Insight Magazine - Winter 2011

take a step in the

right direction

A practice management special issue

Year 2020 in Focus

Strategize for Succession

Software Solution Providers to Know

Meet Big Risks Head On

Save Energy to Save on Costs

Become a Social Media Guru

Get to Know an Attorney

Alternative Investments Reborn

A partner who works as hard as you do.

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

www.icpas.org/insight.htm

322020 Vision

By Derrick Lilly

Small accounting practices are facing a world of change. Are you thinking ahead?

38The Elephant in the Room

By Deborah Lane

Succession is a top priority for today’s CPA firms. So why aren’t they planning for it?

42The Software Principle

By Clare Fitzgerald

A range of powerful yet simple and intuitive applications keep today’s accounting practices humming.

10Tax Decoded The Audit Hour, Pt. 2

By Keith Staats, JD

How to survive an audit—and challenge the results if you have to.

12Forensics Insider The Social Accountant

By Brad Sargent, CPA/CFF, CFE,

CFS, Cr.FA, FABFA

Just how public is your social media-savvy accounting staff?

14Retirement Advisor The Last Mile

By Mark J. Gilbert, CPA/PFS

A how to for advisors working with clients 12 months out from retirement.

16Capitol Report Your Cooperation Required

By Marty Green, Esq.

How will registered tax return preparer requirements impact you?

18Investing In With the Old

By Carolyn Tang Kmet

Increased transparency and decreased investor qualifications are just some of the factors fueling the return to alternative investments.

22Risk

Take Your Own Medicine

By Kristine Blenkhorn Rodriguez

Despite the fact that CPA firms advise clients on risk management, many don’t take their own recommendations to heart.

26Liability A+ Team

By Christine Bockelman

When accountants and attorneys join forces, clients feel the service difference.

28Bottom Line Energy Saver

By Selena Chavis

Cut your utility bill today for increased ROI tomorrow.

30Social Media Follow, Friend, Connect

By Dana Kaye

How to grow your firm in the social media age.

4First Word

A message from the Illinois CPA Society’s President & CEO.

6Seen & Heard

News bytes, sound advice and practical business tips.

46Classifieds

46Advertiser Index

48Volunteer News

The latest from the Illinois CPA Society’s CPAs for the Public Interest.

FIRST WORD

INSIGHT MAGAZINE

Publisher/ICPAS President & CEO Elaine Weiss

Editor-in-Chief/Director of Publications Judy Giannetto

Creative Services Director Gene Levitan

Creative Services Manager Rosa Garcia

Publications Specialist Derrick Lilly

National Sales & Advertising Angie VanGorder

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

P: 800.501.9571 x176 F: 717.825.2171

E: angie.vangorder@theygsgroup.com

Circulation/Member Services Director Carl Siska

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

ICPAS OFFICERS

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

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

Secretary, William P. Graf, CPA Deloitte & Touche LLP

Treasurer, Daniel F. Rahill, CPA, JD KPMG LLP

Immediate Past Chairperson, Sara J. Mikuta, CPA Wifpli LLP

ICPAS BOARD OF DIRECTORS

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

John A. Hepp, PhD, CPA, Grant Thornton LLP

Geralyn R. Hurd, CPA, Crowe Horwath LLP

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

Leif J. Jensen, CPA, Leif Jensen & Associates Ltd.

Kathleen M. Kedrowski, CPA, Navigant Consulting

Michael J. Maffei, CPA, GATX Corp.

Elizabeth A. Murphy, PhD, CPA, DePaul University

Michael J. Pierce, CPA, RSM McGladrey Inc.

J. Bradley Sargent, CPA, Sargent Consulting Group LLC

Edward H. Stassen, CPA, Golden County Food Holdings Inc.

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

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

Beyond the Comfort Zone

Technology allows us to create a world tailored to our specific tastes and interests, whether in music, news and everything in between. These are, for all intents and purposes, our “comfort zones”—the places we know and in which we feel secure and free from today’s clutter and information overload, so we can focus on what we consider truly useful.

Often, ICPAS members build their professional comfort zones around the CPA designation, only to fill it with others who share the same specializations—audit, tax or corporate finance, for example.

But our membership base is actually a diverse group, and opportunities will be missed by not wandering beyond the familiar to make valuable new connections. No matter your specialty, if your business is large or small, public or private, there’s insight to be gained from each other.

