Insight Magazine - Spring 2013

SPRING 2013 | www.icpas.org/insight.htm

34 How to Be a Fearless Leader

This one is for the movers and shakers The up -at-5-a m yoga warriors The run- during-lunch and network-after-work crowd The I’m-taking-this - class -because -it-interests -me set The that- office -hasmy-name -written-all- over-it group

38

CPA 2020

Nearly three years ago the Illinois CPA Society asked CPAs what they thought the profession would look like in 2020 Now, with only seven short years to go, we take a look at what needs to be topof-mind among finance leaders looking to the future. 42

Are You Ethical?

Six strategies for navigating moral quandaries in the workplace and keeping your reputation intact

18 Strategy Models for Recovery

Economic doom and gloom has given rise to today’s most compelling, cutting- edge models for business growth 22

Nonprofits CFO Hunting

Three strategies for nonprofits in search of the perfect executive hire

Economy Big Business Illinois

The state is working hard to make itself evermore attractive to businesses far and wide

Small

What do 2013’s tax law changes really mean to the nation’s small-business owners?

With new provisions on the horizon, healthcare is still something of a mystery

Minority students find the inspiration to pursue illustrious careers in the accounting field 4

With the Spring Session in effect, we ’ re returning to old issues sorely in need of some resolution

How do you define success in the business of forensic accounting?

Trade tantalizing short-term predictions for long-term investing success

Must-read-must-know news for young accounting pros

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FIRST WORD

Allow Me To Introduce Myself

accounting because I liked math But I also wanted to be an advisor, a professional that business leaders could trust not to mention that the career offered security during a poor economic time While a lot has changed in the profession and the profession has had its fair share of road bumps along the way many things still re ma in the s a me : The trus t a nd re s pe c t C PA s e a rn, the profe s s iona l a nd pe rs ona l rewards, and the security the CPA credential provides

Whether you’re a CPA in public accounting, industry, education, government or another valuable endeavor, as a group, we’re looked upon as leaders, thinkers and consummate professionals, and the profession remains promising for existing and new professionals alike In serving as this year’s Board Chair, it’s my intent to make sure we continue to promote these distinctions, to encourage Society engagement, and to work towards what’s best for Illinois’ CPAs

Working together is important to me, so I’m going to try to talk with members as much as I can Since I am just the band’s conductor, I’ll also encourage my fellow directors to try to make themselves available to hear the perspectives of Society members. I hope this initiative will enable the Society to continue advancing its mission to fulfill the needs of its diverse and dynamic membership

The Society prides itself on supporting and guiding members in need of technical assistance, legislative and regulatory updates, continuing education and development, and career and business networking. Under my watch, we will continue to push the future of professional education and advance the core competencies of CPAs with our innovative learning products

I also want to set the pace for the next generation Throughout the year, we hope to roll out a variety of programs that engage our expanding student and young professional member bases. Over the last 30 years, I learned that developing the right network early and having a core group of people to discuss career opportunities and business issues with, and even develop lasting friendships with, forms the foundation of a fulfilling career It just happens that the Society’s membership consists of the best and brightest in the state, and it’s been a steadfast reason for my increased participation with the Society year after year Whether you’re a CPA or pursuing it, the Society is here to support you every step of the way.

I’m sure you’re getting the point I’m driving at: Being a member of the Illinois CPA Society is important to our professional and personal lives I think being a member is a valuable investment for every CPA, and I will continue to promote that by proudly and honorably serving in this leadership position and establishing myself as a role model for others. I invite you to join me in standing with both the profession and the Society.

INSIGHT MAGAZINE

Publisher/ICPAS President & CEO Todd Shapiro

Editor-in-Chief Judy Giannetto

Assistant Editor Derrick Lilly

Creative Services Director Gene Levitan

Creative Services Manager Rosa Garcia

National Sales & Advertising Natalie Matter DeSoto

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

P: 800 501 9571 x127 F: 717 825 2171

E: natalie desoto@theygsgroup com

Circulation/Member Services Director Carl Siska

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

ICPAS OFFICERS

Chairperson, William P Graf, CPA

Deloitte & Touche LLP

Vice Chairperson, Daniel F Rahill, CPA, JD FGMK, LLC

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

Treasurer, Mary Lou Pier Pier & Associates, Ltd

Immediate Past Chairperson, James P Jones, CPA Edward Don & Company

ICPAS BOARD OF DIRECTORS

Linda S Abernethy, CPA, McGladrey LLP

Rosaria Cammarata, CPA, CME Group Inc

Rose G. Doherty, CPA, Legacy Professionals LLP

Gary S Hart, CPA , Gary Hart & Associates Ltd

Margaret M Hunn, CPA, CFE, CFF, CITP, Rozovics Group PC

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

David V Kalet, CPA, MBA, BP Products North America

Michael J Maffei, CPA, GATX Corporation

Marcus D Odom, PhD, CFE, CPA (inactive), Southern Illinois University

Floyd D Perkins, CPA, Ungaretti & Harris

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

Marcus F Schultz, CPA, Dugan & Lopatka CPAs PC

Scott D Steffens, CPA, Grant Thornton LLP

Thomas L Zeller, PhD, CPA, Loyola University Chicago

SEEN HEARD

percent of U S & Canadian professionals who think they will land their next job through networking Source: Right Management

TRENDSPOTTER

Need a Vacation?

If you didn’t take much of a break last year, you weren’t the only one According to surveys by talent and career management firms Right Management and Adecco, most employees didn’t use all their vacation time in 2012 Repeating the findings from 2011, 70 percent of respondents to Right Management’s survey indicated that they didn’t take all the time due to them, and 75 percent of respondents said the same to Adecco This trend grew during the recession and indicates that employees are still under a lot of pressure

To bring some balance back into the workplace, Right Management advises senior management to lead by example and encourage employees to take breaks in 2013 After all, vacation is key to a healthy workforce, and without it employers are likely to see unnecessary turnover, declining retention and higher absenteeism.

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THE TRUTH ABOUT... Writing an Ethical Resume

If you ’ ve gone a while with no call-backs, you may be tempted to “dress up ” your resume. Don’t do it! These tips from the Elephants at Work blog will keep you on the straight and narrow:

n Don’t use a different job title than the one your employers have on record for you

n Exclude short-term employment or jobs left on negative terms

n Don’t claim accomplishments you weren’t responsible for

n Don’t leave off or misrepresent your degree information

n Don’t exaggerate your skills not even a little.

Fraud Risks Rise with Crowdfunding

Internet crowdfunding activity is rising sharply on the coattails of the Jumpstart Our Business Startups (JOBS) Act, says the North American Securities Administrators Association (NASAA) Crowdfunding started as an online money-raising strategy for the public to donate small amounts of money through social networking and other websites to help finance projects or causes Now, small businesses and entrepreneurs are anticipating that the SEC will allow them to raise investment funds online

Nearly 6,800 domains that include “crowdfunding” have appeared since the JOBS Act became law in April 2012 Seeing this as a fraud catalyst, NASAA is creating a new taskforce to monitor crowdfunding and other Internet offerings, and is developing investor and industry awareness programs aimed at preventing fraud

A New Twist to Mentoring

The Illinois CPA Society’s Women’s Executive Committee (WEC) recently launched its “Mentoring Circles” initiative, specifically intended to benefit women of all ages and at all stages of their careers Each Circle is comprised of 8 to 10 women of varying levels of experience from a wide range of practice areas, who meet anywhere between 4 and 12 times a year

These Circles not only offer the opportunity to mentor future women leaders, but also encourage honest feedback, which ultimately promises to help to hone management skills Also, unlike one - evening events, the Circles are an opportunity to build strong personal and referral relationships with women throughout the profession

For more information on the program, contact Gayle Floresca at florescag@icpas org

READ THIS!

Experts interviewed for our Spring issue recommend these must-read books on leadership:

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success, by William M Thorndike (Harvard Business Review Press; October 23, 2012)

Leadership Agility: Five Levels of Mastery for Anticipating and Initiating Change by William B Joiner and Stephen A Josephs (Jossey-Bass; October 20, 2006).

The Little Black Book of Leadership by Todd Dewett, Ph D (TVA Inc ; December 1, 2010)

investors who checked into their investment professional’s background in the last five years. Source: FINRA Foundation

New Name, New Look, Same Great Content

Have you seen the new, improved corporate financial leadership eNewsletter Inside Finance [www.icpas.org/insidefinance.htm]? If your answer isn’t a resounding, “Yes!” then waste no time Scouring the nooks and crannies of the World Wide Web, Inside Finance brings you the latest, most topical stories to inform, educate and even entertain Don’t miss the A p r i l 2 5 issue!

Four Steps to a Fitness -Minded CPA Firm

We’re about a quarter of the way through 2013; how are those New Year’s Resolution fitness plans holding up? If they’re slipping by the wayside, now is a good time to encourage wellness among your employees Here are four tips from the Intuit Small Business Blog to elevate your office’s activity levels

1 Create a fitness-friendly workplace: Organize lunchtime walks, provide bike storage areas, hold stand-up meetings, and plan monthly activities that everyone can participate in

2 Add incentives: Offer recognition and rewards for participating in office-wide “Biggest Loser” or other wellness-related competitions

3. Participate in special events: Encourage employees to train together for local charity fun runs, marathons, triathlons, walks, or other sporting tournaments that they can sign up for as a team

4 Set the right example: If you encourage employees to participate in an after-work jog, get your running shoes on and get out there with them

r ?

Visit w w w ic p a s o r g / v o l u n te e r to lear n about the many volunteer programs offered through the Illinois CPA Society

Seek ‘Hire Knowledge’

Read the new ICPAS H i r e K n o w l e d g e blog by long-time Society member, recruiting expert and Be Fearless Young Professionals Conference speaker (May 31, see p. 48) Renee Beckman. Take a look at the latest CPA CareerSpace eNewsletter [www.icpas.org/careerspace.htm] or visit eINSIGHT [www icpas org/insight htm] for Renee’s latest post!

Deloitte Predicts Increased Divestitures in 2013

According to Deloitte’s Sharpening Your Strategy survey, 81 percent of executives say that pruning their businesses of non- core assets with limited growth potential, nonsynergistic products, or poor performance is one of the most important reasons for divesting Although about 51 percent reported that their divestitures over the last 24 months took longer than expected, valuations remained strong, with 68 percent saying values met expectations, and 17 percent saying they exceeded expectations

TAX DECODED U s e & A b u s e ?

A new Cook County use tax is raising some pretty big issues

By Keith Staats, JD

Effective April 1, 2013, businesses and i n d i v i d u a l s l o c a t e d i n C o o k C o u n t y, I l l became subject to a new tax on purchases o f t a n g i b l e p r o p e r t y m a d e f r o m s e l l e r s located outside the county.

Specifically, a 1 25 percent “use tax” is imposed based on the value of non-titled tangible personal property acquired from sellers located outside Cook County, when the property is first subject to use in county Rather than being imposed and collected at t h e t i m e o f t h e s a l e , t h e t a x h a s t o b e reported and paid by purchasers located in Cook County.

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

* keith staats@us gt com

Simple enough on the face of things, but a number of significant statutory and cons t i t u t i o n a l i s s u e s h a v e b e e n t r i g g e r e d b y this new tax. The tax imposes new compliance burdens on Cook County-based businesses and individuals In price competitive situations, this additional 1 25 percent c o s t m a y s w a y C o o k C o u n t y - b a s e d p u rchasers to favor Cook County sellers rather t h a n s e l l e r s l o c a t e d o u t s i d e t h e c o u n t y A l s o , i t a p p e a r s t h a t t h e c o u n t y d o e s n ’ t have the legal authority to impose this tax.

The Cook County Board of Commissioners passed the non-titled use tax ordinance l a s t N o v e m b e r a s p a r t o f i t s b u d g e t f o r F Y 2 0 1 3 I t j u s t i f i e d t h e o r d i n a n c e a s a means to close “tax loopholes” and to prom o t e t h e p u rc h a s e o f n o n - t i t l e d p r o p e r t y within the county for use within the county

Every person in Cook County who, “in the course of business,” acquires non-titled p r o p e r t y f r o m o u t s i d e t h e c o u n t y w i l l b e r e q u i r e d t o r e g i s t e r w i t h C o o k C o u n t y ’ s D e p a r t m e n t o f R e v e n u e t o r e m i t t h e t a x There’s no explicit requirement for individual residents to do so, however.

Returns must be filed on or before the 20th of each month, remitting tax due on any transaction that occurred in the preceding month The Department has yet to circulate the form and precise filing procedures

A credit will be available for the first nontitled property valued at $3,500 at the time o f f i r s t u s e w i t h i n t h e c o u n t y, w h i c h i s a p p l i e d a g a i n s t t h e t a x p a y e r ’ s a g g r e g a t e county use tax liability for the taxable year. As a result of the credit and practical probl e m s a s s o c i a t e d w i t h t r a c k i n g p u rc h a s e s made outside the county, it’s unlikely that many individual residents will register and pay the tax

The ordinance exempts boats, automobiles and any other item required to be titled and registered with an Illinois government body. It also exempts groceries; medicines; drugs; medical appliances used by publicaid recipients in nursing homes; and insulin, urine-testing materials, syringes and needles used by diabetics.

What’s more, non-titled property that is exempt from the Illinois use tax is also exempt from the Cook County use tax “to the extent that the exemptions contained therein are not inconsistent with the provisions of this article ”

Also, the use tax doesn’t apply to certain “uses” within the county, such as the temporary use of non-titled property by a non-resident who is merely passing through the county, and the temporary storage of nontitled property destined for use solely outside the county Moreover, the tax doesn’t apply to non-titled property used by a non-resident individual or business that uses the property in the course of business and relocates to the county, or opens an office, plant or other facility in the county, if the property has been used outside the county for at least the three previous months. Rolling stock moving in interstate commerce and used by interstate carriers for hire is also exempt

It’s arguable that on its face the tax violates the state constitution and laws The Illinois legislature hasn’t granted Cook County the authority to impose a non-titled use tax In fact, it expressly prohibits Cook County or a “home rule county” from imposing a use tax

or other tax on the use, sale or purchase of nontitled tangible personal property “based on the gross receipts from such sales or the selling or purchase price of said tangible personal property ”

The county may try to support its ordinance by arguing that the use tax is not “based on the g r o s s r e c e i p t s f r o m t h e s e l l i n g o r p u rc h a s e price,” but rather applies to the “value” of the property when it is first used within the county In reality, though, the value of newly purchased p r o p e r t y i s t h e s a m e a s t h e s a l e o r p u rc h a s e price. Regardless, the Illinois Constitution prohibits an “ad valorem personal property tax” or a tax based on value.

Also, it could be decided that the tax discriminates against interstate commerce in violation of the Commerce Clause of the U S Constitution, due to the fact that the county’s new use tax rate exceeds the rate of the corresponding s a l e s t a x , w h i c h , i n e f f e c t , g i v e s p r e f e r e n t i a l treatment to a Cook County-based vendor versus a vendor located outside the county or state

What at first seems straightforward is in fact a hotbed of debate We’ll watch over the next few months to see where the debate finally lands

Please note: This article was written jointly with two of my Grant Thornton colleagues, Chuck Jones, a director, and Hannah Yoo, a senior associate, both in the Chicago office

New Faces, Same Issues

With the Spring Session in effect, we ’ re returning to old issues sorely in need of some resolution

By Marty Green, Esq

The 98th General Assembly was sworn into office at the beginning of 2013 Including more than 33 new members, many of the same unresolved issues confront the newly constituted legislative chambers.

