t o d i s c u s s i o n s o n m a n y o f t h e m e e t i n g topics in a more comfortable setting and often result in some really creative ideas,” says Keller

A n o t h e r s u g g e s t i o n i s t o u n d e r t a k e a n a c t i v i t y o r t w o . Te a m - b u i l d i n g i n i t i a t i v e s span the spectrum from bizarre to extreme, but whether it’s a scavenger hunt or golf or mountain climbing, choose an activity that suits your team The point is to laugh, challenge each other and have an experience together that you’ll talk about later

“Some firms choose to go to really nice r e s o r t s a n d b u i l d i n p l e n t y o f f r e e t i m e , and they make it a leisurely weekend as well as a business meeting. Whatever you do, just be careful not to go overboard or schedule meetings too close to activities t h a t w i l l h a v e p a r t i c i p a n t s d i s t r a c t e d , ” says Rosenberg

6. Do it Again

“The best firms have retreats every year, and they come away with an action plan,” says Keller Whether or not every retreat is a success, you should plan on doing them annually, taking note of what didn’t work, and gradually working out the kinks

“Remember, success is not having a good time, it’s implementing retreat ideas. Conclude your retreat with a list of high-impact action items Assign your to-do lists Monitor progress and establish accountability,” Rosenberg advises. “But, most importantly, remember to make your retreat an impact event ”

How to Spot a Liar

Fraud? Deception? Flat-out lying? Here’s how to know when you ’ re being duped.

By Selena Chavis

From little white lies to all-out fraud, organizations of all sizes and across all industries can fall victim to deceit. And research suggests that the financial impact is significant.

According to the 2014 Report to the Nations on Occupational Fraud and Abuse published by the Association of Certified Fraud Examiners (ACFE), the typical organization loses 5 percent of revenues annually to fraud translating to a potential global fraud loss of $3 7 trillion

T h e f a c t i s , n o b u s i n e s s i s i m m u n e t o t h e f a l l o u t o f deceit, says Andi McNeal, CFE, CPA, director of research with the ACFE. “Any organization that employs individua l s i s a t r i s k o f b e i n g d e f r a u d e d o r d e c e i v e d b y o n e o r m o r e o f t h o s e e m p l o y e e s , ” s h e s a y s m a t t e r- o f - f a c t l y “However, our findings show that organizations that are proactive in preventing and detecting employee fraud and m i s c o n d u c t c a t c h i n c i d e n t s s o o n e r a n d s u f f e r s m a l l e r related losses than organizations that take a purely reactive approach to these inevitabilities.”

Proactive strategies, though, require an understanding of the psychology of deceit In other words, what are the tells?

A l a n H i r s c h , M D , a C h i c a g o - b a s e d p s y c h i a t r i s t a n d neurologist, says that anyone equipped with a basic psychology toolset can recognize some of the tell-tale signs Through research published in The Journal of the American Academy of Psychiatry and the Law, Hirsch and his colleague Charles Wolf, M.D. were able to identify 23 verbal and nonverbal clues as discriminators for truthfulness. For the sake of simplicity, he suggests focusing on these seven.

5 Tips for Fraud Fighters

The Association of Certified Fraud Examiners suggests these basic steps to lessen your risk of fraud

1. Be Proactive. Adopt a code of ethics for management and employees. Evaluate internal controls for effectiveness and identify those areas that are most vulnerable

2 Cement Hiring Procedures When hiring staff, conduct thorough background checks, including educational, judicial, credit and employment histories, as well as references

3. Train Staff in Fraud Prevention. Ensure employees are familiar with basic detection methods and are able to recognize the most common red flags.

4 Start a Fraud Hotline Fraud is still most likely to be identified via a tip Providing an anonymous reporting system for your employees, contractors and clients will help to uncover deceit

5 Make Detection a Corporate Priority Communicate anti-fraud policies regularly with staff, as well as ways to report suspicions of misconduct and the potential consequences of committing fraud (termination, prosecution, etc )

1 Touching the Nose/Face Termed the “Pinocchio Effect,” research suggests that increased blood pressure and blood flow result when a person lies, causing the nose to expand The result is an itching sensation

2 Would Not & Could Not Liars tend to emphasize the word “not” and use an expanded form of the negative more frequently, says Hirsch “Look for excessive use of words like ‘would not’ or ‘could not’,” he suggests.

3. Errors in Speech Unnatural pauses and an increased number of grammatical errors such as using the wrong tense or pronoun are more common when a person is lying Often, Hirsch notes, liars will try to fill in periods of hesitation with sounds such as “uh,” “er” and “um,” or may become tongue-tied or begin stammering or stuttering.

4. Leaning In Leaning forwards, resting elbows on a table and general restlessness may be an indicator of dishonesty, says Hirsch

5. Dry Mouth Increased drinking or swallowing along with frequent clearing of the throat are potential indicators that a person is lying

6. Catchphrases Frequent use of phrases such as “to tell the truth” or “to be honest” before completing a thought may be a red flag that someone actually is not telling the truth or being honest Also, denying being guilty of lying by stressing one’s truthfulness with statements such as, “I have absolutely no reason to lie” may be red flags.

7. Eye Movement People who lie tend to look away from you more often to the side or down Also, a deceptive person tends to blink less frequently, says Hirsch

He cautions against jumping off the deep end with your conclusions based solely on a s t u t t e r o r t w i t c h y n o s e , h o w e v e r “ A n x i e t y c a n g i v e t h e a p p e a r a n c e o f l y i n g , ” h e explains, pointing out that stress alone can increase errors in speech and mid-sentence changes “Just by being nervous or fearful, you can demonstrate many of the characteristics of lying,” he warns

Beyond learning about verbal and nonverbal red flags, McNeal suggests that the most effective technique to detect and deflect deceivers is to involve employees throughout the organization in helping to uncover fraud and misconduct

“Our research has consistently shown that tips are by far the most common way that deceit is detected,” she says “So encouraging and supporting employees in coming forward with suspicions of fraudulent or deceitful behavior is essential to effectively spotting these problems.”

To encourage this openness, McNeal recommends implementing reporting mechanisms such as hotlines and making them known and available to staff, vendors, customers and the public. Building on Hirsch’s tips, she also recommends that managers throughout the organization receive training specifically on the behavioral red flags commonly displayed by individuals engaging in deceit and fraud

“They should also be instructed that watching for these warning signs is part of their managerial responsibilities, with the important caveat that they should focus on patterns and changes in these behaviors, not isolated incidents,” she says, adding that just as there’s no single body movement that definitively indicates someone is lying, there’s no single behavior that definitively indicates fraud “However, knowing the most likely physical displays of stress and the most common behavioral warning signs of fraud can help management identify areas and individuals that merit increased monitoring.”

Adding another layer, motivation is critical to understanding the penchant for deception Not surprisingly, the biggest deterrent for many fraudsters is fear of getting caught and its consequences. “It is the belief that they can get away with it that leads them to cross the line and keep going,” McNeal explains “Consequently, raising the perception that such behavior will be detected is one of the best ways to prevent fraud and deceit among employees.”

It then follows that in order to strategically address risks of fraud and misconduct, companies need to make it known that management is proactively watching for deceit, and that such behavior will be prosecuted Hand in hand with this, says McNeal, emphasize a culture where honest and ethical behavior is not only the priority, but also rewarded.

“When employees know that management includes honesty and ethics as core business values, they are less likely to deceive or defraud,” she comments

Make Yourself Clout Worthy

Seven questions to ask on your way to becoming the influencer of tomorrow.

By Kim Simios

OK, so “influence” might not be the first word that springs to mind when you think of accountants. But it should be

As accountants, delving deep into our spheres of influence may not come naturally; many of us are analytically wired and would rather have a spreadsheet in front of us that we can routinely check off and feel good about. For me, thinking about influence can be a little uncomfortable I have to build time into my schedule to think about things differently relationally

Last year, I took on a new leadership role as managing partner of Ernst & Young LLP’s Chicago office, which includes helping to guide the career p

out offering anything new And, as a result, their insights are often overlooked Contrast that with someone who goes out of her way to ask people how things are going and if they need help, or someone who performs random acts of service for team members when least expected Which person do you want on your team? Which person are you?