Recently, for instance, the Society took a closer look at small practices through a series of forum discussions (turn to our feature on page 32)—a group that accounts for 19 percent (approximately 4,700) of ICPAS members. Understanding what’s happening within this segment is important to the profession generally and to you specifically. For starters, it’s reassuring to know that this group is optimistic about the future. What’s more, it recognizes the need for change. Becoming more niche-focused, improving the integration of business practices with technology, and developing a progressive workforce are top-ofmind for this group. Of course, reinvigorating and promoting the CPA image is also just as important to this group as it is to all of us.

To accomplish our mutual goals, we need to build upon what we’ve learned from this group by connecting with each other. By being a part of the ICPAS LinkedIn Group, for instance, you can start thought-provoking discussions. Or you can get live assistance and share ideas through The Network—a database of volunteer experts—or through our staff subject matter experts, our in-house information and research staff, or our member forums. And don’t forget to stay in-the-know by reading our eNewsletters: Practice Advantage [www.icpas.org/practiceadvantage.htm] for public practice news, Capitol Dispatch [www.icpas.org/capitoldispatch.htm] for the latest regulatory and legislative updates , NewsFlash [www.ccflinfo.org/newsflash.htm] for corporate leaders and CareerSpace [www.icpas.org/careerspace.org] for career and hiring news specifically geared towards CPAs and “the people who hire them.”

Step out of your comfort zone, broaden your perspective and get connected. You’ll be pleasantly surprised by what it adds to your personal and professional success.

Elaine Weiss

INSIGHTis the official magazine of the Illinois CPA Society, 550 W. Jackson, Suite 900, Chicago, IL 60661, USA. Its purpose is to serve as the primary news and information vehicle for some 23,000 CPA members and professional affiliates. Statements or articles of opinion appearing in INSIGHTare not necessarily the views of the Illinois CPA Society. The materials and information contained within INSIGHTare offered as information only and not as practice, financial, accounting, legal or other professional advice. Readers are strongly encouraged to consult with an appropriate professional advisor before acting on the information contained in this publication. It is INSIGHT’s policy not to knowingly accept advertising that discriminates on the basis of race, religion, sex, age or origin. The Illinois CPA Society reserves the right to reject paid advertising that does not meet INSIGHT’s qualifications or that may detract from its professional and ethical standards. The Illinois CPA Society does not necessarily endorse the non-Society resources, services or products that may appear or be referenced within INSIGHT, and makes no representation or warranties about the products or services they may provide or their accuracy or claims. The Illinois CPA Society does not guarantee delivery dates for INSIGHT. The Society disclaims all warranties, express or implied, and assumes no responsibility whatsoever for damages incurred as a result of delays in delivering INSIGHT. INSIGHT(ISSN-1053-8542) is published four times a year, in Spring, Summer, Fall, Winter, by the Illinois CPA Society, 550 W. Jackson, Suite 900, Chicago, IL 60661, USA, 312.993.0393 or 800.993.0393, fax: 312.993.0307. Subscription rates for non-members: $30 US, $40 Canada and international addresses, $42 Mexico. Copyright © 2011. No part of the contents may be reproduced by any means without the written consent of INSIGHT. Permission requests may be sent to: Publications Specialist, at the address above. Periodicals postage paid at Chicago, IL and at additional mailing offices. POSTMASTER: Send address changes to: INSIGHT, Illinois CPA Society, 550 W. Jackson, Suite 900, Chicago, IL 60661, USA.

A MESSAGE FROM THE ILLINOIS CPA SOCIETY PRESIDENT & CEO

No risk? Know risk.

No one can fully predict tomorrow’s risks. But in today’s fundamentally changed investment world, the risks are less foreseeable and more misunderstood than ever — and can cause lasting damage.

We’ve reviewed thousands of investor portfolios and found unexpected risks — and missed opportunities — in 99%.

Wondering if your clients’ portfolios are in the rare 1%? Find out with our complimentary, confidential 2020 Risk Audit. SM

Who’s helping you?

SEENHEARD

&

NEWS BYTES, SOUND ADVICE AND PRACTICAL BUSINESS TIPS

3.5% expected average increase in 2012 starting salaries for finance professionals & accountants

Source: Robert Half 2012 Salary Guide

Employees Pose Threat to Mobile Security

Despite the fact that organizations devote significant resources to protecting their computer networks, employee practices still pose heightened risks to security. A Deloitte [deloitte.com] poll surveying nearly 1,200 US IT and business executives found that 40 percent are unaware of whether their organizations have strategies, policies, procedures or controls in place to enforce mobile security. What’s more, nearly 29 percent believe there are unauthorized PDAs, tablets, or a combination of both, connecting to their enterprise Intranet and email servers. And nearly 87 percent feel that their company is at risk of a cyber attack originating from a mobile security lapse.