N o p r o g r e s s w a s m a d e d u r i n g t h e f a l l Veto Session and winter Lame Duck Sess i o n o n t h e s t a t e ’ s h e m o r r h a g i n g p u b l i c pension debt, or the social issues of bann i n g a s s a u l t w e a p o n s a n d r e c o g n i z i n g s a m e - s e x m a r r i a g e s T h e r e ’ s n o c l e a r o r d i r e c t p a t h t o r e s o l v i n g t h e s e e n o r m o u s issues, and they continue to bog down the legislative process

Marty is the ICPAS VP of Government Relations, a practicing lawyer and member of the Illinois Bar and a Lieutenant Colonel in the National Guard He previously served as executive assistant attorney general for Illinois Attorneys General Lisa Madigan and Jim Ryan, and as director of the Governor’s Office of Citizens Assistance and assistant to the Governor for Public Affairs, both under Governor James Edgar

* greenm@icpas org @icpasgovt

Looking to the Spring Session, the Illinois CPA Society’s top priority is the passage of legislation to renew and update the Illinois Public Accounting Act, which sunsets on January 1, 2014 Each professional regulatory act expires every 10 years to allow the General Assembly to review the statute and d e c i d e w h e t h e r t h e r e g u l a t i o n s h o u l d b e u p d a t e d o r e l i m i n a t e d a l t o g e t h e r H o u s e Bill 2726, sponsored by Rep. Robert Rita a nd Re p Ra y mond Poe , upda te s the Illin o i s P u b l i c A c c o u n t i n g A c t a n d e x t e n d s the sunset to January 2024 (More informat i o n o n t h e l e g i s l a t i o n c a n b e f o u n d a t www icpas org )

Last year, the Illinois CPA Society introd u c e d l e g i s l a t i o n t o u p d a t e t h e P u b l i c Accounting Act, a year ahead of our sunset date However, it was never called for cons i d e r a t i o n R a t h e r, t h e G e n e r a l A s s e m b l y extended those acts sunsetting in 2013 for six months, and these, together with acts s u n s e t t i n g i n 2 0 1 4 , w i l l n o w h a v e t o b e reviewed during the Spring Session

The CPA profession is well represented from a legislative standpoint. Rep. Natalie Manley (D), representing the 98th House District, began her first term as a member of the House of Representatives. Rep. Man-

ley, a licensed CPA, was formerly with Werm e r, R o g e r s , D o r a n & R u z o n , L L C R e p P a m R o t h ( R ) , r e p r e s e n t i n g t h e 7 5 t h D i strict, begins her second term as a member of the House A registered CPA, Rep Roth previously worked in business and industry S e n P a t r i c i a Va n P e l t - Wa t k i n s ( D ) b e g a n h e r f i r s t t e r m r e p r e s e n t i n g t h e 5 t h S e n a t e District. Sen. Van Pelt-Watkins, a licensed C PA , h a s a P h D i n t h e m a n a g e m e n t o f n o n p r o f i t s a n d h a s s e r v e d a s a p u b l i c a p p o i n t e e t o v a r i o u s b o a r d s S e n J o h n Mulroe (D) begins his second term representing the 10th District in Chicago Sen Mulroe, a registered CPA and attorney, is engaged in the private practice of law and previously served as an auditor with Arthur Anderson. Sen. Michael Hastings (D), representing the 19th District, began his first term as a member of the Senate A graduate o f We s t P o i n t a n d f o r m e r A r m y C a p t a i n , Sen. Hastings is completing the final stretch of the academic requirements to sit for the CPA Exam (For more biographical informat i o n , v i s i t t h e I l l i n o i s G e n e r a l A s s e m b l y website at www.ilga.gov.)

In the coming months, we will be working closely with these legislator CPAs to renew the Public Accounting Act and resolve other issues pertinent to the profession

O n t h e F e d e r a l l e v e l , w e w e r e a b l e t o a v o i d g o i n g o v e r t h e F i s c a l C l i f f a t t h e b e g i n n i n g o f 2 0 1 4 A n d a s s p r i n g a p proaches, we are nearing Fiscal Cliff Part 2, with sequestration fast approaching, which will result in enormous budget cuts across the board Finance experts opine that such drastic cuts could push our fragile economy back into a recession

A I C PA c o u n c i l m e m b e r s f r o m I l l i n o i s will be visiting with members of the Illinois Congressional Delegation later this spring Our council members will visit Illinois con-

g r e s s m a n , w h o s e r v e o n t h e F i n a n c i a l Services Committee and House Ways and M e a n s C o m m i t t e e , t o d i s c u s s f e d e r a l issues of interest to the CPA profession.

With so many new legislators in the Illinois General Assembly and new members of the Illinois Congressional Delegation, the Government Relations Office has been working hard to reset its grassroots initiatives To that end, I’m asking ICPAS members to join the highly effective Legislative C o n t a c t s P r o g r a m , w h i c h b r i n g s u s t h a t much closer to our goal of having one-onone contact with legislators

Contacts are occasionally asked to contact a legislator or member of Congress on behalf of the profession either in support of or in opposition to an issue or pending legislation If you know or have an establ i s h e d r e l a t i o n s h i p w i t h a l e g i s l a t o r o r congressional member, I encourage you to sign up for the program either by visiting www icpas org or contacting me directly And if you’ve already served as a Legislative Contact, thank you for your time and willingness to help to support and shape the profession.

Day of Service

A Good Day for Doing Good

Be part of the Illinois CPA Society’s fourth annual CPA Day of Service. It’s as easy as 1-2-3: Choose a community organization or charity to help. Register your volunteer activity plans at www.icpas.org/CPADayofService.htm.

Receive a free CPA Day of Service t-shirt (while supplies last, free to Illinois CPA Society members). Volunteer as an individual, or get a group together and volunteer as a team.

Questions? Please contact Taylor Banister at banistert@icpas.org or 800.993.0407, ext. 231.

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FORENSICS INSIDER S i g h t s o n t h e E n d G a m e

How do you define success in the business of forensic accounting?

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

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

* bsargent@scgforensics

Success comes in many forms In professional services, it’s usually equated with a happy client. For CPAs in financial planning, it’s a matter of maintaining and growing principal while creating ongoing revenue streams.

F o r e n s i c s i s a b e a s t o f a v e r y d i f f e r e n t nature, however Often, the goal at the start of an engagement is vague, with everyone having different notions of the next steps and the end game One example: I’ve had a C E O t e l l m e t h a t t h e i r C F O w o u l d n ’ t maintain eye contact, which had to mean financial wrongdoing. Good luck putting a work plan together around that!

What we do all know (or think we know)

i s t h a t s o m e t h i n g i s w r o n g , s o m e t h i n g i s missing and/or someone is lying

W h i l e i t ’ s v i t a l t o d e f i n e s u c c e s s e a r l y on, it may need to be redefined often. After all, a typical forensic engagement involves multiple phases, during which many fac-

t o r s c a n c h a n g e . T h i s i s t h e k e y p o i n t : Goals and expectations are a continuous dialogue Remember that the client is most likely new to financial investigations. It’s u p t o t h e a t t o r n e y s a n d a c c o u n t a n t s t o bring the experience needed to avoid the pitfalls that wreck an engagement

Why is this so important? Because without regular communication each party may operate under different assumptions and move further afield from others’ expectations and understanding. This dynamic usually results in unhappy accountants, attorneys and clients, and overall failure

Patrick S. Coffey, Esq. leads Whyte Hirschboeck Dudek S C ’s Corporate Compliance & White Collar Defense Team He has more than 25 years of experience in successfully representing companies and individuals in a wide range of complex investigation and white-collar defense matters at the federal, state and local levels He is experienced in defending complex investi-

gations and representing clients in highstakes litigation, and also advises clients on all aspects of corporate compliance

Coffey states that, “There is little doubt, among all of the other challenges in significant tax disputes and other cases, that setting expectations for clients as well as counsel and consultants stands out as a key and oftentimes difficult task There is little quest i o n , h o w e v e r, t h a t e f f o r t s t o e n s u r e t h a t everyone is seeing the matter in a similar way as the case unfolds are essential to success in the handling of difficult cases.”

Consider this hypothetical situation: An experienced team of attorneys and forensic accountants conducts a detailed investigat i o n a n d i d e n t i f i e s m i l l i o n s o f d o l l a r s i n d a m a g e s a s t h e r e s u l t o f f r a u d u l e n t a c t s T h e a c c o u n t a n t s p r o v i d e c r i t i c a l a n a l y s e s and expert opinion in a report submitted to the court The attorney argues a persuasive, f a c t - b a c k e d c a s e , a i d e d b y i n c i s i v e t e s t imony from the accountants The collective w o r k o f t h e i n v e s t i g a t i v e t e a m l e a d s t o a s u c c e s s f u l l a w s u i t a n d a w h o p p i n g j u d gment levied against the perpetrators

Cue the champagne because, by all definitions, this case is now successfully closed But wait; several months later, the client has had zero success in collecting on the judgment because the defendants have no assets But, they stole millions! How can this be?

The world’s greatest forensic investigation can be for naught with millions of dollars in legal and accounting fees spent, simply because the team failed to define success as “recovery of assets” from the beginning

Eric (“Rick”) S Rein, Esq is a partner at H o r w o o d M a rc u s & B e r k C h a r t e r e d , s p ec i a l i z i n g i n i n t e r n a t i o n a l a s s e t r e c o v e r y Rein concentrates his practice in multijurisdictional litigation, specifically the recovery of foreign claims and assets He is also well regarded for his knowledge of international legal systems and frequently serves as spe-

cial counsel to the financial services industry, corporations, attorneys, accountants, trustees, receivers and high-net-worth individuals. He explains that, “The key to any engagement is to accomplish a recovery Therefore, at the outset, one needs to determine if there can be a recovery, and what it would entail One also needs to communicate with the client as to what the client would consider to be a successful recovery in order to manage expectations ”

Inexperienced forensic accountants may often run up substantial fees without considering what assets are available for recovery, and wind up with a lesson they will never forget They need to consider recovery at every point along the way, regardless of the many twists and turns an investigation may take

I was fortunate to see this firsthand Years ago, I was asked to perform an investigation into an entity’s revenue recognition policies and procedures, specifically to identify any possible revenue overstatement The business owners (who were not management) were pursuing an initial public offering and sought an audit opinion from a large international CPA firm rather than the “super-regional” firm they’d used for years. The entity’s CFO quit unexpectedly the day before the big firm commenced fieldwork. As a result, the CPA firm backed away and insisted that an independent forensic accountant investigate allegations of potential revenue overstatement and the circumstances around the CFO’s sudden resignation. I met with the Csuite and began my investigation, defining success as verification of revenue and a plausible comfort level regarding the CFO’s departure.

Several weeks into my work, documents surfaced indicating that upper management was aware of material issues in the revenuerecognition function. Immediately, the entire course of the investigation changed and I was now investigating the people I’d been working with for weeks More details were uncovered that clearly d e m o n s t r a t e d u p p e r m a n a g e m e n t n o t o n l y h a d k n o w l e d g e o f material misstatements on the financial statements, but also had actively worked to suppress evidence in our investigation Success was now co-defined as “termination of management not acting in the entity’s best interest ”

This pa rtic ula r bus ine s s wa s e x tre me ly profita ble , whic h c e rtainly made me ask why it would inflate already stellar revenue The business owners cleaned house, and what I thought was going to be a rather discreet accounting project turned into a much larger and more complex investigation It was extremely fortunate that the attorneys and forensic accountants were seasoned professionals who were able to switch gears quickly, communicate with ownership effectively and not alert management to the change in course

Even if your success target changes throughout an investigation (which often happens), your team’s ability to effectively revisit and r e v i s e t h e w o r k p l a n w i l l h a v e t h e g r e a t e s t p o s i t i v e i m p a c t o n a c h i e v i n g s u c c e s s T h e i n h e r e n t a m b i g u i t i e s i n f o r e n s i c w o r k m a k e s d e v e l o p i n g a w o r k p l a n a c h a l l e n g e T h e r e f o r e , w h e n I approach projects, I often first look to the finish line or success target and reverse-engineer a course back to the start I remind my team to constantly ask themselves whether what they’re doing is moving things towards the success target or in another direction And I ask them to continue collaborating and communicating with the relevant parties throughout the project.

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N o t - S o - S e x y I n v e s t i n g

Trade tantalizing short-term predictions for long-term investing success

By Mark J Gilbert, CPA/PFS

It’s always in vogue for big-name investors and noted investment managers and financial planners to predict how the Dow and S & P 5 0 0 w i l l p e r f o r m f o r t h e y e a r, a n d which of their favorite stock picks and econ o m i c s e c t o r s w i l l b e t h e y e a r ’ s h o t t e s t players It’s so common, in fact, that many investors think investing is all about picking the best stocks or funds and selling or shunning everything else.

Instead, you need to stress investing for the long term, with an eye on personal goals, financial objectives and investment risk tolerance. This investment style may not be nearly as sexy, and it certainly doesn’t produce any notable sound bites, but it’s far more practical.

l a t e d U S a n d i n t e r n a t i o n a l s t o c k s a n d bonds to achieve strong portfolio diversific a t i o n , b u t t h i s i s p r o b a b l y t h e g r e a t e s t challenge in portfolio design today

Following the 2008 financial crisis and s t o c k m a r k e t c r a s h , t h e s e a s s e t s h a v e s h o w n a f r u s t r a t i n g t e n d e n c y t o m o v e i n sync with each other, with the sole except i o n b e i n g U S Tr e a s u r y n o t e s a n d b o n d s . T h a t s a i d , i n v e s t o r s a n d a n a l y s t s a r e i ncreasingly speaking of the “risk-on, risk-off” n a t u r e o f t h e s e c u r i t i e s m a r k e t s , w h e r e diversification seemingly means being all in the markets or on the sidelines in lowyielding government bonds.

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

1 3 yea r s in p er s ona l f ina ncia l p la nning An ICPAS member since 1982, M a r k c u r r e n t l y s e r v e s i n t h e I A / P F P M e m b e r Fo r u m G r o u p a n d o n t h e Structure & Volunteerism Committee.

* mgilbert@reasonfinancial com

Diversify, Diversify, Diversify

To

e r s f r e q u e n t l y f o l l o w u p t h e i r “ B e s t Stock of the Year” rants with a comment or two about diversifying assets But that part of the conversation usually gets lost.

So what does diversification really mean? Simply, it’s the process of simultaneously investing in a portfolio of different securities and asset classes at any given time, some of which may go up, while others go down This is by design, since, from day to day, month to month, quarter to quarter, and year to year, it’s virtually impossible to time the markets to successfully buy the bottoms and sell the tops Plus, it theoretically reduces the risk of sustained portfolio losses in the face of economic uncertainty and market distress brought about by unexpected natural disasters, geopolitical events, and the like

I d e a l l y, p o r t f o l i o d i v e r s i f i c a t i o n i s a c hieved by investing in a broad mix of stocks, bonds and alternative investments, like real estate or commodities (or funds that invest i n t h e s e s e c u r i t i e s ) w h o s e p r i c e s m o v e independently of each other A generation ago, it was easy to find non- or low-corre-

N e v e r t h e l e s s , a s t h e g l o b a l e c o n o m y slowly returns to measurable growth, I expect that correlations between various stock a n d b o n d a s s e t c l a s s e s w i l l o n c e a g a i n diverge, and the importance of a truly diversified portfolio will rise.

Realize the Risks

Risk tolerance is a key component of deciding how to diversify investments. Regardless of past performance or expected portf o l i o r e t u r n s , i n v e s t o r s h a v e t o c o n s i d e r how well they can stomach wild stock mark e t s w i n g s I n o t h e r w o r d s , w h a t i s a n investor’s tolerance for their holdings losing 10 or 20 percent or more? The answer is highly subjective Some people are simply r i s k - t a k e r s w h i l e o t h e r s a r e e n t i r e l y r i s kaverse, and only by understanding both the positive and negative risks can one prope r l y d e s i g n a p o r t f o l i o t h a t w i l l a l l o w a n investor to sleep well at night regardless of day-to-day market fluctuations.