Your appearance also influences how people perceive you The “guys in ties” theory once made it easy for men to dress for success; at least they always looked like they knew what they were doing! Today, that’s not always the case, as suits and ties largely have fallen by the wayside And for women, who often are more closely scrutinized, clothing choices add another layer of complexity I went shopping for an interview outfit with my college-age daughter recently; she was quick to call me too conservative, saying, “Well, your generation is different ” I nodded in agreement, but reminded her that it’s still people like me who hire people like her, so it might not be a bad idea to take my advice

the impact of a leader ’s sphere of influence how it drives behavior, shapes team performance and defines others’ perceptions. In order to be impactful, I consistently challenge our young professionals (and myself) to ask these seven questions

1 What impression do I make?

Influence starts with being self-aware We’re not born with self-awareness; it evolves over time, so consistent re-evaluation is important. I can’t remember where I heard this quote, but it resonates so perfectly with this topic: “In every encounter we either give life or we drain it; there is no neutral exchange.”

To build self-awareness, I encourage others to ask what kind of interaction they want to create What impression do they want to make? What kind of personal brand is their interaction cultivating? How are they perceived by others based on these interactions?

We’ve all worked with people who exude negativity. They complain and complain, and always know why something is a bad idea, with-

2

Whose perspective do I need?

Our ability to influence also hinges on our understanding of others’ perspectives For me, I have my to-do list I know what needs to get done, and I sometimes assume that others on my team share the same goals I realized early on as a leader that this was a huge error in judgment. I also thought that my team members knew when they were doing great work, even if I didn’t bother to tell them. To have positive influence and outcomes, you have to consider other people’s perspectives and how they define success Have you ever had someone working on your team who has impressive technical skills, but wastes so much time and energy with office politics and jockeying for position that he lacks focus, meaning his work quality suffers? In this scenario, rather than telling this team member what he’s doing wrong, I reframe the conversation into something more constructive which requires me to understand his perspective and what motivates him (a promotion opportunity, for example)

Kim Simios

Managing Partner

Ernst & Young LLP, Chicago Office

This article is based on Kim’s presentation at the 2015 ICPAS Young Professionals Leadership Conference Get event details at www icpas org/yp htm

3. What questions am I afraid to ask?

Influence doesn’t mean having the right answers, but rather asking the right questions One of my favorite ways to approach challenging situations is with one simple statement: “Help me understand ” It’s not offense or defense; it helps to keep the conversation neutral and can drill down into a variety of issues.

Many of EY’s best initiatives have been inspired by people who had a need and were bold enough to ask probing questions to get the conversation started I’ll give you an example from my own experience When I had my second daughter, trying to balance my expanded family with my increasing work responsibilities at EY became so overwhelming that I decided to quit to be a stay-at-home mom A few years into my hiatus, I asked EY whether there was a way to structure a client load that was less than full time, and put together some ideas of how that might work Our local leader at the time agreed to try my proposal, and I came back on a reduced schedule. My arrangement, combined with those of a few others, helped to create flexible options for all our people.

A more recent example involves a couple of EY managers who recognized that they needed more education and networking opportunities across our multiple service lines They got input from colleagues and leaders, and put together a proposal to launch a networking event that included input from service line leaders and facilitated networking for their peers. The event launched this summer.

4. Who’s influencing me?

I can personally attest to the fact that being on the receiving end of influence can change your career trajectory Great influencers give and get feedback on a regular basis and are highly aware that leadership skills are honed over time. One of my favorite leaders, Bill Hybels, always says, “Everyone wins when a leader gets better.”

When I first made partner, one of our leaders thought it would be a good idea for me to shadow one of our senior partners on a challenging new account The words “intimidated” and “terrified” best describe my feelings about being a tagalong I didn’t know this guy at all, except that I thought he was way out of my league

My impression was that he had a massive book of business and could get people promoted or dash someone’s career in the blink of an eye. Of course, my preconceived notions were false; in reality, he had great relationships, was a strong mentor and took time to give me feedback regularly, much of which was on point, and some of which we amicably debated He had a counterpoint for every point I made, which was frustrating until, that is, I realized his motive was to inspire contemplation and solidify my position

His willingness to mentor me, be a core sponsor, and give candid and honest feedback had a meaningful and far-reaching influence.

5. What kind of energy am I putting out?

One of the most valuable things you can give your colleagues is your energy even more so than your time Energy is empowering; it makes people want to do better.

I once worked with a leader who spent an extraordinary amount of time telling people what they would achieve and who they would become “I have no doubt that you’re going to knock that project out of the park,” he would say “You will make a great partner someday You’re presenting this to the client, and I know you will articulate the position just perfectly because you just did for all of us here.”

Everyone wanted to work with this guy, because he brought so much positive, constructive, affirming energy into the process As a result, he was able to turn ordinary people into top performers

There’s no question that there are times when we need to work hard, and it’s easy to feel drained, but we can’t forget how energy impacts performance For me, understanding my energy and how it impacts others is something I have to be intentional about, because one’s energy is contagious. Negative energy can bring down a room immediately Positive energy can exhilarate and inspire it

6. Which relationships do I need to expand?

Arguably, developing influence within public accounting depends on your ability to build relationships. People want to be known. They can’t be fulfilled in their jobs if they’re not known, and your chances of being a key influencer plummet if you don’t take time to strengthen relationships

I’ve seen our younger team members become so consumed with getting the work done that they forget to build relationships with client personnel. Their intention is to be efficient and not waste anyone’s time, not realizing that building the relationship will help the work go much more smoothly With some coaching, these new managers change their approach, instead focusing on connecting with teammates and getting to know them on a personal level first When they do, their engagement increases, they become more influential and their team’s performance improves.

When it is time to transition out of your practice you want to do it right. We are the largest facilitator in North America for selling accounting and tax practices. We provide a free estimate of your firm’s value, market extensively, assist in negotiations and find you the right situation.

Contact us today so your last decision will be your best.

7. What kind of ‘ripples’ am I making?

Influence isn’t static It has a ripple effect whether or not we realize it Whether it’s becoming more self-aware or building better relationships, your sphere of influence definitely becomes more valuable if you work on it.

The Holmes Group Trent Holmes

Toll Free: 800.397.0249

AccountingPracticeSales.com

trent@accountingpracticesales.com

I’ve become very self-aware as a leader, but it’s easy to lose sight of my sphere of influence and the impact I have on others I can either create ripples that are crashing waves, resulting in turmoil with the people I come into contact with, or I can be a positive influence that undulates across the organization from person to person in a constructive, inspiring and motivating way.

YOUR LAST DECISION IS THE BIGGEST.

Exit Here

Is filing bankruptcy an out for wrongdoers with penalties to pay?

By Brian J. Hunt, J.D.

Filing for bankruptcy typically results in a bankruptcy discharge, which relieves debt obligations The Bankruptcy Code, however, stipulates that not all types of debt are dischargeable particularly when it comes to the presence of fraud

The case of Catrambone v Adams, 498 B R

Section 523(a)(4) and Section 523(a)(6)

Under Section 523(a)(4), debts resulting from fraud or defalcation (the misappropriation of money or funds) while acting in a fiduciary

capacity are non-dischargeable Section 523(a)(6) establishes an exception for willful and malicious injury by the debtor

In Catrambone, Richard Catrambone and Thomas Adams were equal partners in Great Lakes Building Materials, a materials distribution company At prior proceedings, Adams testified that Catrambone retained sole access to the company computer, meaning that he wasn’t able to access even basic information about dayto-day business activities, much less financial records about the company. Catrambone also owned or controlled several other companies, including RDM Distribution, through which he improperly overcharged Great Lakes for wallboard, without Adams’ disclosure or approval What’s more, through other entities that he controlled, Catrambone diverted additional profits belonging to Great Lakes and Adams Then, in September 2002, he terminated Adams as a Great Lakes shareholder, officer and employee.