IT is Top CFO Priority

A survey conducted by Robert Half Management Resources [roberthalfmr.com] reveals that US CFOs are most likely to commit resources and capital to new or upgraded IT systems (35 percent) in 2012, in addition to developing new products and service lines (21 percent), introducing new locations (14 percent), and pursuing mergers and acquisitions (11 percent). Organizations need to prioritize investments and staffing resources carefully, says Robert Half, which offers advice on the four most common IT investment pitfalls:

One: Cutting corners. Moving too quickly and being overly cost-conscious in the beginning stages may backfire if later upgrades are needed.

Two: Addressing the wrong problem. Make sure the actual system is the issue before launching an upgrade or new implementation.

Three: Overlooking the worst-case scenario. Consult a subject matter expert so you understand the full scope of the project and identify potential blind spots; then adjust plans accordingly.

Four: Relying too heavily on internal staff. Stretching employees too thin can lead to errors, delays and lower morale.

Turnover Rates Set to Rise

FEATURED APP: HD 12c Financial Calculator

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Employee turnover is expected to increase worldwide during the next five years, according to a Right Management [right.com] global survey of more than 2,000 internal and external recruiters, HR execs and hiring managers from 17 countries and more than 20 industries. Fifty-nine percent of North American respondents, 58 percent of Asia-Pacific respondents and 41 percent of European respondents expect higher turnover, compared to only 14 percent globally who anticipate a decline in turnover. In a separate survey of North American workers, greater opportunity for advancement is the number one priority sought by employees in their next position (27 percent), followed by better management (21 percent), a more flexible work environment (21 percent), better compensation (17 percent) and less work pressure (14 percent). 8

90.4 million

Number of US individual investors who owned mutual funds in 2011 (2.6 million less than in 2010). Source: Investment Company Institute

FINRA Urges: Maximize Your 401(k)!

According to the Financial Industry Regulatory Authority’s [www.finra.org] recent study, nearly 30 percent of all US workers do not contribute enough to their 401(k)s in order to receive their full employer match, and an astounding 43 percent of younger workers (20-29 years old) are failing to contribute enough to earn the full match available to them. What’s more, an earlier study showed that 40 percent of employees making less than $40,000 a year fall short of earning their employer's full match.

CR Reporting on the Global Agenda

KPMG’s [www.kpmg.com] International Survey of Corporate Responsibility Reporting 2011 reviewed the reporting trends of each of the Global Fortune 250 (G250), as well as 3,400 companies worldwide, representing leaders in 34 countries and 15 industry sectors. The survey found that 95 precent of G250 companies have undertaken corporate responsibility (CR) reporting, while the 100 largest companies (N100) in each country have increased reporting by 11 percent since 2008—to 64 percent overall. What’s more, nearly half of the G250 companies report a gain in financial value as a result of their CR initiatives. Despite the absence of a regulatory global sustainability reporting standard, the drive for consistency and accessibility to quality data has led 80 percent of the G250 and 69 percent of N100 companies to use the Global Reporting Initiative Sustainability Reporting Guidelines as the go-to standard.

TREND SPOTTER: Renewable Energy in High Demand

According to the latest research from Grant Thornton’s International Business Report [www.grantthornton.com], unrest in the Middle East and North Africa, and its impact on oil prices, has driven increased support for government investments in renewable energies. In the United States (41 percent) and globally (44 percent), businesses are more likely to support increased government investment. What’s more, 55 percent of global respondents said they would accept higher energy costs in the short term in order to reduce reliance on oil and have more stable prices in the longer term.

Serve on an Illinois CPA Society Appointed Committee or Task Force

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

From developing new member services, to upholding quality assurance standards, to responding to technical issues, your service helps to enhance the value of the CPA profession.

Committee & Task Force service is open to all Illinois CPA Society regular and affiliate members. Positions are limited and all requests may not be able to be accommodated.

Visit www.icpas.org/GetInvolved for full descriptions and to apply. APPLICATIONS DUE FEBRUARY 10, 2012.