Focus on a Financial Plan

Investment risk tolerance is only one aspect of portfolio design; you also have to focus on a plan. For example, an extremely riska v e r s e i n v e s t o r m a y u n w i t t i n g l y c r e a t e financial risks by limiting his or her portfo-

lio to overly conservative investments Let’s say a conservatively managed portfolio is e x p e c t e d t o p r o d u c e a 4 - p e rc e n t a n n u a l rate of return, yet it needs to earn 6-percent annually to meet the investor’s needs, then the selected portfolio design obviously isn’t appropriate The converse also may be true if a portfolio is set up to take unnecessary risks to earn a higher rate of return than is really needed

Investors need to start by quantifying their financial and lifestyle goals, and considering all anticipated future sources of income, like Social Security, pensions and d

investors can use these estimates to make informed decisions about where to invest

There’s no denying that picking securities that achieve excellent or at least reasonable returns is critical to successful investing But it’s not the only consideration Thinking about appropriate portfolio diversification, investment risk tolerance and the financial plan should also factor into every investor’s decision-making process

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Models for Recover y

Economic doom and gloom has given rise to today’s most compelling, cuttingedge models for business growth

By Carolyn Kmet

F a s t f o r w a r d f o u r y e a r s , and you have an award-winn i n g m a r k e t i n g a g e n c y t h a t d o e s a t l e a s t o n e p r o b o n o c a m p a i g n a y e a r f o r a n o nprofit, and maintains a client l i s t o f f i r m s “ t h a t h a v e a d m i r a b l e m i s s i o n s o f t h e i r own ” HERO|farm serves on t h e m a r k e t i n g b o a r d s o f t h e local Boy Scouts of America, M a rc h o f D i m e s a n d B i g B r o t h e r s B i g S i s t e r s , a m o n g m a n y m o r e A n d t h e c o mpany has done pro bono work for WRBH FM, the only fullt i m e r e a d i n g s e r v i c e f o r t h e blind and print handicapped on the FM dial in the United States, and the New Orleans M i s s i o n , t h e o l d e s t p r i v a t es e r v i c e p r o v i d e r f o r t h e homeless in the city HERO|farm and its mission of conscientious capitalism represent a new way of doing business and a profitable one at that

The economy’s downward spiral over the past few years has been a negative force felt by just about everyone But out of adversity ingenuity is born The rise of four business models in particular are a shining example of that.

1. Conscientious Capitalism

In 2008, the economy was spinning down the drain. In an effort to stay afloat, many companies were slicing budgets and dicing staff. Shaun Walker, a young ad man from New Orleans, was one among many who lost their jobs Undeterred, he partnered with an account manager friend and, in 2009, founded HERO|farm, an ad agency with a social mission: “To do great work, but also accomplish good for the world while doing it.”

“Since our founding, we have doubled our revenue every year,” Walker explains “When you add value to a person’s everyday life, you do more than just sell a product; you create a lasting relationship of goodwill and a connection that goes far beyond sell-buy-consume ”

In 2011, Rajendra Sisodia, David Wolfe and Jagdish Sheth studied firms such as Trader Joe’s, C a r M a x , We g m a n s a n d To y o t a , a n d d e t e rmined that companies that upheld the principles of conscientious capitalism outperformed t h e m a r k e t b y a 9 - t o - 1 r a t i o o v e r a 1 0 - y e a r period The authors present their findings in the book Firms of Endearment, published by Pearson Prentice Hall

A d d i t i o n a l l y, f r o m a c o n s u m e r s t a n d p o i n t , we see that more and more purchase decisions are being influenced by purpose over product.

Public relations firm Edelman recently issued the Goodpurpose study, canvassing 8,000 consumers in 16 countries According to the study, “social purpose” as a purchase trigger has risen 26 percent since 2008. These numbers are not easily dismissed

2. Subscription

T h e s u b s c r i p t i o n o r m e m b e r s h i p m o d e l i s another business model to have evolved out of a d o w n e c o n o m y. R a t h e r t h a n r e f e r r i n g t o newspapers and magazines, however, today’s subscription model allows consumers to subscribe to any number of products, from toothpaste to underwear

According to a 2011 Gartner study, subscript i o n c o m m e rc e w i l l g e n e r a t e r e v e n u e f o r 3 5 percent of the Fortune 2000 by 2015 One of the big players in this arena is New York-based OrderGroove, which raised $6 7 million in vent u r e c a p i t a l f i n a n c i n g l a s t N o v e m b e r O r d e rGroove enables retailers to launch subscription p r o g r a m s o n t h e i r s i t e , w i t h t h e o b j e c t i v e o f increasing total customer lifetime value, overall profitability and the frequency of customer purchases

“When merchants tap into the power of convenience, they turn new and existing customers into repeat buyers, which means higher recurring revenues, new data and analytics, increased purchasing rates and stronger brand loyalty,” explains Katie Shea, director of marketing for OrderGroove. “For consumers, it means time and money saved on frequently purchased products ”

To date, OrderGroove’s clients include wellknown retailers and brands such as CVS, L’Oreal, Grainger, Jockey and Teavana.

“In the past year, OrderGroove has experienced over 350-percent revenue growth while tripling its client roster,” Shea adds

Robbie Kellman Baxter, president of Peninsula Strategies, a Silicon Valley-based consulting firm with specific expertise in subscription m o d e l s , e x p l a i n s h o w n i m b l e c o m p a n i e s a r e using membership models to thrive

“Getting the model right and keeping it right can mean billions in terms of market valuation,” he says. “In the past, we’ve called it an annuity, and today we just call it recurring revenue But it has always been something that investors love because it guarantees future income ”

The subscription model has disrupted entire industries such as financial services, hard goods and even airlines Baxter attributes much of this g r o w t h t o m a j o r c h a n g e s i n t e c h n o l o g y a n

pany that sells ‘stuff’ and isn’t thinking about the implications of the membership economy runs the risk of being blindsided by new busi-

he explains

3. Social Influence

New business models are extending beyond the sales arena to revitalize the marketing industry as well Just take a look at Facebook, Twitter, YouTube and Pinterest all companies whose inventories con-

sist of user-generated content This amorphous, dynamic content drives the concept of social influence, which brands and retailers are eagerly striving to harness.

Social influence exists when one person broadcasts his or her opinion, either good or bad, about a life experience or interaction to their online social circle This opinion then influences the beliefs and actions of that person’s personal audi-

ence, which, when scaled to exponential levels, can move entire markets.

For example, in 2011 Target partnered with Italian designer Missoni to create a line of clothing and housewares The line w a s h e a v i l y p r o m o t e d v i a s o c i a l m e d i a , and it quickly went viral as excited fans tweeted and posted about the upcoming r e l e a s e . S o m u c h h y p e w a s g e n e r a t e d a r o u n d t h e n e w r e l e a s e t h r o u g h s o c i a l media that when the products were finally launched, the onslaught of traffic brought d o w n Ta rg e t ’ s w e b s i t e a n d s o l d o u t t h e entire line within hours, leaving many disa p p o i n t e d c o n s u m e r s a n d a s u b s e q u e n t social media backlash

Social media has evolved since then, and now more and more brands are learning how to use it to reach hundreds and thousands of potential customers in minutes.

“And it’s cost effective,” says Stephanie L i c h t e n s t e i n , p r e s i d e n t a n d f o u n d e r o f M i c r o M e d i a M a r k e t i n g , a s o c i a l m e d i a m a n a g e m e n t a g e n c y. “ Yo u c a n u s e i t t o d r i v e t r a f f i c , s h a r e i m p o r t a n t a n n o u n c em e n t s , l a u n c h s p e c i a l p r o m o t i o n s , improv e c us tome r s e rv ic e , c rowds ourc e , and more ”

W h a t ’ s s o i n t e r e s t i n g a b o u t t h e s o c i a l media marketing model is that size doesn’t matter. Large companies, small companies and independent business owners are able t o p a r t i c i p a t e S o c i a l m e d i a l e v e l s t h e playing field for these smaller businesses to compete with larger, more established b r a n d s . A n d s m a l l b u s i n e s s e s h a v e c e rtainly taken advantage of that According t o L i c h t e n s t e i n , i n 2 0 0 7 F a c e b o o k h a d 1 0 0 , 0 0 0 b u s i n e s s p a g e s , w h i c h , b a c k then, were known as groups By 2012, that number had grown to a whopping 42 million pages.

“ T h e s o c i a l m e d i a c h a n n e l i s u n i q u e be c a us e the opportunitie s for a bus ine s s are endless You can spend the entire day on Twitter interacting with people on specific keywords related to your business in real time. You can find people looking for your business or service that are geographically in your area,” says Lichtenstein

As such, businesses need to recognize social media as part of their daily marketing and communications agendas. “It’s just like opening your door, replying to your e m a i l s , a n s w e r i n g y o u r p h o n e S o c i a l media is just as important as those activities, if not more so, because it takes place i n t h e p u b l i c a r e n a . I f y o u r e p l y, i f y o u don’t reply, your actions are seen by others,” she says

4. Performance Marketing

formance marketing, which is also known as affiliate marketing, refers to online marketing and advertising programs in which ad rates are paid out only after a consumer completes a transaction. That transaction could be a completed purchase, or even a submitted sales inquiry

“In performance marketing, advertisers and marketers only pay for successful transactions,” explains Rebecca Madigan, executive director of the Performance Marketing Association. “The trackability of performance marketing isn’t based on estimates but on actual results, meaning that a marketing program’s effectiveness is accurately determined, down to the mouse click.”

Often, performance-based ads are called “recession-proof,” because the ad rates aren’t based on speculation, but on actual sales “Performance-based ad rates are typically set as a percentage of the sale, so the performance marketer isn’t paid unless a sale is made, and the advertiser doesn’t pay for the ad until after the transaction There’s no up-front cost,” Madigan explains

However, there are some potential tax c o n c e r n s a s s o c i a t e d w i t h t h i s p a r t i c u l a r m o d e l “ F o r r e t a i l e r s w i t h p e r f o r m a n c e marketing programs, there may be some sales tax collection implications in states where the retailers aren’t physically located,” Madigan warns To date, nine states have passed laws that say if retailers are running performance-based ads on webs i t e s o w n e d b y t h i r d - p a r t y w e b s i t e s o r c o m p a n i e s l o c a t e d i n t h o s e n i n e s t a t e s , then those third parties constitute a physical nexus and therefore the retailer must collect sales tax for that state

“ T h e U S C o n s t i t u t i o n s a y s t h a t a s t a t e can’t require a retailer to collect its sales tax unless the retailer has a physical prese n c e i n t h e s t a t e , t y p i c a l l y d e f i n e d a s a store or sales force,” says Madigan “Howe v e r, f e d e r a l l e g i s l a t i o n i s p e n d i n g t h a t would reform sales tax laws, requiring all r e t a i l e r s t o c o l l e c t s a l e s t a x i n a l l s t a t e s , whether or not they have a physical presence in the state.” Madigan believes this legislation will pass this year

D e s p i t e t h e l e g i s l a t i v e u n c e r t a i n t y, Madigan feels that the performance-marketing model will persevere “It will begin t o d o m i n a t e a d b u d g e t s , a s c o s t - m i n d e d CEOs take the lead from advertising giants like Proctor & Gamble, and shun ad campaigns that can’t be measured ”

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CFO Hunting

Three strategies for nonprofits in search of the perfect executive hire

By Chuck Green

Back in 2005, The Bridgespan Group published The Nonprofit Sector’s Leadership Deficit, which suggested the single greatest organizational weakness nonprofits faced was leadership development and succession planning for senior leadership positions It also found that nonprofit organizations promoted from within with far less frequency than for-profits, typically sourcing 30 to 40 percent of senior leaders through internal promotion versus 60 to 65 percent in the for-profit sector Bridgespan’s analysis estimated that by 2016 nonprofits would need more than half a million new senior managers as the sector continued to expand and Baby Boomer leaders retired

Eight years on, all indications are that Bridgespan’s report was on the mark In the world of nonprofits, where budgets can be hideously,

almost paralyzingly constraining, mining for candidates to assume high-level finance positions such as CFO and controller remains hard work, to put it mildly

Here, then, are three budget-conscious strategies that make use of resources easily within a nonprofit’s reach.

1. The Boardroom & Beyond

“ B o a r d s o f d i r e c t o r s a r e a p o t e n t i a l l y r i c h source of connections to financial and accounting talent, as are a nonprofit’s corporate sponsors and donors, who are keyed into alumnus from their own organizations who are between opportunities,“ explains Jim Wong, founder of Chicago financial and accounting recruitment firm ClearFocus Financial Search

Ironically, though, these sources “are the most overlooked sources of networking for nonprofits. Despite the fact that they’re already connected to the organization and its mission, the hiring manager, CEO or COO that’s helping to fill the position of CFO or controller doesn’t necessarily think, ‘Hey, send it to our board’ or ‘Send it to our volunteers; they might have good suggestions,’“ says Heather Eddy, president and CEO of Alford Group Executive Search in Chicago. “So there’s a lot of networking that nonprofits could and should be doing that they typically don’t They don’t necessarily think they can proactively leverage their own networks “

A d v i s o r s t o n o n p r o f i t s , s u c h a s b a n k s a n d legal practices, also make quality partners in the search process “These types of businesses have a vested interest in ensuring a qualified candidate is recruited and hired for the posit i o n , “ o b s e r v e s R e n e e B e c k m a n , c o - f o u n d e r a n d s e n i o r p a r t n e r a t M a rc o & A s s o c i a t e s i n Chicago, specializing in financial and accounting recruitment.

“No audit firm wants to work with an organi z a t i o n t h a t l a c k s a q u a l i f i e d C F O / f i n a n c i a l leader,“ adds Eddy “They want solid, top leadership involved in the process “

2. LinkedIn

Beyond the boardroom and volunteer/donor pool, LinkedIn can be a very productive next destination, says Beckman “Think about the n u m b e r o f p e o p l e y o u c a n r e a c h i n s t a n t aneously with InMail on LinkedIn; it’s quite r e m a r k a b l e , “ s h e s a y s A n d , i n f a c t , i n i t s m o s t r e c e n t s u r v e y, C l e a r F o c u s F i n a n c i a l S e a rc h f o u n d t h a t t h e m a j o r i t y o f r e s p o ndents trusted LinkedIn as a valued research site for top talent

But there’s a caveat. “Just saying, ‘We’re looking for a CFO’ could take an organization in 100 different directions And just because someone was a CFO elsewhere doesn’t mean they’re the right fit for your organization,“ explains Marilyn Bird, Chicago district president of Robert Half International “Therefore, knowing what you are as an organization and what you’re looking for, not to mention the ability to clearly articulate it, will help to draw better candidates more quickly “ Otherwise, you’re opening yourself up to an application free for all

3. Interim Pros

For nonprofits intent on finding just the right person for the job, but without the luxury of time to conduct their in-depth search, an interim CFO or controller may be the way to go. This strategy allows you to “try before you buy,“ in a manner of speaking.