Adams ultimately brought suit against Catrambone and Great Lakes, alleging a violation of the Illinois Wage Payment and Collection Act, breach of fiduciary duty, and tortious interference with prospective economic advantage Adams further alleged that his damages were caused by insider trading, diversion of money and profit, and wrongful termination

A fiduciary duty is an obligation to act in the best interest of another party In general, a fiduciary relationship occurs whenever the princip a l p l a c e s a s p e c i a l t r u s t a n d c o n f i d e n c e i n , and relies upon, the fiduciary. The defining feature of a fiduciary relationship is a difference in knowledge or power, which gives the fiduciary a position of ascendency or control over the other party

Ultimately, a jury found in favor of Adams, and determined that punitive damages were

appropriate since Catrambone’s misconduct was willful and wanton A bench trial later held on the issue of damages, with Adams being awarded more than $575K

Catrambone responded by filing a voluntary petition seeking relief of his debts under Chapter 7 of the Bankruptcy Code. Adams filed an adversary complaint, alleging that the judgment against Catrambone was non-dischargeable under Sections 523(a)(2)(A), (a)(4) and (a)(6) of the Code. The bankruptcy court ultimately held t h a t A d a m s h a d p r o p e r l y e s t a b l i s h e d a n e x c e p t i o n , a n d t h a t Catrambone could not discharge the judgment he owed

In affirming the bankruptcy court’s judgment, the District Court began by discussing whether Section 523(a)(4) was applicable in this case. More specifically, the Court focused on whether there was sufficient evidence at trial and at the bankruptcy proceeding to establish that Catrambone owed Adams a fiduciary duty, and that Catrambone acted with the requisite state of mind for defalcation.

Turning to the fiduciary relationship, the Court concluded that Adams had indeed proved that Catrambone had superior knowledge or power, which gave him a position of ascendancy The Court noted that the ascendancy test looks to economic realities rather than labels, which means that even though Catrambone and Adams each held a 50 percent interest in Great Lakes, they were not equals with respect to their knowledge and control of the business The Court reasoned that this inequality placed Catrambone in a position of ascendancy and imposed a fiduciary obligation to Adams.

The Court also concluded that Catrambone acted with the requisite state of mind for defalcation, explaining that the debtor, as a fiduciary, performed with knowledge of, or gross recklessness with respect to, the improper nature of his behavior. The Court went on to state that defalcation, like fraud, requires a deliberate and intentional wrong Being instructed that willful and wanton conduct is “a course of action which shows actual or deliberate intention to harm,” the Court reasoned that the jury’s punitive damages finding was sufficient

Next, the Court discussed the applicability of Section 532(a)(6) i n t h i s c a s e , n o t i n g t h a t t h i s e x c e p t i o n r e q u i r e s a d e l i b e r a t e o r intentional injury, not merely a deliberate or intentional act that leads to the injury The Court further explained that a willful and m a l i c i o u s i n j u r y i s o n e t h a t t h e i n j u r e r d e s i r e d t o i n f l i c t w h i l e knowing he didn’t have a legal justification for his actions It concluded that the jury’s finding that Catrambone’s actions were willful and wanton plainly satisfied the requirements under this discharge exception

While filing for bankruptcy can help a debtor reduce his debts, it’s important to note the exceptions. As we see in Catrambone, if a debt occurred because of a debtor ’s wrongdoing, he can’t simp l y f i l e f o r b a n k r u p t c y t o e r a s e t h e d e b t C o u r t s h a v e a s t r o n g interest in holding debtors responsible for their wrongful actions, and are unwilling to reward bad actors who come to court with unclean hands

Brian J Hunt is the managing principal of The Hunt Law Group, L L C i n C h i c a g o H e h a s b e e n ch o s e n a s o n e o f C h i c a g o ’s To p Lawyers and as one of Illinois’ Top Rated Lawyers His practice focuses on business litigation and the defense of corporations and individuals in the areas of construction, premises, transportation, p r o d u c t a n d p r o f e s s i o n a l l i a b i l i t y B r i a n c a n b e r e a ch e d a t bhunt@hunt-lawgroup com or 312 384 2301

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How to Become Illinois’

BEST PL ACE TO WORK

Companies that respect, challenge and value employees earn the highest marks for staff engagement, satisfaction and loyalty. Here’s how to be one of them.

By Clare Fitzgerald

Ping-Pong tournaments and happy hours are nice, but fun is only one piece of the puzzle when it comes to landing yourself on one of those avidly read and muchtouted “best places to work” lists.

So just what does it take? Competitive compensation and comprehensive benefits are top-of-mind, but for the companies that landed on this year ’s list of ”Best Places to Work in Illinois” [www.bestplacestoworkil.com], offering a supportive environment that encourages friendships and professional growth is the real driver.

Before you chalk this up as a gimmicky pay-to-play marketing tactic, know that the “Best Places to Work in Illinois” list is promoted by The Daily Herald Business

major chunk of a company’s ranking.

According to Susan Springer, director of workplace assessments at Best Companies Group, the organization responsible for identifying and recognizing the nation’s best employers, the award, now in its 10th year in Illinois, is based on a two-part assessment an employer-completed questionnaire and an employee engagement and satisfaction survey The employee survey, which drives 75 percent of the assessment, focuses on how employees feel about eight key areas specifically, leadership and planning; corporate culture and communications; role satisfaction; work environment; relationship with supervisor; training, development and resources; pay and benefits; and overall engagement

“We assess things like privacy and office environment, whether employees feel like there is room for growth and advancement, how satisfied they are with their work and whether they feel like they are taken care of and supported personally,” says Springer The assessments ask targeted questions about each participant’s level of engagement (“Are you proud to work for your company?” “Would you recommend your company’s products and services to friends and family?” “Do you plan to stay at the company for the next two years?” for example). The survey also asks open-ended questions, such as what improvements employees would suggest Springer has seen a number of key trends emerge among the companies making the grade, most notable of which is greater schedule flexibility. “Companies are allowing telecommuting and flexible work weeks, and they’re creating environments that are much more employee friendly ” She further explains that the key

Several accounting firms landed on this year ’s Best Places to Work in Illinois list, including Weiss & Company LLP in Glenview (#2 in small companies), Warady & Davis LLP in Deerfield (#15 in s m a l l c o m p a n i e s ) a n d C r o w e H o r w a t h L L P i n C h i c a g o ( # 1 0 i n large companies) Touting employee engagement scores of 92 percent compared to the national average of just 41 percent, it’s safe to say these firms are doing a lot right Here are five things driving their success

ONE : Collaborative Relationships

At Crowe Horwath, Warady & Davis and Weiss & Company, fostering a friendly, inclusive atmosphere goes a long way towards building strong, committed teams

“We have a very close-knit, friendly culture,” says Leslie Flinn, director of marketing and recruiting at Warady & Davis “We have an outstanding team of people who develop friendships in and out of the office Those friendships contribute to creating an exceptional, cohesive team of people who are passionate about what they do and are committed to each other If you get a flat tire in our parking lot, you’ll have five people trying to help you.”

At Weiss & Company, which has earned a spot on the list for f o u r c o n s e c u t i v e y e a r s , e a c h n e w h i r e b e c o m e s p a r t o f a n extended family, says Kristen Dallman, the firm’s director of mar-

“Accounting and finance professionals tend to try to quantify everything, but keeping employees motivated and happy is qualitative and it ’ s more art than science.”

keting “We have a very welcoming environment where people genuinely enjoy working together,” she explains, noting that part of the firm’s hiring process includes screening for people who will fit into that familial culture

Of course, a little extracurricular fun goes a long way for Illinois’ best employers “We provide a lot of opportunities to interact outs i d e o f w o r k h o u r s , ” s a y s D a l l m a n , h i g h l i g h t i n g c o n c e r t s a t R a v i n i a , p o s t - t a x s e a s o n e v e n t s a n d p a r k i n g l o t b a r b e c u e s a s examples of events that help to bring the team together

For Warady & Davis, volunteer activities, like the Illinois CPA Society’s CPA Day of Service and its one-on-one mentoring program, help to forge strong bonds between employees “Ninetyn i n e p e rc e n t o f t h e t i m e o u r m e n t o r s a r e a s s i g n e d o n l y o n e mentee, so they can really focus on that person instead of juggling several people’s needs,” says Jo Ann Porter, CPA, partner and managing director of human capital at Warady & Davis

TWO : Trust and Transparency

Accounting and finance professionals tend to try to quantify everything, but as Stuart Miller, managing partner of Crowe Horwath’s Chicago and Oak Brook offices, points out, keeping employees motivated and happy is qualitative and it’s more art than science

Caring about and being truthful with employees plays a huge role. “So often, for employees to be happy, it boils down to them being able to trust the organization You have to care about your people and do the right thing for your clients and employees,” says Miller “We try to be as transparent as possible, and we make sure our employees aren’t mistreated. In fact, we’ll walk away from clients if they don’t treat our people professionally. We strive to make sure our clients win and our employees win If we do that, the firm wins

“With young people, the more transparency you can build, the better,” he adds, explaining that Crowe Horwath prides itself on the accessibility of its partners. “We let staff know that we’re open to taking time to talk about whatever the issue or question of the day is Millennials like to talk through problems and find solutions ”

S i m i l a r l y a t We i s s & C o m p a n y, p a r t n e r o f f i c e s a r e s i t u a t e d around the perimeter of the workspace, and staff is encouraged to stop in to chat or ask questions. “Everyone gets exposure to the partners and everyone’s door is open,” says Dallman

THREE : Flexibility

Quality of life has been a hot topic for some time now, so it comes a s n o s u r p r i s e t h a t t h e c o m p a n i e s e a r n i n g h i g h m a r k s a m o n g employees are those committed to flexible scheduling and outside-the-box work arrangements

“Work-life balance is always a challenge for accounting firms, but we do try to focus on it,” says Flinn.

Warady & Davis offers flextime and telecommuting options, as well as generous paid time-off year round, especially in the summer “Our professionals understand expectations and know what t h e y n e e d t o g e t d o n e , ” s a y s P o r t e r. “ A s l o n g a s t h e t e a m c a n work efficiently and meet goals and deadlines, no one is watching the clock ”

FOUR: Growth Opportunities

If you want motivated, engaged employees, they have to know that there’s something “more” to be working towards A clear path for growth gives them that.

Weiss & Company, for example, uses a core competency metric system to outline responsibilities and show associates how they can advance “We don’t want the path to the next lane to be some sort of mythical secret We make it very clear how to go above and beyond and how to get to the next level,” says Dallman.

Similarly, Crowe Horwath strives for constructive feedback to drive performance “We have really honest conversations about what people are doing well, what they can work on and what it’s going to take to advance,” explains Miller In other words, employees are encouraged to take ownership of their work. The firm prom o t e s a n e n t r e p r e n e u r i a l m i n d s e t a n d a l l o w s s t a f f m e m b e r s t o explore areas that interest them outside of their strict roles Ultimately, the firm challenges its employees to create value.

“Too many times in public accounting we put people in a box At Crowe, we allow people to look at what they can or want to do next We want people to find what they are really good at and grow them in that, even if that means moving to a different practice area or pursuing an area other than where they started,” Miller explains “We want our people to be challenged to create products a n d s e r v i c e s t h a t e n g a g e p e o p l e ’s m i n d s ; w e w a n t t o d e v e l o p builders and engage people beyond the monotony ”

What really makes “best companies” stand out, though, is their investment in their people. At Warady & Davis, for example, an intensive internship program grooms college accounting students f o r f u l l - t i m e s u c c e s s a f t e r g r a d u a t i o n . T h e f i r m ’s p r o f e s s i o n a l development curriculum, “W&D University,” starts at intern year one and goes all the way through partner

“We start investing in our staff from day one with the goal of developing and promoting from within This allows people to see the great opportunities they have here at the firm,” says Porter “We’d much rather promote from within than hire laterally from another firm ”

FIVE : Staff Appreciation

Companies that stand out as top employers make sure their staffs know their efforts are appreciated “A lot comes down to respect and knowing that they are valued,” says Flinn, who explains that employee appreciation is a big reason Warady & Davis has an extremely loyal staff, including a large percentage of people who have spent their entire careers with the firm.

“Feeling valued comes naturally when companies acknowledge contributions, treat staff like family, develop and reward people with higher profile work, and encourage camaraderie,” says Springer “Championing that type of culture pays off Every time you lose an employee it affects the bottom line in terms of lost productivity and the time it takes to recruit, rehire and retrain Increasing engagement increases loyalty It’s not just about keeping people happy, it’s about keeping happy people.”

So will your company be one of Illinois’ best places to work in 2016?

t ec h innovat or s ILLINOIS’

Once predominantly rooted within agriculture and manufacturing, the Illinois economy is experiencing a bit of a shift these days thanks to an influx of tech sector R&D

A c c o r d i n g t o t h e B u r e a u o f L a b o r S t a t i s t i c s , i n 2 0 1 3 approximately 5 28 percent of Illinois’ private businesses resided in the high-tech space above the national average of 4 47 percent, and more than double the 2 46 percent attributed to the high-tech sector in 1990

With new businesses come new jobs And according to an Illinois Science and Technology Coalition report released in 2014, over the past decade Illinois’ economy has generated more than 16,000 new jobs for Web developers, programmers and other computer-related occupations This is certainly contributing to the state’s less daunting unemployment rate, which hit a low of 5 8 percent in July 2015 its lowest since August 2008.

Much of this growth would not be possible without the existence of technology and innovation incubators comp a n i e s t h a t h e l p n e w b u s i n e s s e s g e t t h e i r s t a r t t h r o u g h shared workspaces, knowledge sharing and even funding. By reducing overhead costs and providing structured mentorship, these incubators can significantly reduce the risks associated with launching a new enterprise According to the National Business Incubation Association, as of October 2012, there were more than 1,250 incubators in the United States, up from only 12 in 1980 and more than a third of these cater to technology firms

Catapult, a Chicago-based cross between an incubator and a co-working space, is one example of an organization that’s supporting and boosting the efforts of tech startups There are a variety of incubator program models, but Catapult distinguishes itself as a nonprofit focused on companies that already have demonstrated some business traction (usually having an existing staff of three to five employees, an existing though early product, and a little bit of capital raised) Catapult doesn’t take equity or provide funding in the businesses it incubates; rather, its singular objective is to accelerate growth by providing educational programming, mentoring and access to a strong community of like-minded entrepreneurs The Catapult community is peer-selected, so founders of existing resident companies refer in and vote on new companies invited to join

“ P e e r s e l e c t i o n a n d b u s i n e s s t r a c t i o n a r e h u g e , t h e premise being that from the most serious founders, those in the trenches know best who they want to work with side by side,” says Galen Mason, Catapult co-founder and an attorney with Foley & Lardner

Mason explains that when done right, incubators provide entrepreneurs with not only ready access to the support necessary to drive the startup phase, but also the foundation for continuous g r o w t h “ T h u s , i n c u b a t o r s i n c r e a s e b o t h t h e o d d s o f s o m e o n e starting a new enterprise and their subsequent success,” he says. Similarly, incubators also help entrepreneurs recognize poor ideas faster, which saves time and money in the long run

To date, Catapult has seen 31 companies pass through its doors 18 alumni and 13 current residents These companies have raised nearly $60M in funding and hired almost 400 employees.

Mason argues that small businesses create more jobs than established corporations tend to do And, in fact, the Small Business Association reports that small businesses create seven out of every 10 new jobs, and have generated 64 percent of net new jobs over t h e p a s t 1 5 y e a r s . F o c u s i n g s p e c i f i c a l l y o n i n c u b a t o r s , a s t u d y commissioned by the US Economic Development Administration in 2008 reveals that for every $10,000 investment, business incubators created between 46 and 69 jobs

A s r e c e n t l y a s O c t o b e r 2 0 1 4 , f o r m e r G o v e r n o r P a t Q u i n n announced a $1M investment in business incubator Chicago Innovation Exchange as part of the Illinois Jobs Now! program. These funds added to the University of Chicago’s $5 4M investment in the enterprise “Our technology and innovation sectors are helping us grow and create new businesses and jobs across Illinois,” said Governor Quinn in a press release. “This investment will pay dividends for our state by giving students, faculty and local community entrepreneurs the opportunity to grow in Illinois ”

Chicago Innovation Exchange is part of a larger strategy to position the State of Illinois, the City of Chicago and the South Side as global destinations for discovery, innovation and entrepreneurial activity. These companies will address local and global issues in the areas of life sciences, water conservation, energy storage, highpowered computing, and more Once completed, Chicago Innovation Exchange’s campus will have room for 300 innovators to work on their ventures on a daily basis, including 20 to 30 companies in the incubator space. In addition to resources, staff and University of Chicago students, the Exchange will feature partners such as the Argonne National Laboratory, Fermi National Laboratory and the Urban Education Institute Corporate partners include JPMorgan Chase, Samsung and Cisco Systems. Several startups already have taken up residence, including Qualia Health, Quantitative Insights and Legacy Complete

But job creation isn’t the only benefit of tech sector incubators; they contribute to wealth creation as well Mason explains that the $60M in funding that Catapult companies raised generally reflects an increase in value that angels and venture capitalists, who are typically Illinois-based (although this is changing), are attributing to those companies “That in turn means more hiring, and eventually a return to those investors,” he says That return can then be reinvested in other companies showing promise in incubators or the market generally, and the cycle becomes self-perpetuating.