“ M o r e a n d m o r e c o m p a n i e s l o v e t h a t option just because they get to know each other better and can make sure they’re the right fit for one another So many times these decisions are made and it’s more about the fit of the culture to the candidate rather than just the skill set,“ says Bird “ O f t e n , t h i s s t r a t e g y w o r k s o u t w e l l f o r companies,“ adds Beckman “Using an interi m c o n s u l t a n t a l l o w s a n o rg a n i z a t i o n t o s p r e a d t h e c o s t o f a r e c r u i t i n g f e e o v e r a p e r i o d o f t i m e t h a t t h e y o t h e r w i s e w o u l d have to pay up front.“

But, again, there is a caveat “Deciding to onboard an executive-level consultant as a possible future hire at times can be tricky,“ Beckman notes. “The success of this strategy relies heavily on the organization’s leadership team in how they empower the consultant. It is critical to send the message to staff that this individual is backed 100 percent by management to implement change or spearhead initiatives.“

Is there a perfect solution? Unfortunately not But there are methods budget-stretched nonprofits can use to spread the word and gain access to skilled and much sought-after candidates

Friday, May 31, 2013

Chicago, IL

Featuring keynote presentation:

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Understanding Authentic Leadership

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Big Business Illinois

The state is working hard to make itself evermore attractive to businesses far and wide

By Selena Chavis

Job growth in Illinois is moving in a positive direction Unemployment figures are improving Things, it seems, are looking up, at least Dan Seals, assistant director at the Illinois Department of Commerce and Economic Opportunity (DCEO), thinks so He eagerly quotes unemployment numbers that have moved from 11 percent to roughly 8 7 percent (as of mid-February) and the addition of 160,000 jobs since 2010

Building off this momentum, Seals says that a number of initiatives are in the works to attract more jobs and new business to the state Rather than focusing on a specific industry or company, the DCEO’s philosophy is “to strengthen the ecosystem that creates the jobs,” he says

Groundwork for Growth

With this goal in mind, the state has committed $43 billion to strengthen its infrastructure, including everything from the introduction of highspeed rail to clean water and broadband expansion

“We’re at the crossroads of the country,” says Seals. “When infrastructures that support such things as travel aren’t up to snuff, the business climate suffers ”

Illinois celebrated the introduction of its 110-mph rail service last O c t o b e r, a n h i s t o r i c s t e p t o w a r d s securing the state’s position as the Midwest’s transportation hub Part o f a $ 2 - b i l l i o n f e d e r a l a n d s t a t e investment, the rail project created a n d s u p p o r t e d m o r e t h a n 6 , 0 0 0 construction jobs, as well as jobs r e l a t e d t o p r o d u c t i o n a n d e q u i pment manufacturing

Governor Quinn explained that, “A 21st century rail system in Illinois will create jobs and drive economic development throughout the

M i d w e s t , w h i l e m a k i n g t r a v e l a c r o s s I l l i n o i s faster, safer and more reliable ”

Support for Innovation

According to Seals, a number of initiatives are u n d e r w a y t o “ h e l p t o a c c e l e r a t e t h e p a c e o f innovation” and create a climate supportive of entrepreneurial growth. The state has partnered with Argonne National Laboratory, for example, to bring a new research facility to Illinois to create the next-generation battery over the next five years a battery that is five times cheaper and will last five times longer than current market competitors

What’s more, a public-private partnership with the University of Illinois and the National Center for Supercomputing Applications (NCSA) will position the state well in the manufacturing sector, says Seals, by bringing together large and small companies to learn about and use some of the world’s most sophisticated tools and software. The NCSA is home to one of the nation’s most powerful collections of supercomputers

The state also has helped to create 1871, a coworking center for digital startups Located in Chicago’s well-known Merchandise Mart, the center is already home to more than 200 startups In fact, Chicago’s technology community helped the city make Startup Genome’s latest top 10 analysis of entrepreneurial hotspots

Focusing on Exports

According to Seals, the state has made a pledge to double exports by the end of 2014 Statistics reveal that notable inroads have already been m a d e i n r e a c h i n g t h i s g o a l I n 2 0 0 9 , I l l i n o i s recorded $41 63 billion in exports, which grew to $50.06 billion in 2010, representing a 20.26 percent increase In 2011, exports grew by 29 5 p e rc e n t t o $ 6 4 . 8 2 b i l l i o n , n e a r l y d o u b l e t h e average U S growth rate of 16 percent

“There’s been a big push to educate small and midsized businesses on how to export,” Seals explains, “and the state also has been able to subsidize the cost for businesses to participate in trade missions to strengthen bilateral cooper-

A

The Illinois CPA Society

Timothy Abbott

Sameer Abdulhadi

Mathai Abraham

Mohammed Abufarha

James Adams

Jeremy Adams

Brian Adamson

Wade Adamson

Weston Adcock

Adesoji Adeboye

Eyiwumitoluwafif Adeloye

Olabisi Adesida

Kayode Adetayo

Katie Adler

Mariana Aguilar

Brendan Ahern

Gavin Ahern

Seong Ahn

Andrea Aimi

Eric Aintabi

Okezie Akandu

Elmira Akhmetova

Sayyed Farooq Akhtar

Mizuho Akiyama

Antonia Aladjova

Eyad Albayouk

Lindsay Albert

Angelica Alday

Elaine Alexander

Jeffrey Alexander

Kolawole Alimi

Abeer Alkhatib

Charles Allen

Christopher Allen

Christopher D. Allen

Jeffery Alton

Jose Alvarez

Evaldas Ambrazaitis

Joshua Ampil

Brett Anderson

Erik Anderson

Mark Anderson

Max Anderson

Nicole Anderson

Ryan Anderson

Sarah Anderson

Ema Ando

Daniel Anelli

Megan Angle

Molly Antell

Joseph Antonacci

Daniel Apel

Craig Apgar

Michael Aplington

Antoinette Aquino

Nuzahat Ara

Yoshimitsu Arahata

Ramzi Arbid

Aristotelis Archos

Faidat Aremu

Bradley Armour

Jonathan Aronstam

Emily Asmuth

Sara Atchison

Nsikak Attang

Samuel Aul

Tyann Austin

Jorge Avila

Kristin Ayres

James Azriel

BSruthy Babu

Tracey Babula

Melissa Baeza

Soroush Bahmanyar

Michael Bahng

Yunfei Bai

Andrew Baibak

Autumn Bailey

Robert Baker

Linda Bakhshian

Allison Baldwin

William Baldwin

Rutchelle Ballesil

Alina Bancescu

Adam Bandeali

Sarah Bandukda

Melissa Bang

David Bansley

Yuanyuan Bao

Allison Baranick

Kristine Barchard

Meghan Barlow

Mollie Barouh

Leah Barry

Ashley Barsema

Brian Bartels

Gregory Bartholomew

Ashley Barton

Michelle Bartosik

Muhammad Basathia

John Bateman

Lillian Bauer

Whitney Beaver

Eric Beck

Lindsay Becker

Bryan Beckner

Malgorzata Bednarz

Bradley Beebe

Gregory Beeler

Paul Beery

Heather Begley

Lior Bela

Emily Bell

Rowen Bell

Daniel Bender

Robert Benedict

Jordan Benson

Whitney Bercek

Stephen Berenson

Jason Berg

Maxwell Bernard

Ross Bernardi

Victor Bernardi

Gregory Bernert

John Bernier

Dustin Bernstein

Aaron Bernstetter

Christine Berry

Michael Berry

Bradley Berthold

Dale Beutel

Ektaa Bhatia

Imran Bhatty

Nicholas Bialorucki

Kara Biasca

Dustin Bishop

Thomas Bishop

Tim Bissaillon

Sean Black

Daniel Blackburn

Ryan Blackburn

Joel Blaies

Lauren Blaies

Justin Blanchet

Denisa Blass

Kathryn Blonn

Lindsay Board

Nicole Bobowski

Clint Bodilly

Rebekah Boeckman

Ivo Boev

Kristen Bogdanowicz

Gabriela Boldan

Brian Bollinger

Maria Boncza-Skrzy-

necki

Cesar Bonilla

Paulina Boonman

Geoffrey Boosey

Elizabeth Boothby

Brett Bork

David Bos

Serge Arthur

Bossogueno Nana

Alan Bouchier-Hayes

Alexandra Bowes

Cara Bowling

Cody Bowman

Joshua Bowser

Margaret Boyich

Martin Boyle

Thomas Boynton

Nicole Brackert

Paige Bradshaw

Tyler Brady

Kierstin Brandt

Garrett Branisel

Mitchell Brann

Larry Brannon

Jennifer Braswell

Caroline Braunstein

Paula Braxton

Aaron Breen

Nathan Breier

Benjamin Bremen

Becky Brennan

Sarah Brett

Russell Brewer

Ryan Brickl

Alexander Brickner

Mark Briden

Evan Brothers

Andrew Broucek

Michael Browder

Claire Brown

Jillian Brown

Lyndsay Brown

Michael Brown

Tiffany Brown

John Brozyna

Jeremy Bruck

Arielle Bryant

Melissa Buck

Kevin Bufalino

Patrycja Bukowski

Joshua Bullock

Michael Buoniconti

Eldron Burbridge

Jaclyn Burke

Daniel Burns

Laura Burns

Louis Butryn

Claire Byrne

Jon Bzdawka

C

Catherine Cahill

Molly Cain

Liliana Calderon

Zachary Caldwell

Christopher Callahan

Jason Callow

Colin Campbell

Brianne Canova

Zuoxin Cao

Meaghan Caragher

Rosa Carrillo

Jessica Carroll

Steven Carroll

Michael Cavanaugh

Robert Cerle

Oksana Chaban

Andy Chan

Dennis Chan

Iris Chan

Judy Chan

Katie Chan

Lillian Chan

Nicholas Chan

Roneel Chand

Deanna Chang

Jennifer Chang

Shelly Yih-Wen Chang

Nicholas Chapleau

Mei Ki Chau

Wallace Chau

Cen Chen Congyuan Chen

Joyce Chen

Jueqing Chen

Jun Chen

Lang Chen

Ming Ming Chen

Sammi Chen

Stephanie Xiao Chen

Szu-Ying Chen

Xinqin Chen

Xue Yin Chen

Yue Chen

YunTzu Chen

Zhiqin Chen

Zhiyan Chen

Jie Cheng

Vincent Cheng

Vincent Chevalier

Bryan Cheverud

Joseph Chiczewski

Yen-Lin Chien

Bill Chiu

Yen Hua Chiu

Hyun Cho

Hong Sun Choi

Juliana Choi

Vladislava Choneva

Rajeev Chopra

Katy See Kei Chow

Bryan Christoff

Yiou-Lun Chuang

Cindy Chung

Tyler Churchward

Luigi Ciardelli

Jeanette Ciccone

Daniel Ciecierski

Katarzyna Cios

Victoria Cisek

Christine Cisneros

Colleen Clark

Greyser Clark

James Clark

Jason Clark

Kevin Clark

Thomas Clarke

Georgina Clarkson

Megan Clayton

Stephen Co

Anil Cobo

Alexandra Cochran

Krista Coffey

Chase Coffin

Sean Cogan

Ian Cole

Jatana Coleman

Ryan Coli

Ryan Collins

Carl Comstock

Phillip Conforti

Ryan Connery

Joshua Contant

Kristen Contos

Carey Cookus

Kelsey Cooper

Brian Copsey

Kyle Corcoran

Veronica Cordova

Eric Corn

Lisa Corona

Diana Corral

Marcy Cox

Eric Crabbe

Tiffany Crawley

Nadejda Craye

Charles Crookshank

Kevin Crotteau

Patrick Crowley

Aaron Cruz

Alyssa Cruz

Wenjin Cui

Katherine Culhane

Joseph Cunningham

Gerald Curran

Trevor Currie

Stacy Curry

Jordan Cutler

Catherine Cygan

Mateusz Cyran

Maria Czepiel

Robert Czupryna

D

Kolade Dada

Anna Dai

Anand Dalal

Peter Darch

Alexander Dardi

Kuntal Das

Kateryna Daufeldt

Christopher Daugherty

Laura Davidson

Joshua Davis

Kathleen Davis

Tiffany Davis

Nicholas De Jong

Allison Dean

Christine DeCicco

Lawson Dees

Andrew Deferville

Dawn Degand

Alex Delamar

Kyle DeMus

Luis Depetris

Vincent DeSapio

Cynthia Descamps

Charles Deutch

Chhavi Devgun

Manpreet Dhillon

Jessica DiCesare

Halle Dichoza

Bryan Diehl

Christina Diles

Jessica DiMeo

Jacob Dively

Hamid Djebelli

Christina Doan

Kelsey Doherty

Adam Domanico

Adam Donahoe

Shane Donaldson

Brian Donenberg

Daniel Donlon

Mark Donovan

Michelle Donovan

Brian Doorn

Chanel Doree

Alireza Dorestani

Lauren Doser

Scott Doty

Ming Dou

Genetta Douglas

Elizabeth Dousias

James Dowd

Tonya Downard

Jeffrey Downs

Ryan Downs

Nathan Doyle

Timothy Doyle

Nicholas Draus

Stephen Drolet

Melissa Drumsta

Lin Du

Maryna Dubinina

Allan Dudkiewicz

Sam Duehr

Jennifer Duffett

Patrick Duffner

SyamaladeviPrasa

Duggirala

Jayana Dulla

Scott Durco

Stephanie Durkin

Daniel Dvorak

Austin Dwyer

Jo Anne Dy

Neal Dyer

Artur Dzierzanowski

Robert Dzike

E

Jared Eischeid

Hesham El Shaboury

Manissha Elavia

Matthew Elberts

Douglas Eldridge

Curtis Ellergodt

Kevin Ellsworth

Kimberly Elsey

Isimeme Emafor

John Enders

Jeremy Enuson

Peter Enyart

Matthew Erker

Alison Erskine

Bronson Eshleman

Pasquale Esposito

Ashley Estoque

Andrea Etienne

Matthew Etter

George Evangelou

Daniel Eveloff

Angela Evenhouse

F

Timothy Fagan

Christopher Fallon

Hong Fan

Yanrong Fan

Huijia Fang

Lucas Farrell

Maura Farrell

Jennifer Fassbinder

Megan Faulkner

Daniel Favela

Syed Fawwad

Jason Feldgreber

Brandon Fellows

Shana Felman

Mira Fendy

Jiyuan Feng

Brydon Ferguson

Douglas Ferguson

James Ferm

Phyllis Ferrera

Ryan Ferros

Michael Feuerstein

Tiffany Finke

Jennifer Finn

Craig Fiorito

Kelsey Firszt

Robin Fishbein

Brent Fisher

Ellen Fisher

Katherine Fisher

Daniel Fishman

Scott Fitzpatrick

Alison Flener

Frank Flesch

Jordan Flicher

Jacob Flori

Robert Flux

Stephen Earnhardt

Christopher Easton

Kenneth Eberhardt

Zamreen Ebrahim

Justin Eddington

Roxanne Edralin

Mark Edwards

Jonathan Eessalu

Richard Egert

Christopher Ehas

Jeffrey Eichinger

Christine Folliard

Laura Foltz

Fonny Fong

Scott Forbes

Jason Forlenzo

Nicole Fosburg

Rebecca Foster

Daniel Fox

Sean Fox

Deborah Francis

Kevin Frank

THE FOLLOWING INDIVIDUALS WHO EARNED THEIR CPA CERTIFICATE IN 2012.

CERTIFICATE RECIPIENTS

Simon Trottier

Kathryn Trowitch

Jay Trudell

Tommy Truong

Lisandro Tsai

Ktisifon Tselentis

Pai Chi Tsui

Vivian Wing-Man Tsui

Kevin Tunney

Nicole Turosky

Simina Tyiran

Robert Tyse

Anthony Tzemopoulos

Simeon Tzolov U

Greg Udouj

Joseph Umhoefer

Colin Umphreys

Adam Underwood

Michael Untiedt

Saurabh Upadhyay

Bolor Urjinee

Kyle Urtel

Hiromi-anne Usui

Caroline Uy

Victor Uy

V

Murtaza Valika

George Valsa

Genevieve Van Domelen

Todd Van Hoy

Lauren VanBlaricum

Kelly VanDeKreeke

Chad Vangsness

Ann VanVooren

Courtney Vargas

Bradley Veeck

Blake Veldhuis

Anna Marie Verch

Kristen Vercruysse

Manoj Verma

Matthew Vertin

Nicholas Vicino

Daniel Villegas

Sandra Villegas

Ryan Vincent

Adam Vitek

Mary Ann Vittitow

Tsveta Vlaeva

Sarah Vogt

Kathleen Volkert

Ben Volpe

Andrew Volz

Branislav Vucen

W

Robert Wadsworth

Matthew Waggoner

Cheryl Wagner

Amy Wake

Amanda Walker

Cameron Walker

Erin Walton

Annie Wang

Bo Wang

Lijuan Wang

Liping Wang

Qingying Wang

Ruirui Wang

Victor Wang

Xian Wang

Xiaofeng Wang

Ying Wang

Yixing Wang

Yu Jia Wang

Yuan-Ling Wang

Christine Ward

Daniel Ward

Thomas Wasilowski

Marc Wasserman

Robert Waz

Jodie Wehner

Guang Wei

Jia Wei

Yu-Shiun Wei

Jacob Weinberg

Blake Weisbrod

Thomas Welch

Belinda Wen

Byron Wendte

Zachary Wensch

Christian West

Gregory Westbay

Warren Wetter

Matthew White

Ryan White

Brian Whitfield

Ashley Wikle

Alissa Wilkerson

Meghan Wilkosz

Janet Willoughby

Ashley Wilson

Caitlin Wilson

Cassie Wilson

Michelle Winkleman

Katrina Winogradzki

Madeline Winter

Kasia Wiska

Megan Wisniewski

Kevin Wittmeyer

Meghan Woelfel

Brandon Wolber

Brianne Wolf

James Wong

Nancy Wong

Kirk Wonio

Brian Woo

Ella Wood

Daniel Woodall

Elizabeth Woodson

Heather Woolfitt

Stuart Wright

Andrew Edward Wu

Chia-Hsin Wu

Chuyen Wu

Hsin-Fang Wu

Ting Wu

Xinyi Wu

Yanfang Wu

Yanfei Wu

Yuping Wu

Zhenyu Wu

Joshua Wyrick

Daniel Wywrot

X

Jing Xia

Furong Xiang

Rufen Xiao

Youfei Xiao

Lu Xie

Yanna Xie

Ersu Xu

Li Xu

Shelley Xu

Shixiao Xu

Shiying Xu

Yuan Xu

Zengsan Xu

Y

Shuhei Yamaguchi

Yumi Yanagita

Eve Yanaki

Bin Yang

Ju Yang

Lin Yang

Qida Yang

YueYang Yang

Diki Yangzom

Xi Hong Yao

Samuel Yau

Richard Yeh

Chiahsuan Yen

Brian Yoder

Jeremy Yoder

Youngjae Yoo

Yu Yoon

Brian Young

Joshua Young

Stephen Young

Steven Young

Ya-Hsin Yu

Yi Yuan

Keith Kai Ho Yuen

Z

Adam Zaabel

Jeffrey Zabor

Gregory Zagar

Timothy Zakrzewski

Brent Zavitz

Robert Zeman

Si Zeng

ILLINOIS CPA SOCIETY 2012 EXCEL AWARD RECIPIENTS

Krista Zessin

Sida Zhai

Cailiang Zhang

Jie Zhang

Jinjing Zhang

Ke Zhang

Ling Zhang

Mengya Zhang

Qingsu Zhang

Rong Zhang

Tongying Zhang

Wenfei Zhang

Wenting Zhang

Xiaokang Zhang

Xiaorui Zhang

Yangchun Zhang

Ying Zhang

Yuhong Zhang

Ziling Zhang

Ling Zhou

Min Zhou

Jiang Zhu

Shengdong Zhu

Wansheng Zhu

Wenye Zhu

Andrew Ziegler

Justin Zieman

Steven Zienty

Mariola Zoltowski

Ephraim Zucker

The Excel Award is granted to Illinois CPAs who achieved a total average score of 90 or more and completed all four parts of the exam within two consecutive testing windows and were in the top five percent of the scores of those who completed all the requirements in 2012 in Illlinois.

ICPAS GOLD MEDAL RECIPIENT

Blake Applegate

Indiana University, Bloomington, IN KPMG LLP, Chicago, IL

ICPAS SILVER MEDAL RECIPIENT

Juliet Palko

University of Notre Dame, South Bend, IN Deloitte, Chicago, IL

Xiaomin Wang

University of Notre Dame, South Bend, IN

EXCEL AWARD RECIPIENTS

ICPAS BRONZE MEDAL RECIPIENT

Qinyu Zhang

University of Iowa, Iowa City, IA PricewaterhouseCoopers, Chicago, IL

Katherine Davidson

University of Illinois, Urbana-Champaign, IL

Ernst & Young LLP, Chicago, IL

Cole Fisher

Northern Illinois University, Dekalb, IL

Deloitte, Chicago, IL

John Goedert

University of Notre Dame, South Bend, IN

J.P. Morgan, Chicago, IL

Katherine Hagen

DePaul University, Chicago, IL

Ernst & Young LLP, Chicago, IL

Sophie Hillman

University of Wisconsin-Madison, Madison, WI

Ernst & Young LLP, Chicago, IL

Maxx Paez

University of Notre Dame, South Bend, IN PricewaterhouseCoopers, Chicago, IL

Tyler Replogle

Indiana University, Bloomington, IN KPMG LLP, Chicago, IL

Keith Reynolds Villanova University, Villanova, PA

AbbVie Inc., North Chicago, IL

John Smits

University of Wisconsin-Madison, Madison, WI Deloitte, Chicago, IL

Alexandra Sparkman

Miami University, Oxford, OH

Ernst & Young LLP, Chicago, IL

Craig Tessiatore Boston College, Chestnut Hill, MA KPMG LLP, Chicago, IL

Brandon Twite

Indiana University, Bloomington, IN

Deloitte, Chicago, IL

Mitchell Ulman

University of Florida, Gainsville, FL

Wells Fargo Securities LLC, Charlotte, NC

Zhao Wang

University of Illinois, Urbana-Champaign, IL

Andi Wu

University of Notre Dame, South Bend, IN

Ernst & Young LLP, Chicago, IL

Ruixue Yao

University of Illinois, Urbana-Champaign, IL

ation in manufacturing, agriculture, biotechnology and education. The hope is that the end result provides small to midsized businesses with access to some of the world’s fastest-growing markets.”

The effort is backed by a $1.07 million federal grant through the U.S. Small Business Administration’s State Trade and Export Prom o t i o n P r o g r a m ( S T E P ) A t h r e e - y e a r p i l o t i n i t i a t i v e , f u n d i n g i s being used to raise export sales in Illinois by providing high-impact financial and technical assistance to more than 150 companies

Illinois Pathways Initiative

This initiative was born of a need to address a skills gap that had e m e rg e d i n t h e s t a t e F u n d e d t h r o u g h f e d e r a l R a c e t o t h e To p f u n d s , t h e e f f o r t w i l l h e l p t o p r e p a r e s t u d e n t s f o r c o l l e g e a n d careers in new and growing fields

“The Initiative provides for strong collaboration in Illinois’ business and education communities,” says Jeff Mays, president of the Illinois Business Roundtable. “The whole idea is that you align your resources. By education collaborating with real-world busin e s s , s t u d e n t s l e a r n r e a l - w o r l d p r o b l e m - s o l v i n g s k i l l s T h e y ’ r e going to be aware of the careers available to them and what they have to do to get them ”

Current research reveals that of 100 kids entering the 9th grade, only 42 will enter college, and only 20 will graduate Pathways hopes to help the state reach its goal of having 60 percent of adults attain a college degree or a career certificate by 2025

Advantage Illinois

C a p i t a l i s k e y t o t h e s u c c e s s o f e v e r y b u s i n e s s v e n t u r e T h e Advantage Illinois program therefore was created specifically to a d d r e s s t h e n e e d f o r c a p i t a l a m o n g s t a r t - u p s a n d c o m p a n i e s looking to expand.

“We will work with local banks to do vetting of businesses needing loans If a bank can only lend a certain amount, we will augment it,” says Seals “It’s targeting those folks who are on the fence, who have trouble getting resources to grow ”

The program is leveraging $78 million in federal funding to support innovative ideas and new products, and to accelerate job creation and economic growth Three program components are intended to spur institutional lending, and one program leverages private venture capital in start-ups and high-growth businesses. Specifically,

n The Capital Access Program (CAP) encourages financial institutions to make loans to small and new businesses that don’t qualify under conventional lending policies

n T h e P a r t i c i p a t i o n L o a n P r o g r a m ( P L P ) s u p p o r t s b u s i n e s s e s w i t h p r o j e c t s t h a t c r e a t e o r r e t a i n j o b s a n d / o r m o d e r n i z e practices to improve competitiveness Specifically, one comp o n e n t o f t h e p r o g r a m i s d e v o t e d t o m i n o r i t y / w o m e n / d i sabled/veteran-owned businesses (MWDV PLP)

n T h e C o l l a t e r a l S u p p o r t P r o g r a m ( C S P ) e s t a b l i s h e s s a v i n g s accounts or CDs to provide cash collateral support to lending institutions to enhance the equity and/or loan collateral levels of small-business borrowers

n The Invest Illinois Venture Fund Program (IIVF) is a new venture capital program to support young, innovative companies that show high-growth potential, can demonstrate their place in the market and already have other investors

Illinois’ dynamic business community promises to continue on its fruitful path as the national economy gains momentum and we begin to see a glimmer among the clouds.

Providing timely, relevant updates from leading experts.

May 9 | Chicago

Est ate & Gif t Tax

May 13 | Oakbrook Terrace

May 14 | Springfield

Government

May 21 | Chicago

Em ployee Benefits

May 22 | Chicago

Business Valuation Sym posium

June 4 | Chicago

Taxation on Real Est ate

June 5 | Chicago

Fundraising Rules and Regulations

June 11 | Springfield

June 12 | Chicago

Half-Day

Not-for-Profit Advanced and Emerging

Accounting and A-133 Issues

June 20 | Chicago

Forensic Accounting Workshop

July 18 | Chicago

July 23 | Springfield

IRS Practice & Procedures

Gripping the Edge

What do 2013’s tax law changes really mean to the nation’s small-business owners?

By Kristine Blenkhorn Rodriguez

Significant revenue provisions of The Patient Protection and Affordable Care Act, enacted in March 2010, became effective January 1, 2013, concurrent with the American Taxpayer Protection Act of 2012, enacted on January 2, 2013. The result is a changed tax environment not only for the high-net-worth taxpayers who have emblazoned “Fiscal Cliff” headlines, but also for the nation’s small-business owners.

Here, we recap on five changes that impact small-business tax planning in 2013

1. Stock

If you’re working with small-business corporations with less than $50 million in assets, read the tax law changes for Section 1202 with care, cautions Jeremy Dubow of NDH Group

“There is one aspect of the law that few people have captured appropriately,” he explains “ B u t i n

equity financial investment dollars are funneling into tech companies focused on innovation, this is a key piece of the Fiscal Cliff legislation.”

From October 2010 through December 31, 2011, Section 1202 excluded 100 percent of the gain realized from the sale of investment in a small-business corporation, if it met certain criteria (namely, if investors hold stock for five y e a r s o r m o r e ) . I t a l l o w e d f o r t a x - e x e m p t investment for the greater of up to $10 million or an amount equal to 10 times your basis in the stock. After December 31, 2011, the 1202 provision went back to its original form, so only 50 percent of the gain was excluded; the other 50 percent was taxed at a flat 28 percent. An AMT adjustment was also added

T h e 2 0 1 3 l a w c h a n g e d t h e 2 0 1 2 r u l e s r e t r o a c t i v e l y. C o n s e q u e n t l y, t h e 1 0 0 - p e rc e n t exclusion applies from October 2010 through December 31, 2013, providing a huge tax benefit for many Chicago-area tech investors

It all sounds quite simple until you figure in the conversion of a young start-up into a corpo-

ration, says Dubow. “The implication is a bit buried in the law, and even some of the larger law and CPA firms have not paid attention to it ”

M a ny s ta rt-ups orig ina te a s s ta te la w L L C s a n d t h e n a r e c o n v e r t e d i n t o c o r p o r a t i o n s t o b e t t e r a t t r a c t S e r i e s A f u n d i n g M o s t v e n t u r e capitalists prefer C corporations because they have a simpler capital structure, better understood in the VC community

G e n e r a l l y, c o n v e r s i o n t o a c o r p o r a t i o n i s done in one of two ways The most common is the statutory merger, in which a new corporat i o n i s c r e a t e d a n d m e rg e d w i t h a n e x i s t i n g L L C , with only the c orpora tion s urv iv ing the m e rg e r. A f o r m l e s s c o n v e r s i o n , p o p u l a r w i t h Delaware corporations but not available in Illinois, allows conversion to a corporation simply by signing the correct forms.

If you choose either method for your client, because of the way statutory mergers and formless conversions are treated for federal tax purposes in terms of the form of the transaction, you may lose the ability for the corporate stock t o q u a l i f y a s S e c t i o n 1 2 0 2 s t o c k . I n o t h e r words, your client won’t reap any of the 100percent gain exclusion

To g u a r a n t e e t h e S e c t i o n 1 2 0 2 b e n e f i t s , Dubow recommends using the “assets up” or “interest over” approach per Revenue Ruling 84-111. “Think of the implications five years down the road of a $1 million dollar investment in what turns out to be a $100 million company,” he says “Ouch!”

2. Tax Breaks

Ta x b r e a k s f o r s m a l l b u s i n e s s e s h a v e b e e n extended through 2013 And according to the SBA, 97 percent of small businesses will not see their income taxes increase

In addition to this good news, the package of t a x b r e a k s t h a t s m a l l b u s i n e s s e s e n j o y e d i n 2 0 1 2 w i l l b e e x t e n d e d t h r o u g h 2 0 1 3 T h i s package includes:

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n Section 179 deductions: Along with retroactively applying to 2012, the $500,000 deduction limit also has been applied to 2013 So if you’re planning to invest in equipment, hardware or software, do it before the limit falls back down. The American Taxpayer Relief Act of 2012 also extended the bonus depreciation rate of 50 percent for certain new fixed-asset purchases through 2013, which was set to expire at the end of 2012 These accelerated depreciation provisions eventually will expire, so it may be a good idea to take advantage of them while you can

n Work Opportunity Tax Credit: Businesses that hire veterans or individuals from underserved communities will continue to earn tax credits based on the new hire’s income.

n Research and Experimentation Tax Credit: Along with applying retroactively to 2012, this tax credit also will be in place throughout 2013

3 Business-related Investments

The plight of high-net-worth taxpayers in the midst of the Fiscal Cliff has been much discussed in the news. More moderate highincome taxpayers, however, will see a 3 8 percent surtax on net

$200,000 for singles) While investment income traditionally referred to capital gains, interest and dividends, it is very

f i n e d f o r t h e M e d i c a r e s u rc h a rg e t o i n c l u d e r e n t a l income, as well as profits from passive investments (for example, when a person puts money into a business but is not active in it).

For the purposes of this tax, net investment income includes interest, dividends, annuities, royalties and rents other than such income that is derived in the ordinary course of a trade or business, less allocable deductions. Net investment income also includes

realized capital gains attributable to the disposition of investment assets, as well as income from a passive business activity or from a trade or business of trading in financial instruments or commodit i e s . A p a s s i v e a c t i v i t y i n c l u d e s a t r a d e o r b u s i n e s s a c t i v i t y i n which the owner didn’t materially participate during the year, as well as most rental activities.

To meet the material participation requirement, the owner’s involvement in the activity must be regular, continuous and substantial IRS regulations provide seven tests for meeting this requirement For example, under one of these tests, an owner materially participates in a trade or business activity if he or she participated in the activity for more than 500 hours during the tax year

Small-business owners could be affected because more than 90 percent of businesses file tax returns as S corporations or partnerships in which profits flow through to the owners and are taxed at the individual level, explains Mark Sellner of the University of St Thomas School of Law in Minneapolis There was a loophole for S corporation owners who minimized their salaries and instead paid out business profits as distributions, which are not subject to the surtax. Complex trusts will be especially hard hit.

4 Home Offices

Home office workers have a new safe harbor option To reduce paperwork burdens, the IRS will allow qualified taxpayers to deduct $5 per square foot for home office expenses, up to a maximum of $1,500 In addition, they’ll be able to deduct 100 percent of the interest on their mortgage and 100 percent of the real estate taxes as itemized deductions on Schedule A The traditional home office deduction required apportioning those costs between the home office on Form 8829 and Schedule A Two traditional requirements, however, still apply: The home office must be used regularly and exclusively for business and must be necessary for the conduct of the business

5. Rental Income

Net rental income is subject to the 3.8 percent Medicare Contributions Tax (MCT), unless the rental income is earned in the ordinary course of a trade or business, says Andrew Klemens of Wolf & Company LLP.

“A trade or business activity generally doesn’t include the rental of real property. Therefore, business owners who own real property outside of their business and rent this property to their business will be subject to this new tax For example, if you operate your business as an S corporation and your business rents the warehouse space used in its operation from a partnership that you also own, the net rental income will be includable in net investment income subject to the MCT ”

According to Klemens, business owners who face the MCT on rental income from a related lessee have options to consider that may reduce or eliminate the tax’s impact

“ F o r e x a m p l e , i f t h e r e n t c h a rg e d e x c e e d s m a r k e t r e n t s , t h e rental amount can be reduced to decrease net rental income subject to MCT. Alternatively, you can eliminate exposure to the MCT by restructuring your business and rental activities so that the business uses the real property directly instead of renting it from the owners,” he explains “This can be accomplished generally taxfree through a contribution of the real property to the operating entity. Using a holding company with wholly owned subsidiaries that operate the business and own the real property can preserve legal liability protection yet eliminate separate rental income subject to MCT Each business owner’s situation is unique ”

The Obamacare Effect

With new provisions on the horizon, healthcare is still something of a mystery

By Christine Bockelman

Affordable Care Act (which takes effect on January 1, 2014), small businesses across Illinois and the nation are navigating the unchartered waters of healthcare reform and hoping to stay financially afloat

While the broad strokes of the Act have been hashed out in the media and at board meetings since it was signed into law in 2010, almost four years later the details of how this is all going to play out are still rather murky

For instance, it’s known that Obamacare intends to provide affordable, government-regulated health insurance to Americans currently without coverage, and that it forbids exclusion based on gender or pre-existing conditions, expands Medicaid, and eliminates some copayments However, what we don’t know is how much this is going to cost, especially for small businesses, many of which will be mandated to offer health coverage to all fulltime employees for the very first time.