“If you have more investments, you have more exits, and then more reinvestment, more jobs, more wealth, etc ” says Mason “Getting these things started and moving quickly but thoughtfully

i s e x a c t l y w h a t a g o o d i n c u b a t o r does It’s an engine of new growth t h a t h o p e s t o p a y o u t s c a l e a b l e returns for decades ”

What’s more, incubators help to position Illinois competitively within the overall domestic economy, which in turn enables the state to attract new businesses and investments. “Think of Microsoft and Seattle, Google and Silicon Valley, Sears and Chicago,” says Mason “Incubators help to ensure that our region is inherently thought of as a place where things can happen Such branding reassures investors, attracts talent to the region and ‘seeds’ future growth.”

Whereas “large, established businesses optimize for execution on an existing revenue stream,” he contends, “startups by definition have no revenue stream and will die unless they create one Incubators, when designed right, help to ensure that the startups most likely to create new technology have the best chance of success.”

That said, incubators provide indirect benefits to established businesses, as well “It’s commonly the case that startups are solving issues that much larger, established businesses face,” Mason argues, explaining that startups may create a tool or process that enables established businesses to optimize their existing processes, which in turn makes them more cost-efficient. “Having a healthy base of startups in Illinois is a bit like outsourced research and development,” he observes “Incubators are a constant well from which established businesses can look for ammunition in their fight to retain or grow market share ”

Plante Moran serves as Catapult’s accounting firm sponsor, and as such the firm consults with early stage Catapult clients to help t h e m w o r k t h r o u g h t h e g r o w i n g p a i n s o f a s t a r t u p b u s i n e s s . “We’ve also helped companies identify opportunities that can help them as they grow. For example, some companies are developing new and unique solutions that could qualify them for research and development tax credits,” explains Matt Dopp, CPA, partner with Plante Moran

Dopp recognizes the positive impact incubated companies have on the regional economy, explaining that, “We‘ve seen a number of companies graduate successfully through their incubators to leasing their own space with continued staff growth. Many of these companies have had a positive impact on the business community, as well as the local economy ”

Dr Kyle Harfst is the executive director of Economic Development at Southern Illinois University Carbondale, as well as the executive director of the SIU Research Park, which sits on 41 acres and has approximately 200 full- and part-time people working on 20 different enterprises The mission of both these institutions is to e s t a b l i s h a n d s u p p o r t a n e n v i r o n m e n t t h a t f o s t e r s i n n o v a t i o n , commercialize University discoveries, and advance entrepreneurs h i p a n d e c o n o m i c d e v e l o p m e n t w i t h i n S o u t h e r n I l l i n o i s a n d throughout the region Looking at the numbers, in 2014 SIU Econ o m i c D e v e l o p m e n t a s s i s t e d 5 7 a r e a b u s i n e s s e s w i t h e i t h e r startup or expansion phases, which led to the creation or retention of 313 jobs, and secured $7 8M in financing and investment

Harfst explains that organizations such as SIU Economic Develo p m e n t / S I U R e s e a rc h P a r k a r e i n s t r u m e n t a l i n a d v a n c i n g t h e state’s economy in several ways “We provide technical assistance to nascent entrepreneurs who have not yet started a business In many cases, they are unsure of what it takes procedurally to start a business,” he says “Beyond that, they may need assistance in understanding their industry, obtaining relevant market research, assistance in writing a business plan, or assistance in obtaining financing ” A Technology and Innovation Services division further supports incubated businesses with services that include 3D prototyping and product development, guidance on protecting intel-

lectual property, exploratory patent r e s e a rc h a n d t e c h n o l o g y - f o c u s e d market research

Another Illinois incubator, EnterpriseWorks, focuses on science and research-based startups commercializing technology from the University of Illinois. Personify is one of EnterpriseWorks’ greatest success stories This video-conferencing software company uses 3D technology based on software developed by Electrical and Computer Engineering Professor Sanjay Patel, Personify’s CEO and co-founder The software visually separates the user from his or her environment and projects the resulting image within a shared digital space. In January of this year, Intel announced that it would begin including Personify’s new software in Windows computers outfitted with its new RealSense 3D camera "Imagine watching a movie online with your friends, or playing a game together while being able to see their faces, not in a separate video window, but together and overlaid in the same space, sharing the experience as a group," explains Patel in a Personify press release. "With Personify, that experience is possible today From the beginning, our vision has been to make a video call feel more life-like "

Currently, there are more than 85 startups being incubated at EnterpriseWorks, and over 110 companies have graduated Acco r d i n g t o n u m b e r s r e l e a s e d i n 2 0 1 5 , t h e i n c u b a t o r g r a d u a t e s approximately a third of its tenants annually. Of those graduates, 77 percent remain in Illinois Furthermore, EnterpriseWorks incubated companies have raised more than $822M in outside capital

Perhaps surprising for some, incubators have been a part of the Illinois government’s economic strategy for decades Starting A Small Business Incubator: A Handbook for Sponsors and Developers, released by the Illinois Department of Commerce and Community Affairs back in 1985, stated that, “With the expansion of small firms within and beyond the incubator building itself, the local economy is strengthened; job opportunities are created; and physical, economic and social benefits can be achieved for the neighborhood and the city. Incubators themselves are not a cureall for a troubled economic base, but they can be integral parts of broader economic development strategies at the local level ”

Thirty years later, incubators remain a key component of Illinois’ economic development strategy

5 REASONS YOUR BUSINESS IS DOOMED

No executive team is flawless, but avoiding these business mistakes could help your track record.

By Kristine Blenkhorn Rodriguez

The road not taken is a tough concept for most business leaders. Not the ones who make successful choice after successful choice They manage successive hurdles, seemingly bathed in a golden light that is all knowing

But when the road you take your company down is less than desirable in its outcome, the road not taken can haunt.

Just ask Jim Wong, founder and CEO of BrilliantTM, recently named the fastest growing company on Crain’s 2015 “Chicago Business Fast 50” list

“This is my third company Each time you succeed and are recognized for it, people want to call it an overnight success But it never is,” says Wong. “My current company’s success has been the result of five years of hard work and then some.”

Wong admits to decisions he wishes he had not made, successes not quite as sweet as he had hoped for, and unanticipated

homeruns might never come So when we somewhat glibly tell you about the five things dooming your company, take us with a modicum of discretion. The seasoned experts we’ve interviewed here have seen companies just like yours fail or falter. But each is quick to point out that one company’s mistake may be another ’s saving grace

In that spirit, we have limited ourselves to some of the most egregious offenders See if you recognize your organization in any of these common errors

1. You forgot core is king

This error is the fatal flaw of many entrepreneurs, says Wong “You start a business and you know what your core business is But if you are managing it right and encouraging your people, you get a lot of opportunities thrown your way.” It’s not wrong to explore some of these, he says, but you need all hands on deck to keep the focus on your core growing business in the early years.

“Too many times, we don’t plan for the unexpected,” Wong explains “If you don’t have a plan for how to handle new opportunities, your team can end up getting distracted and chasing multiple paths that conflict ” When that happens, your people won’t know where the business is headed and where their focus should be, cautions the CEO. Resources won’t be allocated properly and strategy will become muddied

“Put a process in place,” he advises “Things are moving so much faster than they were 10 or 15 years ago To evaluate and make decisions as quickly and precisely as you need to, there needs to be some rigor to the process. Without that, you can fly in too many unproductive and unprofitable directions.”

Drs Amy Lui Abel and Rebecca L Ray of the Conference Board call this using “a cold set of eyes.” “If you’re not making data-

driven decisions based on what drives your business, you’re in trouble,” says Ray “Continuing to fund something because it’s the CEO’s pet project when it should have had a breakthrough or shown a profit a year ago, is not wise ”

2. You forgot customer s also reign

“Customer is king as a marketing catchphrase instead of an action item spells trouble,” says Abel. A good example of this is when internal technical systems are disconnected or misaligned with customer-based systems

“A good retail system has eliminated any extra clicks or steps Most companies instead expect the customer to adapt versus aligning to customer needs,” she says “There’s talk of, ‘Which organizational chart do we have to rejigger to support this process change and is that too much work?’ versus ‘This is what the customer demands or needs so we’ll make it happen.’”