Although many of the hard numbers of the new healthcare landscape aren’t known, there is one number many business owners are stuck on: 50 Firms with at least this many employees working 30 hours a week or more must choose between offering coverage or paying a $2,000 fine for each full-time worker, minus the first 30 employees. The fine jumps to $3,000 per employee if they use tax credits to purchase insurance on the upcoming healthcare exchange

It might be a little hard to believe, but paying the fine a fixed cost just might be a less expensive option for some firms

“No one knows what the numbers are going to be,” says Mary Pat Wesche, CPA/PFS/CFP®, senior advisor and CFO of Forum Financial Management, LLC in Lombard, Ill “I think people think costs are going to skyrocket, but there’s no way to tell at this point.”

This lack of concrete information is concerning for small-business owners across the country. A January 2013 Wells Fargo/Gallup Small Business survey found that more than half (54 percent) of small-business owners think healthcare costs are

hurting their operating environment “a lot ” Also, 6 1 p e rc e n t a r e n o t h i r i n g b e c a u s e o f “ w o r r i e s about the potential cost of healthcare.”

H e r e ’ s w h a t i s k n o w n : O b a m a c a r e r e q u i r e s each state to set up a healthcare exchange, a competitive marketplace where the uninsured can go to comparison shop for coverage The exchanges will be government regulated, but each state can choose how to set theirs up Illinois has decided to operate an exchange with the federal government for 2014, while neighboring Kentucky is going a different route and will run its own.

Illinois has not projected the number of small businesses likely to participate in the exchange but e s t i m a t e s t h a t 1 4 9 , 0 0 0 e m p l o y e e s w i l l r e c e i v e coverage through exchange-offered plans a figure that climbs to 443,000 by the year 2020

Employees will have a few options for enrolling in the exchange health plans. The federal government will run a website, a call center and options f o r i n - p e r s o n e x c h a n g e e n r o l l m e n t a s s i s t a n c e . None of these have been set up yet in Illinois

“The thing that makes it difficult to move at this point is that we don’t know what the Illinois exchange is going to be,” says Mike Tomasek, a partner in the law practice of Freeborn & Peters LLC in Chicago “If we knew the quality and costs of the exchanges then it becomes a real thing to debate ”

There is every expectation that if the big players in Illinois insurance companies like Humana and Blue Cross are involved in the exchanges, the health plans offered will be high quality.

“If the Illinois exchange is moderately low cost and very good quality then the average small business is going to seriously consider paying the penalty and letting employees go to the exchange,” Tomasek explains

And if the exchanges are both low cost and high quality, they would be a big draw away from employer-based coverage for a lot of small and midsized companies, Tomasek adds.

Wesche’s company is advising small-business owners to get HSAs combined with a high deductible, either through the exchange or on their own “That way, you keep the premium dollars down and assume more risk yourself,” she says

Another option is to incentivize employees toward better health. “We’ve been told by some insurance consultants that we should offer wellness plans start smoking cessation programs and offer gym memberships to help lower costs,” says Wesche

A firm hovering around that sticky 50 headcount has a few strategies open to it, too For instance, it could reduce an employee’s hours from 30 a week to 29, therefore taking that person off the full-time employee roster. Similarly, some full-time workers could be allocated as contractors

“I think there should be some incentive for employers to look at their workforce and see who might be more properly categorized as an independent contractor or part-time if count is critical on a cost basis,” says Tomasek “Overall though, I hope this problem is corrected by legislation or regulation so that Obamacare better encourages job growth and creation.”

Regardless, until the major players in the exchanges are known, and financial information is available, there isn’t much a firm can really do. Small businesses are basically in a holding pattern.

And there’s a lot to accomplish before January 2014 In addition to setting up the exchanges and helping the public with enrollments, Illinois also has to work to expand its Medicaid program, which could enroll up to 500,000 additional people in 2014 thanks to new regulations

“Our clients’ concerns about Obamacare are all over the map,” Wesche admits. “They j u s t d o n ’ t k n o w e n o u g h a b o u t i t t o k n o w what to do ”

While all the details are being determined and the tax laws are changing, small businesses should do their own research and consult some experts “Small businesses need to be aware of the rules and financial implications, but there are many other factors that need to be considered before they decide how to navigate this,” Butcher stresses. “They need to think about their business decisions, their long-term goals, the costs of the exchanges, the type of care they want to offer and how it is a component of their business.”

“2013 is a time to think,” adds Tomasek “Spend some time weighing all the options, think about what you want to do and read as much as possible about the pros and cons of every decision.”

Obamacare might keep at least one thing the same, says Wesche “Healthcare costs have been a wild ride for years now, so this is just a new chapter ”

Empower the Future

Minority students find the inspiration to pursue illustrious careers in the accounting field

By Kari Natale

Pay it Forward

This time last year, Takabvekure Buranda, an accounting student at Harold Washington College, thought he might be working as a busboy for the rest of his life. His opportunities were limited and resources were scarce

All that changed, however, after attending the Illinois CPA Society’s Mary T Washington Wylie Internship Preparation Program at the recommendation of both his professor and career advisor Ultimately, Buranda was one of 10 program participants to accept a paid internship at a notable accounting firm

“Being a Mary T. Washington Wylie Scholar will take me to places in my life I never even knew were possible,” says Buranda “I believe this program has forever changed my future, my life and my family’s life.”

The program is an integral part of the Illinois CPA Society’s commitment to increasing the diversity and strength of the accounting profession, and continues Mary T Washington Wylie’s remarkable l e g a c y T h e f i r s t f e m a l e A f r i c a n - A m e r i c a n C PA i n t h e U n i t e d States, Washington made it her mission to support African-Americans aspiring to be CPAs in Illinois and across the country Now, her legacy is impacting the 25 minority students who participated in the inaugural Internship Preparation Program in January 2013.

The program is made up of various components, all of which offe r s tude nts a fun, inte ra c tiv e wa y to c onne c t with a div e rs e group of working accounting professionals, engage in practical training not typically found in the classroom, and participate in open Q&A forums.

On the first day, a panel of five young professionals spoke to students about their career experiences and what it took for them to

All expenses for the Mary T. Washington Wylie Internship Preparation Program are funded by donations to the CPA Endowment Fund of Illinois’ Mary T Washington Wylie Opportunity Fund This fund was founded by Lester McKeever, CPA, J D , managing principal, Washington, Pittman & McKeever, LLC, and offers the community an opportunity to promote diversity and strengthen the accounting profession

In addition, the CPA Endowment Fund of Illinois’ Herman J Neal Scholarship Fund supports AfricanAmerican students in their pursuit of an accounting education and the CPA designation This year the fund will provide three scholarships of up to $4,000 each to African-American accounting students who show significant potential to become CPAs and demonstrate achievement as well as financial need

The support of individuals and organizations make a tremendous impact on the lives of hundreds of future CPAs every year For more information on how you can lend your support visit www icpas org/annualfund.htm.

stand out, land an internship and ultimately get hired full-time They also provided advice on factors to consider when determining a career path in accounting, and how to overcome the challenges of transitioning from school to work.

Marco Pineda, a University of Illinois student, is already applying for internships at accounting firms He explains that, “I saw the excitement that real-world CPAs can have about their jobs Meeting CPAs from several accounting career paths and at different stages in their careers gave me the motivation I needed to place myself in one of those positions They are passionate about what they do and truly believe in the importance of the profession ”

Internships are extremely competitive, and extra training can r e a l l y s e t c a n d i d a t e s a p a r t . Wi t h t h i s i n m i n d , t h e p r o g r a m i n c l u d e d p r e s e n t a t i o n s o n t h e i m p o r t a n c e o f d i v e r s i t y i n t h e accounting profession, business etiquette, leadership competencies, ethics and the CPA Exam, and gave students the opportunity to connect with potential mentors.

Key to the program’s success were the ICPAS’ partnerships with the National Association of Black Accountants, the Association of Latino Professionals in Finance and Accounting, accounting faculty in Illinois, and a number of accounting firms and organizat i o n s i n t h e C h i c a g o l a n d a r e a , i n c l u d i n g C r o w e H o r w a t h L L P, Deloitte LLP, Ernst & Young LLP, Grant Thornton LLP and KPMG L L P. T h e s e f i r m s p r o v i d e d g u i d a n c e o n k e y a r e a s s u c h a s t h e resume review process, and set up mock interview sessions all of which provided invaluable insight into what these particular accounting firms look for when assessing potential interns

“I really appreciated the opportunity to get resume, interview and internship advice from the perspective of people working in the accounting firms where I aspire to begin my career,” says Sharnay Bradford, a junior at McKendree University “The networking and interview experience is invaluable to me because it gave me exposure that I might not have gotten coming from a smaller school ”

On the final day, participating firms conducted informal interviews and had the opportunity to extend internship invitations

The extent of the program’s reach is impressive, with students from 16 Illinois schools (including community colleges and twoy e a r s c h o o l s ) p a r t i c i p a t i n g M o s t i m p o r t a n t l y, t h e p r o g r a m attracted students from schools where accounting firms may not typically recruit, providing access and educational opportunities to individuals who otherwise wouldn’t receive them

“This is a program that works, and it’s a program that we think i s w o r t h a s i g n i f i c a n t i n v e s t m e n t , ” e x p l a i n s J a v i e r M a g a l l a n e s , campus recruiter for Deloitte. “It’s important to us to identify and help prepare the top minority students across the state, and this program reaches students that we might not otherwise have the chance to interface with ”

Another significant barrier these students face is financing for their educations As college costs continue to rise, scholarship support is becoming increasingly critical, which is why all 25 students also received a $500 scholarship upon acceptance to the program

“This program opened my eyes even further to the importance of doing well in college,” says Buranda “I’m inspired to keep learning and growing ”

Kari Natale is development manager for the Illinois CPA Society and the CPA Endowment Fund of Illinois She can be reached at natalek@icpas.org or by calling 312.993.0407 ext. 290.

2013 | call for nominations

The Illinois CPA Society, together with the AICPA, is once again looking for outstanding women who have made significant contributions to the accounting profession, their organizations, and to the development of women as leaders.

AWARDS WILL BE GIVEN IN TWO CATEGORIES:

experienced leaders

•mentoring other professionals

•community service

•major or unique contributions to the profession

•leadership in workplace improvements

•authorship of professional articles

emerging leaders

•demonstration of leadership

•contributions to the profession

•creation and implementation of unique initiatives in the workplace

•community service

•involvement with her alma mater

Candidates must be members of the Illinois CPA Society (ICPAS) and American Institute of Certified Public Accountants (AICPA).

Not a member?

Visit www.icpas.org and/or www.aicpa.org.

Applications must include information supporting the individual’s qualifications (resume, biography, letters of support, etc.) and can be sent to: Illinois CPA Society, 550 W. Jackson, Suite 900, Chicago, IL 60661-5742, Attn: Gayle Floresca, Women to Watch Awards.

For more information, call 800.993.0407, ext. 254 or visit www.icpas.org/womentowatch.htm.

Deadline for submissions is June 30, 2013

how To Be a FearLeSS Leader

T his one is for the mover s and shaker s.

T he up-at-5-a.m. yoga war rior s. T he r un-during-lunch and networ kafter-wor k cr owd. T he I’m-taking-this-class-because-it-inter ests-me set. T he that-of fice-has-my-name-written-all-over-it g r oup.

T h e r e a r e fe w r e l u c t a n t l e a d e r s . M o s t a r e m a d e , n o t b o r n ; s e l fmade, with help along the way fr om famil y, mentor s and the school of life. Becoming a leader is an intentional pur suit, bor n fr om humb l e b e g i n n i n g s . Yo u m a y b e i n t h e s m a l l e s t c u b i cl e i n t h e m o s t obscur e cor ner now, but you’ r e r eady for the next step, ar en’t you? Good. Your timing is perfect.

By Kristine Blenkhor n Rodriguez icpas org/insight htm

The good news is, your firm is motivated to promote you in ways they haven’t been for quite some time, due to the simple law o f s u p p l y a n d d e m a n d I n t h e 2 0 1 1 / 2 0 1 2 Tr e n d s i n E x e c u t ive Development Benchmark Report (issued by Executive Development Associates and the Pearson TalentLens Group), chief learning, h u m a n r e s o u rc e s a n d e x e c u t i v e d e v e l o p m e n t o f f i c e r s c i t e d t h e importance of being proactive in accelerating the development of both “high potentials” and emerging leaders Survey participants emphasized the need for clear succession plans and a well-developed group of hopefuls in light of the high percentage of executives who plan to retire in the next 5 to 10 years

How do they plan to develop you as a leader? For top executives and vice presidents, survey participants cited the use of executive coaching as the number one development strategy. For vice presidents and high potentials, the use of developmental job assignments and internal custom programs were listed as popular methods, followed by mentoring and coaching

To give you a bit more insight into what the future might hold in t h e l e a d e r s h i p d e p a r t m e n t , w e t a l k e d w i t h p e o p l e w h o m a k e a business of coaching boss material people who have forged their own steps all the way up to the C-suite, and who spend a lot of their time studying and writing about leadership

Here, then, is their advice on key areas you need to shore up on before hitting the hallowed halls of upper management

THE SOPHISTICATED SCHMOOZE

In a nutshell, build confidence in your ability to network, communicate and connect.

Can you succeed without making connections? In rare cases, yes, says Mel Toomey, scholar-in-residence at the Center for Leadership Studies at the Graduate Institute, Bethany, CT, and we’ve all seen it or been an unfortunate subject to it. “Those executives who are a favorite of one particular company leader and are promoted solely on that basis well, they’re like a blind squirrel finding a nut They’re anomalies Maybe they’ve done one phenomenal thing, but they couldn’t repeat it to save their lives. Find me one of those and I’ll find you someone who works in a vacuum. Leaders don’t do that ”

In IBM’s 2012 Global CEO study, Leading Through Connections, collaboration was listed as the number one trait CEOs look for in their employees, with 75 percent calling it critical. It’s safe to say they expect it tenfold in their leaders When asked to highlight personal characteristics most crucial to the future success of employees, the top two cited were collaboration (75 percent) and communication (67 percent).

How do you become a truly confident collaborator and communicator? Follow these eight steps

1. Carve a niche

aren’t sure what they have to offer in return John Mattone, a master corporate executive coach, says becoming a subject matter expert in a niche area is one way to bring something to the table

“So many higher-level executives don’t have the time or purview to specialize They appreciate someone stepping up to the plate and filling the void There’s nothing wrong with being the go-to p e r s o n i n o n e a r e a i f i t g e t s y o u n o t i c e d a n d y o u c o n t i n u e t o broaden your skills.”

2. Be real.

In Mattone’s experience, those executives who can’t be vulnerable might well get ahead, but they won’t stay ahead “If you aren’t willing to raise your hand when you don’t know something, you’ll stumble And it’ll be apparent to everyone that you overstepped your limits instead of asking for expertise when it was needed.”

3. Choose your favorites

F o r m a l m e n t o r i n g p r o g r a m s u s u a l l y f a l l s h o r t , s a y s M a t t o n e , because you can’t force chemistry “There needs to be a natural affinity between the people being matched up,” he explains.

He recommends going to executives you admire on your own “Choose two to three that you feel you can learn from. Ask them to lunch or walk to the office from the train with them in the morning whatever they’re willing to give you. You need to hear their stories what they faced, how they handled it, what they’d do differently because the likelihood of you going through similar situations is high ”

4. Project authenticity

While online connections are the tool du jour, Leslie Marquard, CEO and managing director of executive coaching and corporate strategy firm Marble Leadership Partners, cautions against relying on them solely. She finds young professionals very skilled at creating an online presence but sees them fall short when it comes to face-to-face networking.

The cure? Executive presence training “Most successful execut i v e s h a v e h a d t h i s t r a i n i n g i n s o m e w a y, s h a p e o r f o r m , ” s h e explains Everything from dining skills and the first impression you give when entering a room, to elocution and improvisational skills

For instance, “Are you good on your feet in a room?” she asks If you’re a mumbler, “then take singing lessons It’s all about learning to talk from the diaphragm, not the throat. And it matters. How many executives have you seen rise to the top that are truly inarticulate or inaudible?”

5. Gather supporters

In practical terms, executive presence doesn’t win the war You need supporters and cheerleaders to help you do that, says Marquard “Host a meet-and-greet Reach out to a select group of 10 people Meet at the Metropolitan Club at Willis Tower if you’re in Chicago, or somewhere else people ahead of you in the game will go Forget your local bar that’s for your informal work buddies ”

6. Make the hard online call

Marquard urges you to make a similar distinction online “If you’re networking via LinkedIn, who are your contacts? High school friends or pros you want to learn from? It sounds basic but I see people make poor judgments on who to include quite often. And you pay for it One stupid posting by an old friend can be a career burner. Accept and extend online networking invitations with care.”

7. Think small(er)

Working for a smaller firm was an advantage during his younger y e a r s , s a y s S R A M C F O M i k e H e r r, b e c a u s e h e w a s i n v i t e d t o events hosted by accounting firms, tax firms, banks, etc that did work for his employer At a larger firm, more senior executives would have taken his slot.

8. Watch and learn

Although technical communications are the standard in today’s business world, face-to-face interaction is still an extremely important skill to master “Meet people and go to events,” Herr encourages “That’s where you can hone your communication skills in a

Be FeaRless at the ICPas Young Professionals leader ship Conference

Join like-minded, leadership-oriented young professionals at the Illinois CPA Society’s Young Professionals Leadership Conference at the Metropolitan Club, Willis Tower, on May 31. This half-day program opens with a thought-provoking keynote discussing core leadership challenges presented by nationally renowned leadership expert Todd Dewett, Ph.D., president of TVA Inc. and Professor of Management and Robert J Kegerreis Distinguished Professor of Teaching at Wright State University in Dayton, Ohio. Sessions also broach the gray areas of ethical leadership, and offer the chance to make connections through breakout sessions on topics such as finding work/life balance and transitioning to a manager role Don’t miss this great opportunity to make the connections that will help to build y o u r l e a d e r s h i p f u t u r e The small print: Seats are limited and space fills up fast, so visit us at www icpas org/fearless htm or call 800 993 0407 ext 275 today to register The conference costs $55 for ICPAS members, and offers 4 hours of CPE, including 1 hour of Ethics credit

more low-pressure environment. Watch the ones who do it well and learn.”

Watch your own interactions as well, Herr advises, particularly the hurried electronic ones He cautions that smiley faces and BFFs should be reserved for your, well, BFFs Keep them out of office communications

EMOTIONAL INTELLIGENCE

More than a catchphrase, emotional intelligence and confident s e l f - a w a r e n e s s a r e q u a l i t i e s i n c r e a s i n g l y r e c o g n i z e d a s c o r n e rs t o n e s o f s t r o n g l e a d e r s h i p I n d i v i d u a l i t y t r u m p s t r a d i t i o n i n today’s business world

Just look at Steve Jobs, who liked to fast or eat only one type of food for weeks at a time. Unconventional, yes, but he felt it led to moments of enlightenment and creativity And what about Padmasree Warrior, Cisco’s Chief Technology and Strategy Officer, who spent 19 years working on increasing her meditation time from 2 to 20 minutes daily She dedicates her weekends to family, haiku and painting, explaining that these activities help her maintain the big picture and a broader understanding of humanity. With more than 1 4 million Twitter followers and a ranking on Forbes’ list of “Power Women,” her approach seems to be working for her

And let’s not forget Henry Singleton, the mathematician who f o u n d e d c o n g l o m e r a t e Te l e d y n e i n t h e e a r l y 1 9 6 0 s . S i n g l e t o n p l a y e d c h e s s b l i n d f o l d e d t o f i n d h i s i n n e r l e a d e r s h i p s t r e n g t h .

According to William M Thorndike’s book, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success, if you had invested $1 in Teledyne in 1963, it would have been worth $180 when Singleton retired as chairman in 1990, during a bear market. The company outperformed the index multiple times during his tenure.

Introspection is only one component of emotional intelligence, however Another is “the alignment of how you see yourself with h o w o t h e r p e o p l e s e e y o u , ” M a t t o n e e x p l a i n s “ N e i t h e r w o r k s without a dose of reality from its counterpart ”

Marquard calls this “fielding the landing.” “It’s not enough to know your own values and emotions You have to know how your leadership style lands on other people ”

The coach says she’s worked with many executives who readily admit to being control freaks and seem proud that they can identify that weakness. “But do you know how that trait feels to the people you manage and lead? Do you know what it translates into? How it impacts and hinders their ability to be successful?” Without that crucial secondary knowledge, self-awareness doesn’t take you very far, she says

At the other end of the spectrum, Herr does indeed possess that secondary knowledge when he speaks of his days as a young audit o r “ Yo u ’ r e a u d i t i n g a l l d i f f e r e n t k i n d s o f c o m p a n i e s a n d g e t exposed to just as many personalities Many people think you’re just this young auditor and you don’t know anything Most of the time they treated me and their employees pretty much the same I u n d e r s t a n d w h e r e m y y o u n g e r e m p l o y e e s a r e c o m i n g f r o m . I remember what that felt like. And I give them time to learn. They need to learn fast, but I don’t withhold respect because they’re green We hired them so we obviously think they come with the potential to contribute I treat them accordingly ”

Sometimes dismissed as a soft issue, Marquard explains that, “Emotional intelligence comes from healing past wounds, in part, and recognizing patterns. The best leaders have done their internal work and they bring that health to the workplace They leave the dysfunction behind ” She recommends reading Leadership Agility: Five Levels of Mastery for Anticipating and Initiating Change by William B. Joiner and Stephen A. Josephs to get insight into why emotional intelligence matters.

TABLE STAKES

Or, to put it in plain English, building knowledge and mastering technical skills

“ U n d e r s t a n d i n g s t a n d a r d a c c o u n t i n g p r a c t i c e a n d t h e l a t e s t technical changes is key, yes,” says Marquard “But the skills that catapult you to CFO are systemic and holistic, strategic. CFOs are forward thinkers.”

They’re also good risk assessors “When you’re a CFO, taking on risk intentionally is necessary Being risk-averse is not really an option if your company is to thrive in the long run A CFO takes on risk with careful scenario planning if X happens, we’ll do this If Y happens, this, etc.,” says Marquard.

If you lack the opportunity to gain experiential leadership skills in your current position, volunteering at nonprofits, for industry associations and finance-related professional organizations is an excellent way to broaden and deepen your base Relatively speaking, it’s stress-free resume-building

An MBA also may be a goal you’ll want to set in order to level the leadership playing field. “One can’t lead unless they’ve mast e r e d m a n a g e m e n t , b u t t h e r e n e e d s t o b e a p l a t f o r m t o b u i l d upon,” says Toomey “In addition to the technical skills necessary to be a good financial executive and CPA, a good MBA program is key if you want to be considered seriously for a future leadership position. Much of the industry knowledge you can get on the job, via continuing education or self-generated on the Web Not so with the knowledge you gain from an MBA ”

CPA 2020

Nearly three years ago the Illinois CPA Society asked CPAs what they thought the profession would look like in 2020. Now, with only seven s h o r t y e a r s t o g o , w e t a k e a l o o k a t w h a t needs to be top-of-mind among finance leaders looking to the future.

By Derrick Lilly

During a Town Hall Forum on a cold and misty Monday morning i n J a n u a r y, f o r m e r I l l i n o i s C PA S o c i e t y P r e s i d e n t a n d C E O E l a i n e Weiss spoke to 139 Chicagoland CPAs about the state of the profession and some of its top concerns She asked, “Is the worst behind us or is it still to come?” The overwhelming response was that the worst was behind us and no, they weren’t talking about the weather S o, e v e n while We is s pointe d out tha t s ma ll bus ine s s e s a re on edge, unemployment remains stubbornly high, CFOs are guarding their treasuries, and the nation’s politics and economics are strained at best, the audience of CPAs from firms and businesses of all shapes and sizes simply nodded in agreement but remained resolute No matter what headwinds the profession faces, CPAs remain confident that better times lie ahead

Recovery Mode

“The years 2008 through 2011 were not particularly kind to the p r o f e s s i o n We s a w t h e c o m m o d i t i z a t i o n o f s e r v i c e s a n d f i r m s a g g r e s s i v e l y p u r s u i n g w o r k w i t h c o m p e t i t i v e b i d d i n g ( i . e . l o wballing); there was a major price war that took place,” says Allan D Koltin, CPA, CEO of Chicago-based Koltin Consulting Group “But we are coming out of that now, and those years taught us that even in a prolonged recession, clients, individuals and businesses still need accountants and accounting firms ”

The Koltin Consulting Group specializes in practice management consulting for firms with roughly $3 million to $700 million in revenues. What Koltin’s clients saw in 2012 marked a turning point the first uptick in five years. “The bleeding has stopped, we are seeing good things happening, and we are seeing true organic growth through new projects, new clients and new opportunities,” he says.

When a person named by Accounting Today as one of the “Top 100 Most Influential People” in the accounting profession for 13 consecutive years says, “good things are starting to happen,” it might well be time to gear up for a dynamic marketplace

Intuit put it best in its Intuit 2020 Report: “The next decade will be a period of rapid change and continuous churn for the accounti

whitewater, requiring new levels of business agility and flexibility ”

Firm Churn

“The graying of the profession” is one factor really shaking things up a shift Jim Bodtke, CPA, MSA, CEBS, president and founder of Bodtke & Stewart CPAs, feels will lead to dramatic changes in the marketplace

“Given the recent economy, no-one forecasts more than three to five years ahead because that’s just too far down the telescope to see anymore, and that’s a cause for concern,” he says “Many firm leaders haven’t taken enough steps to replace themselves; a lot of firms are going to go out of business, not for lack of demand or profitability, but because of manpower.”

“More than 50 percent of partners in local and regional firms are over the age of 55; it’s a ticking time bomb,” adds Koltin “Do we have the next generation, the B Team of future leaders and partners to take over for the partners that are, and will be, retiring? Unfortunately, for probably half of the firms we consult to, the answer is no ”

This troubling truth has Koltin predicting “massive consolidation of firms across the profession and continuing M&A activity year after year.” This trend, coupled with the resilient demand for CPA services, means that firm owners will be doing everything possible to increase their business values “Their retirements count on it, and a lot of professionals are going to be looking to sell their practices to capture the greatest value before they need to retire; it’s their nest egg,” says John Currier, CPA of John W Currier & Com-

Bodtke sees this as a unique opportunity thanks to the very low interest rate environment we’re experiencing now and predictably into the near future “Reasonable loans are very achievable,” he s

o u r s e , t h i s r a i s e s a n i m p o r t a n t q u e s t i o n : “ H o w a r e y o u going to grow the value of your business?”

Firm Reinvention

“ Yo u h a v e t o c o n t i n u a l l y r e i n v e n t y o u r s e l f We ’ r e s e e i n g f i r m s increasingly trying to help their clients with all of their business and financial problems, whatever they may be, rather than sticking to the mindset that they’re just an accounting, tax, or audit firm,” says Koltin. “We’re entering an era of differentiation where leaders clearly have to be focused on taking the trusted business advisor role to the next level.”

The emerging trend identified by the AICPA’s CPA Horizons 2025 Report is for CPAs to “extend CPA offerings beyond traditional services” by positioning themselves as “strategic partners who can bring together experts from different specialties to solve problems.”

Calling on the expertise of specialists to assist in servicing all of a c l i e n t ’ s n e e d s i s n o w t h e n o r m , e s p e c i a l l y f o r s m a l l f i r m s , because it’s “pretty tough to be everything to everybody anymore,” says Currier. “If you’re going to remain a small firm, you’re going to have to collaborate with other professionals because the larger firms have that expertise in-house and they’re going after the exact same clients ”

As harsh as it sounds, “The biggest failure of a small firm is to try to be all things to all people You simply can’t overstep your skill set,” says Bodtke, who sees positive business opportunities for those who realize this fact “We used to feel that we owned our clients, but that’s not the case anymore Local firms are opening up to other local firms, and the secretive non-disclosure mentality of, ‘If they find out who my clients are, they’ll steal them’ has gone away; it’s given way to more robust professionalism ”

This newfound collaborative spirit is allowing firms to hone their expertise in specific target markets and in specialized areas rather than trying to keep their doors open as Jacks-of-all-trades The CPA Horizons 2025 Report explains that specialization “offers CPAs the opportunity to increase their value to clients and employers through broader guidance and insight Just as many CPAs today choose to work in specific areas preparers, auditors, tax specialists, wealth managers and fraud examiners are just a few examples specialized areas will grow ”

Talent Wars

The Crain’s Chicago Business article, “Who knew accountants could be so popular?” points out that everything from changes in business structures and increasing M&A activity, to navigating complex regulations/tax policy and wealth management/estate planning for Baby Boomers is increasing the demand for specialized CPAs

The article also states that surging demand is setting off a new r e c r u i t i n g r u s h a t s o m e n o t a b l e C h i c a g o a c c o u n t i n g f i r m s McGladrey LLP expects to hire 300 to 500 people over the next five years, for example, and Deloitte has more than 700 positions t o f i l l b e t w e e n i t s C h i c a g o o f f i c e a n d o t h e r l o c a t i o n s E r n s t & Young LLP, too, is planning to recruit around 600 new graduates and experienced pros in 2013 alone

If there’s one bright spot in the nation’s labor market, it’s cert a i n l y i n a c c o u n t i n g T h e U S D e p a r t m e n t o f L a b o r ’ s O c c u p ational Outlook Handbook, 2012-13 Edition predicts accountants and auditors will lead job growth with 190,700 new positions in the business and financial operations industry that’s forecast to grow by 1 2 million jobs from 2010 to 2020, and Yahoo! Education recently called accounting and auditing “red hot” careers

The trouble is that there simply isn’t enough talent to go around “There’s definitely a shortage of talent out there, and the price of skilled talent is being driven up,” says Currier “Plus, trying to find recruits with the right personality to fit in with the firm’s culture is always hard ”

Bodtke attributes much of the recruiting challenge to the fact that there are fewer young people entering the profession As a professor of accounting at Illinois’ Bradley University and a visiting professor at Minnesota’s St Cloud State University, he’s finding that “more young people are looking at industry as the place they want to land instead of public accounting. Nobody wants to be a ‘stodgy’ mid-tier CPA partner; everybody wants to be the CFO of Hot & Glam Inc. with an IPO ready to go and stock options.”

What’s more, “A lot of talent hunkered down during the recession, and what we are seeing since the second half of 2012 is some attrition of staff; they’re either taking opportunities in private industry or defecting to other accounting firms,” says Koltin. “What this tells firm leadership is that they need to get back to the basics if they want to win the widening war for talent That means focusing on being an employer of choice, a best place to work, and paying best wages ”

Retain & Recruit

Accepting the fact that the profession is working through a generational shift and embracing changes in workplace culture are crucial if firm recruiting and retention efforts are to succeed now and into the future.

“We’re going to have to change as employers because the next generations are not going to change for us, and they don’t have to They aren’t going to give up what they want in their lifestyle, and money is not a motivator because money is assumed to them,” s t r e s s e s B o d t k e . “ F i r m s n e e d t o u n d e r s t a n d t h e i r c u l t u r e t h e y don’t mind working 35 hours a week and getting paid for that; they’re not going to work 60 hours while getting paid for 40 like it used to be ”

“I’m looking for evolution, not a revolution; there’s got to be a m e e t i n g i n t h e m i d d l e , ” s a y s K o l t i n “ F i r m s c a n h a v e a f a m i l y friendly environment with more flexibility, where professionals don’t have to always be in the office or kill themselves during tax season, where there’s appreciation for work well done and there’s camaraderie ”

After all, isn’t getting a superstar part-time a lot better than no one full-time? Firms will have to use those perks as differentiators, because traditional benefits just won’t cut it anymore

“If you want average talent, these things don’t apply, but if you want to win the war on talent, and you want to recruit and retain t h e b e s t a n d b r i g h t e s t t a l e n t , t h e r e a r e t h r e e f u n d a m e n t a l s y o u need to provide,” says Koltin “First, you have to be able to pay top wage; a lot of firms want top talent but they just can’t afford it. Second, firms need to keep growing to offer career advancement a n d p r o f e s s i o n a l g r o w t h ; h i g h - p r o f i t , h i g h - g r o w t h f i r m s h a v e a huge advantage over other firms Third is training: Employees want more than just a financial investment; they want customized training based on the talents needed to advance in the firm and continually self-improve ”

Tech Targets

Technology is one thing making it easier for firms to self-improve. Thanks to the Internet and constant, rapid advancement in hardware and software offerings, all of a firm’s resources and documents can be available at the touch of a button anytime, anywhere.