3. You went all cheap & cheer ful

“Better before cheaper” is just one of three guiding business principles that Deloitte’s Michael Raynor says has led many companies to success. The research director details these principles in his recent work, The Three Rules: How Exceptional Companies Think, co-authored with Mumtaz Ahmed

“Look at Maytag Going on 20 years, they had exceptional financial performance because they were highly differentiated. They could demand a price premium because their products were perceived as high quality and a cut above When the competitive environment around them changed in the 1980s, they had some strategic and tactical reactions. Some were perfectly rational but they turned out to be the wrong ones because they weren’t aligned with ‘better before cheaper,’” says Raynor He adds that, “Maytag's run of superior performance lasted from the mid-60s to the early 90s Since being acquired by Whirlpool, there’s been a sustained effort to return the brand to its roots in innovation and quality ”

He points out that it’s certainly possible to build a large and relatively long-lived company with the cheaper mentality, but most of those companies find it hard to sustain profitability over time. When their competitors go to bat using innovation and true differentiation, price wars cease to be as effective

4. You lost respect for debt & liquidity

John Dischner, a turnaround specialist and managing director for AlixPartners, has seen too many companies play fast and loose with financials “It’s not necessarily that they don’t have their eyes on the big picture they know how much money is in the bank but they lose their focus on short- and long-term liquidity. If you asked the financial team how its cash-flow picture looks over the next several quarters, taking into account any seasonality in the business and large project completion dates, they can’t necessarily tell you ”

Some companies are so healthy that it doesn’t really matter, says Dischner, but in others, it’s a sure sign of insolvency risk or f a i l u r e . “ T h e C F O i s s o f o c u s e d o n c l o s i n g t h e b o o k s t h a t h e misses the month-to-month movement of cash I see it a lot in middle-market companies.”

Combine the lack of a financial snapshot with a disconnect b e t w e e n t h e c o m p a n y ’s s t r a t e g i c i m p l e m e n t a t i o n a n d i t s d e b t level, and you have a recipe for disaster “Things change quite q u i c k l y L o o k a t t h e m i n i n g i n d u s t r y f r a c k i n g i n o i l a n d g a s O v e r t h e p a s t f i v e t o 1 0 y e a r s , p r i c e s a s w e l l a s s u p p l y a n d demand have changed Many of the industry’s players haven’t r e m o v e d c o s t s q u i c k l y e n o u g h , b u t t h e e x t e r n a l e n v i r o n m e n t requires it ”

Dischner has seen companies from every sector with too much debt fail to react quickly enough to changes in the competitive market “And that’s when they bring firms like mine into the picture,” he says “Many of them scratch their heads because technology has caused changes to happen at a rapid pace Their decisions and reaction times have to match that pace in order to stay solvent.”

5. You don’t know your next leaders

“It’s a potential fatal flaw when companies fail to make a strategic bet on what the world will look like in the not-too-distant future,” says Ray. The fatal aspect comes into play because, in the event of a labor market shortage where companies compete not just for top-notch workers but simply for warm bodies, workers need to be prepared now for jobs that don’t even exist yet And leaders need to be prepared to blaze a trail in that environment.

The Conference Board’s DNA of High Performing Organizations (2015) explains that, “As your organization looks to develop a g l o b a l m i n d s e t a m o n g l e a d e r s , c o n s i d e r a l i g n i n g l e a d e r s h i p d e v e l o p m e n t p r o g r a m s w i t h t h e b u s i n e s s s t r a t e g y s o l e a d e r s understand the ‘on the ground’ challenges associated with product development, operations, customer service and other funct i o n s . T h i s m u s t b e d o n e i n a s y s t e m a t i c w a y, b e g i n n i n g w i t h young leaders and in lock-step not only with succession management conversations, but also in strategy development sessions, as the bench strength (or lack thereof) will have implications for the ability to execute the strategy ”

While it’s not always possible to predict which technical or non-technical skills might be necessary in a world that hasn’t yet come into being, training employees in areas that will help them regardless of specific job function is sure to enhance productivity overall. Critical thinking, creativity, problem-solving and collabor a t i o n a r e b e c o m i n g b a s i c n e c e s s i t i e s i n o u r i n c r e a s i n g l y n e tworked, matrixed world of work.

Making Chicago’s Fas t 50

A s k J i m Wo n g a b o u t B r i l l i a n t ’ s n u m b e r - o n e s l o t o n Crain’s 2015 Fast 50, and t he first words you hear are, “Honestly, I wasn’ t even sure we’d make t he list.” His modesty is epic.

“ We surprised ourselves,” he q uickly adds.

But ask him what he did to get his company there, and he’ll speak volumes. “The first t hing we did was have the right plan. I had to have the right vision of where we wanted the company to go.” And when he says vision, he means t hings visualized, planned and plotted, wit h contingency plans for the unexpected.

“I knew what I wanted t he com pany to look like in five years. I knew t he size and t he profitability. I knew what markets we would be in, t he type of organization we would become in five years. And I knew t he niches of t he marketplace.”

Brilliant specializes in s t af fing accounting, finance and IT positions, and as such, Wong finds himself competing against some behemot hs. For g rowt h at t he rate he has achieved, is vision really all it takes?

Of course not, says Wong. And t hen q uickly hits you wit h what may sound like anot her manag ement consulting paradigm: “The right people are also req uired.”

Seriously, Jim? Oh yes.

“ I t ’ s e a s y i n o u r b u s i n e s s f o r p e o p l e t o b e c o m e jaded and view t he people we ser ve on bot h ends of t he hiring eq uation as a transaction. That ’s not what we’ r e a b o u t . I t ’s a b o u t m a k i n g p e o p l e’s l i ve s b e t t e r, bot h t he hiring manager and t he candidates. You have to buy into t his basic premise to share our values and fit into our culture.”

Third key to success? Wong will tell you it ’s t he right process, systems and culture.

Par t of his secret sauce may be t he advisor y board h e u s e s , f i l l e d w i t h f o r m e r c l i e n t s a n d c a n d i d a t e s . “They’re my sounding board. You know t hat saying in golf about not being able to see your own backswing? Well, I use my board to show me what I’m not seeing. T h ey a s k m e t o u g h q u e s t i o n s a n d p u s h b a c k o n my answers.”

A founder and c hief executive who asks to be c halleng ed to avoid blind spo ts? Well, t hat may be par t of t he secret sauce as well.

Keith Staats, JD Executive Director Illinois Chamber Tax Institute

Is Your Time Really Up?

What options do taxpayers have when the protest period for an unfair tax assessment has expired?

Under Section 200 175(a) of the Illinois Department of Revenue’s rules for the Administrative Hearings Division, a taxpayer can seek a “late discretionary hearing” for a Notice of Tax Liability under Sections 4 or 5 of the Retailers' Occupation Tax (the "ROT"), and any tax in which these ROT Sections are incorporated by reference. (Generally these provisions are incorporated into the various excise taxes )

What’s more, Section 908(d) of the Illinois Income Tax Act provides that “the Department, at any time before such assessment is reduced to judgment, may (subject to rules of the Department) grant a rehearing (or grant departmental review and hold an original hearing if no previous hearing in the matter has been held) upon the application of the person aggrieved ”

In other words, Mr. Smith may have a fighting chance

Procedurally, a taxpayer is required to make a request to the Department's Chief Administrative Law Judge for a late discretionary hearing in the case of sales and excise taxes, and a rehearing in the case of the Illinois Income Tax Act A copy of the Notice of Tax Liability or Notice of Deficiency should be attached to the request, along with the reason(s) the taxpayer failed to protest the Notice within the statutory time period

While the Department hasn’t broadcast standards for evaluating rehearing requests, taxpayers may wish to follow the same standards used by the Department in evaluating penalty abatement requests based on reasonable cause For example, Section 700 400(e)(2) of the Depart-

ment’s Uniform Penalty and Interest Act rules p r o v i d e s t h a t r e a s o n a b l e c a u s e c o u l d r e s u l t from “the death, incapacity or serious illness of the taxpayer (or his tax preparer) or a death or serious illness in his or her immediate family which causes a late filing and payment of tax due In the case of a corporation, estate, trust, e t c , t h e d e a t h , i n c a p a c i t y, o r s e r i o u s i l l n e s s must have been of an individual having sole authority to file the return (not the individual preparing the return) or make the deposit/payment, or a member of such individual's immediate family.”

Section 700 400(e)(3) also provides that “an unavoidable absence of a taxpayer (or tax preparer) due to circumstances unforeseeable by a reasonable person may also constitute reasonable cause.” And, states Section 700.400(e)(5), reasonable cause can be found in situations involving “factors beyond a taxpayer's control such as destruction by fire, other casualty or civil disturbance, of the taxpayer residence or place of business records ”

All that said, it really never hurts to make the request even if none of the situations I’ve just listed apply If the request is granted, the assessment protest is allowed

Now, if the request is granted and less than $ 1 5 , 0 0 0

t h e Department’s rules governs taxpayer representation. If more than $15,000 is at issue, the case will fall under the jurisdiction of the Independent Tax Tribunal, and the taxpayer will need to be represented by an attorney

MR SMITH COMES TO YOU ONE DAY WITH A NOTICE OF TAX LIABILITY OR OF DEFICIENCY ISSUED BY THE ILLINOIS DEPARTMENT OF REVENUE. ALTHOUGH THE 60-DAY PROTEST PERIOD IS UP, MR. SMITH HAS A GOOD REASON TO COUNTER IT. CAN IT STILL BE CHALLENGED?

If the request for a rehearing is denied, the taxpayer does have the option to pay the assessment and then file a claim for a refund If the refund claim is denied, the taxpayer can then protest the refund claim denial. Under Section 911(a) of the Illinois Income Tax Act, a claim for refund can be filed within three years of the tax return’s due date for the year at issue or within one year of the date of the tax payment

Taxes governed by the refund claim provisions of Section 6 of the Retailers’ Occup a t i o n Ta x A c t g e n e r a l l y p r o v i d e s i m i l a r t e r m s , b u t i n a l l s i t u a t i o n s y o u n e e d t o c a r e f u l l y e v a l u a t e t h e f a c t s a n d c o n s u l t with expert counsel to determine whether a refund claim is possible

This discussion is specific to Illinois law and regulations, and other states will have their own requirements Even the City of Chicago and Cook County have their own separate requirements for the taxes they administer Regardless, the bottom line is that even if the normal time for challenging an assessment has expired, your client still may have some form of recourse

MINDS

We A l l S e l l .

"Sales." "Selling." They're harmless words guaranteed to induce a nails-on-chalkboard cringe from just about anyone who isn’t involved in sales.

WHETHER IT'S BECAUSE WE’VE HAD A BAD EXPERIENCE WITH A PUSHY SALESPERSON OR WE WERE FORCED TO SELL BAND CANDY AS KIDS, THE THOUGHT OF HAVING TO SELL ANYTHING QUICKLY BRINGS ON A BOUT OF ANXIETY.

A n d y e t , s e l l i n g i s a n i n s t i n c t u a l a n d f u n d amental skill So instinctual and fundamental, in fact, that we first began to use it in kindergarten when we convinced Lucy to share her Legos

In his book, To Sell Is Human, Daniel Pink reveals that 1in 9 Americans works in sales, while the rest depend on “non-sales selling” to earn a living corporate finance types included.

Kindergarten may be far behind us, but the ability to sell is no less critical as adults when it comes to getting things done Whether we're trying to motivate a team, train new staff, get resources for a project or earn a promotion, we have to be able to convince, persuade and move people As Pink says, we’re all in sales now

So how do we get better at it without feeling as much of the angst that goes right along with it?

Pink highlights three essential requirements: Attunement, buoyancy and clarity.

common ground, while making sure you listen more than you talk.

A s P i n k p o i n t s o u t , t h e r e ’s a l s o a p h y s i c a l aspect to attunement, namely mimicry. I admit that I thought this a bit strange at first After all, isn’t mimicry the same thing as faking it? But then I spent time observing conversations, and realized that “mirroring” is something we do u n c o n s c i o u s l y w h e n w e a r e g e n u i n e l y i n t e re s t e d i n w h a t t h e o t h e r p e r s o n i s s a y i n g I f someone you respect leans in to tell you something, you instinctually lean in too. Essentially, mimicry signals trust and trust, in my opinion, is the most essential ingredient in achieving attunement

B u o y a n c y W h a t P i n k c a l l s b u o y a n c y, I prefer to call grit. One of my favorite quotes is from Michael Jordan: “I've missed more than 9,000 shots in my career. I've lost almost 300 games Twenty-six times, I've been trusted to take the game winning shot and missed I've failed over and over and over again in my life. And that is why I succeed ”

T h a t ’s g r i t . R e g a r d l e s s o f h o w m a n y t i m e s you fail in moving others, you have to be willing to try again. It all comes down to “self-talk,” o f w h i c h , P i n k s a y s , t h e r e a r e t h r e e s t a g e s : Before, during and after the “sale ”

Before the sale, ask yourself, “Can I do this?”

. ”

Attunement. Pink describes attunement as the ability to bring your actions and outlook in harmony with other people and your current context Pink’s point is that understanding what o t h e r s t h i n k ( w h a t h e c a l l s “ p e r s p e c t i v e - t a king”) is much more effective than understanding what they feel when it comes to moving people It’s the idea of “using your head and not just your heart ” He notes that although virt u o u s a n d i m p o r t a n t i n c r e a t i n g l o n g - l a s t i n g relationships, empathy can work against you when selling because it can cause you to give u p t o o m u c h i n o r d e r t o “

According to research he cites, we tend to be happier with the results if we focus on perspect i v e - t a k i n g r a t h e r t h a n e m p a t h y E s s e n t i a l l y, you need to ask questions that help you find

Although positive self-talk (“I’m awesome”) is more effective than negative self-talk (“I suck”), i n t e r r o g a t i v e s e l f - t a l k i s t h e m o s t e f f e c t i v e o f all The impact is twofold asking yourself if you can do it will prompt you to strategize for success, and interrogating yourself may clarify the intrinsic motivations behind your desire to succeed (which in turn may have an inspirational effect)

Yo u S e l l . I S e l l .

Rose Cammarata

CPA, CGMA ICPAS Board of Directors

D u r i n g t h e s a l e , k e e p y o u r s e l f - t a l k p o s i t i v e , which will inspire positive emotions Be genuine, but also be mindful that too much negativity can u n d e r m i n e y o u r e f f o r t s t o m o v e o t h e r s t o w a r d s your cause

After the sale or lack thereof, explain negative outcomes to yourself in terms of temporary, specific and external, rather than permanent, pervasive and personal.

Clarity. Clarity, Pink explains, is the capacity to help others see their situations in fresh and more revealing ways He suggests finding and conveying the 1 percent; in other words, the essence of the issue that drives the other 99 percent

Framing an issue can bring clarity, and one way to do that is to introduce contrasting alternatives to highlight the virtues of what you are proposing There are many other ways to frame an issue and I highly recommend Pink’s book for more on the topic

P i n k a l s o d e s c r i b e s c l a r i t y a s t h e c a p a c i t y t o identify problems others didn’t realize existed. The two key skills in this are the ability to curate data to find the most relevant information and the ability to a s k q u e s t i o n s t o u n c o v e r u n d e r l y i n g i s s u e s a n d opportunities

Moving or selling others is a fundamental and valuable skill whether or not your job is in sales.

T h e r e q u i r e m e n t s f o r s u c c e s s f u l s e l l i n g a t t u n ement, buoyancy and clarity are qualities we all have the ability to develop

The Illinois CPA Society’s charitable partner annually awards $165,000 in scholarships and training programs to more than 100 of the most diverse and deserving accounting students across the state. This makes your profession’s charity unique among its peers.

Every year, we have more qualified applicants than awards to give. Your gift will help close that gap and directly support future CPAs.

Make

www.icpas.org/annualfund.htm

A special thank you to the following INSIGHT advertisers who exhibited at this year’s Show.

Background Check? Why Bother

The potential for bad p ublicity for one, and the risk of legal liability for another.

WHETHER IT’S A FRAUD INVESTIGATION OR AN EMPLOYEE HIRE, BACKGROUND CHECKS ARE THE FIRST ESSENTIAL STEP IN UNCOVERING ANY CRIMINAL OR LITIGATION HISTORY THAT COULD IMPACT YOUR COMPANY’S REPUTATION

Fraud is on an upswing reason alone to put background checks front and center in your hiring process. The reasons people commit fraud are endless, but honestly, the reasons aren’t important; what matters is protecting yourself and your company from reputational damage and legal liability.