“Technology has been the biggest game-changer over the last decade; the advent of the microchip forever changed and will continue to change the accounting profession,” says Koltin “You don’t have to have the bricks and mortar; you don’t have to physically be in the office anymore ”

The truth is, people don’t want to come to the office, says Bodtke “Half of our employees work onsite and half work offsite The realestate-centric firm model isn’t going to survive very long ”

The same is true for clients. “New companies are using the Internet a lot more and don’t necessarily need traditional accounting firm services,” says Currier. “They need more real-time, cloudbased systems and services I see a growing client base coming from young people starting up Internet-based businesses.”

The challenge for most firms and professionals is keeping up with changes in technology and deciding which devices, hardware and services are needed to be relevant to current and future clients Our experts say the best choice is to “hire really good technology consultants” to help to navigate the challenging areas H

”

Currier, in fact, has “someone working on growing our website a

Local, Google Plus, Facebook, Twitter, Yelp and all of those other things to ensure our image is positive and prominent when people search for us ”

And Bodtke explains that his firm sets aside “a budget for technology and independent consultants to assist us in achieving our o b j e c t i v e s . S e c u r i t y a l o n e i s a h u g e r e g u l a t o r y i s s u e t h a t y o u shouldn’t attempt to do on your own The cost of a data breach is huge; it will be an expensive lesson for the unprepared.”

Regulations Overload

A s f o r t h e r e g u l a t o r y e n v i r o n m e n t a s a w h o l e , t h e o u t l o o k i s mixed Bodtke thinks we have enough regulations on the books, Currier expects only more to come at the federal and state levels, and Koltin simply thinks it all comes in cycles

“Regulatory and standards overload has been part of the industry’s vocabulary since I joined the profession 32 years ago,” he says. “Regulations come until there’s a push back from professionals saying, ‘Enough already, you’re choking us ’ I think that’s the feeling today I think most regulation will be on a holding pattern until firms have a chance to breathe and return to pre-recession levels along with the world economies ”

Most importantly of all, however, CPAs can’t lose sight of what’s necessary to run their firms successfully

“If you don’t grow, you die, and unfortunately you die a slow death You have to be about continuous growth and reinvention, winning the war on talent, and being passionate about profitability So many firms are busy being busy that they lose track of the basic principles of what it takes to have a successful business year after year,” says Koltin

“In the simple, yet profound words of Carl George, former managing partner and CEO of Clifton Gunderson LLP, ‘The vision of CPA firms has to be on two things and two things only: Take care of your clients, and take care of your people; everything else will follow.’”

ARE YOU

By Clare Fitzgerald

Fitting in with colleagues Impressing supervisors

Pr o v i n g y o u r w o r t h I t ’ s t h e s a m e l a u n d r y l i s t o f must- dos for young finance pros only just beginning their careers Abstract concepts like ethics and values may not be quite as top of mind So when you find yourself in the middle of an ethical dilemma,

ETHICAL? what do you do?

Professionals at every stage of their careers face the temptation to cut corners, fudge details or simply look the other way. But with their low-man-on-the-totem-pole status, young professionals can be particularly at risk of making a bad decision or misinterpreting someone else’s actions

That’s why, in addition to paying close attention to an organization’s ethics guidelines and staying up-to-date with professional ethics training requirements, young finance pros in the public and private sectors also need to take the time to reflect on their personal values and mentally prepare for how they will navigate or avoid altogether the types of sticky situations that could negatively impact the profession, their organizations and their careers

“Most people, most of the time, want to do the right thing,” says C K Gunsalus, author of The Young Professional’s Survival Guide and director of the National Center for Professional and Research Ethics, an online ethics resource developed by the University of Illinois Coordinated Science Laboratory in Urbana “Most people really care about being known as a person of integrity. But meaning well and being a good person aren’t always enough.”

These six strategies will help you make the jump from meaning well to doing right

Six strategies for navigating moral quandaries in the workplace and keeping your reputation intact.

1. Know thyself

C l a s s e s c a n o n l y g e t y o u s o f a r. A t s o m e p o i n t , y o u ’ l l n e e d t o depend on your own moral code to navigate an ethical dilemma, which is why ethics experts say that identifying your values early on is so important

“Values are deeply personal as well as professional,” explains Guns a lus “ Ta k e s ome time a t the be g inning of y our c a re e r to think about what really matters to you. Ask yourself, ‘Who do I want to be?’”

Frank Bucaro, a Bartlett, Ill.-based ethics and values leadership consultant, explains that, “You need to agonize over these things Being ethical often means making a tough decision with a payout in the long run, versus an easy decision with a payout up front Know where your line in the sand falls Evaluate what’s acceptable and what’s not within your own values system That will give you your ethical guidelines ”

Once you’ve identified your values, Gunsalus suggests talking about them early and often “You need to be able to articulate where you stand and what values you hold dear,” she says “Talk about your values and ethics in your very first interview You don’t have to sound holier than thou. Just find ways to talk about your values in your own voice You’ll get labeled as an ethical person ”

To stay true to your values, Gunsalus recommends avoiding the “just this once” tendency “You’ll always be able to find a way to rationalize something,” she says. “Once always leads to more. There’s never going to come a day when you say, ‘I have enough; now I can be ethical.’ Start as you mean to go on.”

Perhaps the simplest strategy for staying on the ethical up-andup, however, is to ask yourself what your mom would think.

“ P e o p l e t e n d t o c o m p l i c a t e e t h i c s , ” s a y s L a u r e n B l o o m , a Springfield, Va.-based business ethics consultant and author of Elegant Ethical Solutions “Ethical dilemmas are usually quite simple to figure out. If you had to tell your mother what you were doing, what would she say? It sounds very pedestrian, but it’s true People try to be too clever, and that’s where they get into trouble.”

2. Anticipate questionable scenarios

The potential for inappropriate workplace conduct will always exist despite tighter regulations and the stricter corporate environment in place since the collapse of Enron and Arthur Andersen 12 years ago After all, there’s no shortage of pressures, temptations and emotions that can contribute to bad decisions and test even the mos t e thic a lly inc line d pe ople M one ta ry re s tric tions , time constraints, ambition, fear, embarrassment and the desire to please are just a few of the trials we face

Bloom warns young professionals to prepare for situations that raise red flags, such as feeling railroaded to do something quickly or being promised something they know they’re not entitled to.

Professional ethics training can prepare CPAs for accounting and auditing-specific ethical standards relating to accepting gifts, stock ownership, conflicts of interest and maintaining independence. But other situations undoubtedly will arise where you see or are asked to do something that feels inappropriate whether it’s seeing a mentor inflate a business expense, hearing about a ques-

tionable relationship or sketchy deal, or being asked to doctor a document for a colleague

G u n s a l u s s u g g e s t s d i s c u s s i n g h y p o t h e t i c a l s i t u a t i o n s s u c h a s these with friends “Lots of things can come up,” she says “Learn about how things can go wrong. Think about the scenarios you might encounter and how you would handle them ”

Knowing what you might say if caught off-guard and how you should say it is crucial. Gunsalus suggests preparing “personal scripts ” “Develop some thoughts about what you might say There are ways to say no without sounding sanctimonious,” she says, n o t i n g t h a t y o u n g p r o f e s s i o n a l s c a n f i n d w a y s t o l a u g h o f f a request, change the subject or simply say they’re afraid of getting caught or need to look it up and get back to the person “At the very least, have a personal script for buying time ”

3. Get the facts

Although it’s important to prepare a response, Bloom also warns that you need to tread very carefully and watch your tone when bringing up an ethical concern “A lot of times young professionals think they have an ethical dilemma when they really don’t,” she says “Take a deep breath and make sure you know what you’re being asked to do and why. Avoid the temptation to get up on your high horse ”

Bucaro agrees “If you see something questionable, ask yourself if the behavior is acceptable. Don’t immediately throw out accus a t i o n s , b e c a u s e 9 t i m e s o u t o f 1 0 , a c t i o n s a r e m i s i n t e r p r e t e d Newbies rarely have all the information they need Seek out more knowledge on the subject ”

Asking questions is critical, says Bucaro, but ask them diplomatically “There are ways to ask questions without being offensive or unprofessional,” he says, and suggests using phrasing such as, “I need your wisdom here,” “What am I missing?” and “I think I’m a little confused ”

“Find out what you don’t know before you pass judgment,” he adds “A lot of times there is a good explanation ”

It’s also vital to seek out people you can trust. “Look for mentors and seasoned veterans you can go to if you have a concern Think ahead about who you might go to when you need guidance, and work to build trust and solid relationships with those people,” says Bloom “Find people throughout the organization who you can go to and ask ‘What do I do?’”

4. Consider the consequences

“Be aware that unethical behavior costs the time and resources of o t h e r s , ” s a y s G u n s a l u s . “ Yo u n g p r o f e s s i o n a l s n e e d t o c o n s i d e r who else is going to be affected Think strategically about the consequences of any questionable decision or action ”

Bucaro likens unintended consequences to the waves that radiate from a rock thrown in a pond. “The bigger the rock, the bigger the waves,” he says “People need to think about their actions when the rock is in their hands, before they throw it You never make a decision in isolation. It’s always going to affect other people.”

And workplace wrongdoing can creep into your personal life as well, affecting health, sleep, family, relationships and overall career prospects, a phenomenon that Bucaro calls the “moral spiral.”

B e a w a r e o f t h e r e p e rc u s s i o n s o n y o u r o rg a n i z a t i o n . T h o s e young professionals working in accounting firms need to be especially aware of independence guidelines. “There’s no wiggle room on anything that impairs a firm’s independence,” says Chris Rabin, director of quality assurance at Sikich LLP in Naperville, Ill. “Mistakes in that area could cause the firm to have to resign from a client engagement An honest mistake can have fairly severe consequences for the firm ”

5. Evaluate the tone at the top

Although an organization’s ethical tone is typically set at the top, i t ’ s t h e y o u n g p r o f e s s i o n a l ’ s j o b t o e v a l u a t e w h e t h e r t h a t t o n e matches his or her personal values and whether the organization actually functions according to its ethical codes.

“See if the organization’s actions and informal culture match the words on the wall,” Gunsalus advises. “Remember, Enron had a terrific code of conduct. You need to watch to see if management is actually walking the talk.”

Look for proof of the organization’s commitment to ethical codes of conduct. At Sikich, for example, Rabin’s position is solely dedicated to quality control and making sure the firm and its staff are compliant with professional guidelines and ethics. Depending on an organization’s size and sector, it may or may not have staff dedicated to ethics, but as Bucaro notes, organizations should display their ethical convictions in a visible way, whether it’s showing that everybody plays by the same rules or by swiftly disciplining or removing staff members who cross ethical lines.

“Young people starting out in their careers should focus on what t h e y t r u l y b e l i e v e i n t e r n a l l y a n d l o o k a t h o w t h a t m a t c h e s t h e c o m p a n y ’ s v a l u e s s y s t e m , ” s a y s B u c a r o “ L o o k f o r s y m m e t r y between what you believe and what the organization that hired you believes ”

Also remember to stay current, since “Societal values and public standards of ethics change over time,” says Bloom To keep up with those changes, she recommends periodic reviews of professional standards, taking more than the minimum requirements for ethics training, using social networks to find forums and groups that discuss ethical issues, and reading up on ethics issues in the news

6. Be proactive

If you do find yourself caught in an ethical bind, the best thing to do is proactively seek out a path to correct or address the problem. According to Bloom, a good strategy is to simply suggest an alternative that you feel more comfortable with.

And if something goes wrong, and you’re responsible, then deal with it immediately. “Don’t let time pass,” says Bucaro. “Be proactive about informing your superiors. Things can often be rectified, but they need to be brought to the organization’s attention immediately. Remember, your reputation and your company’s reputation is at stake.”

Ta k e S t o c k

Identifying your values isn’t always easy, but selfassessment tools like values inventories can be helpful, says Gunsalus. Several free, online worksheets can help to clarify and prioritize your values and determine whether your work life and career goals match your personal principles. Here are just a few:

n lifevaluesinventory org

n careerperfect.com/content/ insight-values -inventory/

n appliedpsychologyresources com

n whatsnext com/content/life -valuesself-assessment-test

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BP Foundation

Daniel Cadigan

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CNH America LLC

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Joseph D'Amico

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Follett Corporation

Carl George

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ICPAS O'Hare Chapter

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Richard Thompson

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$500-$999

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Gary Fish

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William Graf

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Margaret Hunn

Jeffrey Krol

Kathryn McAlpine

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Erwin Ortiz

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Gilda Priebe

Kimberly Rice

John Rogers

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$250-$499

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Amy Egelston

Eileen Felson

Mary Fuller

Russell Holmgren

James Johnston

Trudie Kanter

Wendy Kelly

Jill Loftus

Louis Margner

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Rockoff, Harlan, Rasof Ltd.

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Rozovics & Wojcicki, P.C.

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Mark Schultz

Gerard Swick

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Thomas Winkler

Thomas Zeller

Richard Ziegler

Up to $249

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Anne Adams

Kevin Ake

Angela Allen

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Leanne Berry

Rona Bezman

Ann Biermann

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M. David Cain

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Judith Garber

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Silviano Gomez

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Carrie Stanton

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Donors with a multi-year pledge are recognized for the full amount of their pledge in the first year and for the amount of their pledge installment paid in the remaining years of the pledge. Every attempt was made to acknowledge all donors who have given during this time period. If you note a discrepancy please call (312) 993-0407, ext. 290.

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10 Reasons Why You’ll Want to Be at This Event

On May 31, we’re presenting Be Fearless, our ICPAS Young Professionals Leadership Conference at the Metropolitan Club, Willis Tower, Chicago Here are my top 10 reasons why it’s an event not to be missed (top 11 if you count seeing me there!)

1 Take charge of your career: The theme of this event is how to lead fearlessly That includes knowing how to deal with ethical gray areas, making work/life balance work for you, and navigating your way from junior staff to manager level

2 Meet new people: This conference is about more than professional issues It’s your chance to meet a group of like-minded young professionals, discuss what’s impor tant to you, and even do lunch

3 Gain skills you can apply right away: It’s a no-brainer Making it in the leadership game means learning the right skills soft skills, that is This year’s presenters will give you the insights you need to master those communication hotspots

4 Become more involved: This isn’t a sit-back-and-do-nothing kind of event This is your chance to discuss hot topics and get engaged

5 Increase your value at work: The things you lear n about leadership at this conference and apply at work will get you noticed You’ll shine!

6 Refresh your perspective: You may think that boosting your emotional intelligence is a far-off dream, or that a leadership position lies somewhere over the distant horizon But that’s not necessarily so

7 Build your network: Connections are ever ything in today’s business world And although online connections are easy to make, it’s the face-to-face ones that people remember

8. Invest in your future: The whole point of a leadership conference is to look to the future, and star t working towards a welldefined goal one where you’re in the cor ner office

9. Learn to balance life and work: It’s top of everyone’s list of lofty objectives And while you may think you won’t be able to strike that balance, there are ways to make it happen

10. Have fun it’s Friday! All work and no play well, you know how it goes You’ll have the chance to get to know your peers during the event, and after the event finishes at noon, we’re offering the option of signing up for a group lunch outing

Want to know more? Check out our ad on page 23, visit www icpas org/fearless htm, or call me, Sarah Haight, at 800 993 0407 ext 275

Sarah Haight

ICPAS Member Outreach Manager haights@icpas org

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