Employers have a duty to protect their employees, customers, clients, et al from the risk of harm If a reasonably diligent reference and background check would have revealed that, say, a job applicant lied, is unfit for the position, or may be a threat to others, then the employer ’s failure to investigate could result in legal liability

Studies indicate that roughly 50 percent of applications contain false information Why do people lie? Desperation is the primary motivator wanting to gain an edge in the selection process, maintain a certain lifestyle, or revitalize a lagging career, for example

The most common lies relate to educational credentials, criminal histories, liens and judgments A background check will help to shed light on the truth, and prevent embarrassing revelations in the future For example, discrepancies that come to light include outstanding speeding tickets, a pattern of lawsuits, bankruptcies or a failure to pay child support Do you really want to hire someone who doesn’t take care of their legal and moral obligations?

So what should you search for to get at the truth and protect your company?

Financials: Check for bankruptcies, chargeoffs and delinquent payments

Legalities: Look out for civil judgments or liens; federal or state lawsuits, tax liens, or reg-

ulatory matters; and convictions for fraud, domestic violence, sexual offenses, DUIs, etc

Open source information: This type of data includes public information housed on social networking sites, in articles and on blogs

E d u c a t i o n : Make sure applicants have earned the credentials they say they have

When it comes to researching public information, I recommend checking out these sites:

n Inforuptcy [inforuptcy com] maintains a free portal where you can find bankruptcy case information and track cases.

n Pacer [pacer gov] allows public access to electronic court documents, including criminal, civil and bankruptcy information. Check every state in which the individual has lived

n Many states and municipalities have online portals that include a wealth of public data such as property taxes, litigation, liens, delinquencies, corporate registrations and criminal histories. Check out the Cook County Register of Deeds, State of Illinois Secretary of State, Illinois State Police and Cook County Assessor ’s Office.

n Wayback Machine [archive org] will tell you when a website was created, and therefore allows you to confirm if in fact a business was operational at the time indicated Additionally, licensed private investigators have access to data tools that aren’t readily available to the general public It may be worth using their services as an extra failsafe

Over the coming months, I’ll share more of my expertise and advice in an effort to combat the growing incidences of fraud both at home and abroad.

Theresa Mack

CPA, CFF, CAMS, PI Cendrowski Corporate Advisors Licensed Professional Investigator, Anti-Money Laundering Specialist and former FBI Special Agent

L A S S I F I E D S

VALUATION OF YOUR CLIENT’S BUSINESS OR

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11 .20.15

The Standard Club, Chicago

Women’s Leadership Breakfast

2015 Women to Watch Awards

Join us for a dynamic panel discussion featuring our 2015 Women to Watch Award winners and the chance to network with your peers.

These exceptional women will share their experiences and perspectives on important issues we all face, including gender-related challenges and opportunities, finding work-life balance, and how to empower the advancement of women in the accounting profession.

Have your questions ready!

EXPERIENCED LEADER

Jill Krueger

President & CEO, Symbria, Inc.

EXPERIENCED LEADER

Dorri McWhorter

CEO, YWCA Metropolitan Chicago

Date: Friday, November 20, 2015

Time: 7:30AM Registration/Networking, 8:00AM Breakfast

8:50AM - 10:00AM Awards

Presentation/Panel Discussion Location: The Standard Club 320 S. Plymouth Court, 5th Floor Chicago, Illinois

CPE Credit: 1 Hour

FOS: 1 Personal Development

Code: C42192

Cost: $39 Per Person

EXPERIENCED LEADER

Jill Schwieterman

Tax Partner, Ernst & Young LLP

EMERGING LEADER

Amanda Paton

Senior Manager, Frost, Ruttenberg & Rothblatt, PC

The Illinois CPA Society’s Women’s Executive Committee and the AICPA’s Women’s Initiatives Executive Committee together recognize and celebrate women who have made notable contributions to the accounting profession, their organizations, and the development of women as leaders.

The mission of the Women's Executive Committee of the Illinois CPA Society 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.

For information on women’s programs, contact Gayle Floresca at 800.993.0407, ext. 7618 or visit: www.icpas.org/women.htm

capitolReport

OUR MAN IN SPRINGFIELD REPORTS ON THE LATEST LEGISLATION

Marty Green, Esq ICPAS VP of Government Relations, greenm@icpas org

A Privileged Profession

as always, the illinois “accountant’s privilege” is a hot topic of conversation.

Section 27 of the Illinois Public Accounting Act explains that, “A licensed or registered certified public accountant shall not be required by any court to divulge information or evidence which has been obtained by him in his confidential capacity as a licensed or registered certified public accountant.”

If you, as a CPA, have been contacted by an attorney requesting information or have received a subpoena requesting the production of documents, there are a number of nuances you need to be aware of before invoking the Accountant’s Privilege First and foremost, consult with legal counsel as soon as possible, and involve that counsel in y o u r p r i v i l e g e a n a l y s i s a n d i n t h e r e s p o n s e t h e s u b p o e n a requires Most importantly, ensure your actions do not waive the privilege by unintentionally disclosing the privileged information to a non-agency third party. Illinois Supreme Court Rule 2 0 1 ( b ) ( 2 ) r e c o g n i z e s w h e n t h e t h i r d p a r t y i s a n a g e n t o f t h e client, and no waiver occurs

A progeny of state and federal court cases provide guidance in assessing the privilege’s scope. First, the privilege only protects information that the client has communicated to his/her accountant in confidence Generally, the privilege doesn’t apply to information the client has submitted for the purpose of disclosure to third parties, unless those third parties share a common interest with the disclosing party Specifically, the Illinois Supreme Court in In re October 1985 Grand Jury held that the privilege can’t be invoked for information obtained in preparing state income tax returns, since there’s little expectation of privacy when it comes to these records Similarly, in United States v Arthur Young & Co 104 S. Ct. 1495, 1503 (1984), we see the rule applied to auditors’ work papers used to prepare a client’s tax returns that previously were subject to disclosure through an IRS summons

Separate and apart from the state privilege, in 1998 Congress amended the Internal Revenue Code § 7525 to create a limited accountant-client privilege that extends the common law attorney-client privilege to federally authorized tax practitioners providing “tax advice ” This privilege can only be applied to non-

criminal tax matters before the IRS or noncriminal tax proceedings in Federal Court

The Illinois Accountant’s Privilege generally applies to state court actions; there is no confidential accountant-client privilege under federal law, and no state-created privilege has been recognized in federal cases. However, in limited instances the federal courts may recognize the privilege when exercising diversity jurisdiction and applying Illinois state law This limited federal recognition generally doesn’t apply to federal regulatory agencies unless there’s a separate, specific provision such as Section 2575 of the Internal Revenue Code

Earlier this spring, the Illinois Supreme Court in Brunton v Kruger, 2015 IL 117663 (Ill. 2015) issued a ruling where two significant issues were considered: First, whether the Accountant’s Privilege belongs to the client who communicated the information or to the accountant who received the information; and second, whether the testamentary exception is applicable to the Accountant’s Privilege

The Court held that the accountant owns the privilege, and failed to extend the common law testamentary exception as it does in the attorney-client privilege The basis of the Court’s ruling was that the Accountant’s Privilege is not intended to function purely as an evidentiary rule as other privileges do, but rather is an attribute of the accounting profession.

Furthermore, previous court cases have narrowly construed the Illinois Accountant’s Privilege as protecting accounting services involving opinions on financial statements. This narrow construction distinguished traditional attest services from rendering nonfinancial consulting services The Brunton Court rejected the appellee’s narrow interpretation and looked to the broader definition of “Accountancy Activities” in Section 8.05 of the 2013 updated Public Accounting Act (Public Act 98-254) The Court held that the legislative intent of the accounting functions list in Section 8.05 was not exhaustive.

Lastly, Section 27 prohibits a CPA from invoking the Illinois Accountant’s Privilege in hearings and investigative matters initiated by the Illinois Department of Financial and Professional Regulation for alleged violations of the Illinois Public Accounting Act. The information here only skims the surface, but I hope makes you a little more familiar with the application and operative use of this important CPA tool.