Questions:

Please contact Kimberly Johnson-Evans at 800-993-0407, ext. 220

Committee & Task Force Opportunities:

Professional Practice

Not-For-Profit Organizations

Regulation & Legislation

Taxation - Business

Taxation - Estate, Gift & Trusts

Taxation - Flow-Through Entities

Taxation - Individual

Taxation - Practice & Procedures

Taxation - State & Local

Quality Assurance & Public Protection

Accounting Principles *

Audit & Assurance Services *

Employee Benefits

Ethics*

Governmental Accounting Executive*

Governmental Report Review

Peer Review Report Acceptance*

Programs/Special Issues

CPA Exam Award Task Force

Outstanding Educator Award Task Force

Outstanding Leadership In Advancing

Diversity Award Task Force

Women’s Executive

Women’s Initiatives Task Force

Young Professionals Group

Education

Conference Planning

Society Operations

Committee Structure & Volunteerism

Finance & Treasury Management

We need you at the table.

The Audit Hour, Pt. 2

How to survive an audit—and challenge its results if you have to.

By Keith Staats, JD

Keith Staats is a senior manager of Grant Thornton’s Chicago-based State & Local Tax practice, having previously served as general counsel of the Illinois Department of Revenue. In this capacity, Keith was involved in the development of tax policy, the evaluation and review of tax-related legislation, and the over-view of tax-related litigation.

So, the day has come. An auditor is sitting in your offices reviewing paper and electronic documents to determine the accuracy of state tax returns. At some point, he or she will request information that may seem irrelevant, unnecessary or unduly burdensome. So how should you respond?

First, know that you have the right to push back if you feel that these requests are inappropriate. Requests to review source documents that form the basis of the tax returns, however, are apt.

You have the right to ask the auditor to justify his or her information requests, and the auditor should be able to explain the reasoning behind those requests and how they relate to the audit. If you disagree with the auditor’s explanation, you should request a consultation with the auditor’s supervisor. Do not, by any means, simply ignore or refuse to comply with information requests without first negotiating with the auditor—unless you’re prepared to deal with the potential consequences.

If you can’t or won’t produce the documentation requested, the auditor can take whatever position he or she wishes to, with the justification that the taxpayer provided no information to disprove it. Remember that the introduction of an audit assessment in an administrative hearing or in court establishes the revenue department prima facie case. It’s then up to the taxpayer to rebut the tax department’s assessment.

What’s more, if you decline to provide the requested information, Illinois sales and use tax law provides that the Illinois Department of Revenue is authorized to demand the documentation in the form of a “60-day letter.” This letter requires the information to be produced within 60 days of its issuance, and if not produced, the taxpayer can’t produce it at a later stage in the audit process or in any subsequent litigation. If you receive a 60day letter, or an auditor is contemplating issuing one, it’s critical to consult with an experienced Illinois tax professional to craft a response.

When the auditor is done gathering information, he or she should advise you of any potential tax deficiencies, and discuss what additional evidence or information could be provided to address any concerns. As a matter of practice, it’s always best to resolve as many issues as possible during the audit as opposed to waiting until an assessment is issued. If discussions with the auditor aren’t fruitful, again, don’t hesitate to involve the supervisor. Of course, consulting an experienced tax professional at this stage may be money well spent. At the audit’s conclusion, the auditor will provide a set of audit work papers, and the Illinois Department will provide a notice of proposed tax liability (sales and use tax) or proposed deficiency (income tax). In Illinois, a taxpayer has 60 days to determine whether to finalize the proposed assessment as agreed and pay the tax; finalize the audit as unagreed and have the auditor issue a protestable notice of tax liability or deficiency; or seek a review

of the audit by the Department’s Informal Conference Board (ICB) prior to the protestable assessment being issued. Whether to go to the ICB is a critical decision to make.

Taxpayers should keep in mind that because the ICB review is a preassessment review, the Department retains the right to raise issues not raised by the original auditor. As a result, it’s possible that a proposed audit assessment could increase. An analysis of such a possibility is an important factor in determining whether to seek ICB review. For the purposes of the review, taxpayers may represent themselves or be represented by any person they choose (including an accountant).

Prior to the hearing, the ICB case is assigned to a conferee, who discusses the case with the taxpayer or representative, and who has the authority to request additional information. A hearing before the ICB is then scheduled. These hearings are informal, are not recorded, and allow the taxpayer or representative to present arguments to the Board and answer any additional questions.

At the hearing’s conclusion the conferee will review the arguments and information presented, and will make a recommendation to the Board. The taxpayer also has the opportunity to offer the ICB a disposition or settlement offer. These offers can be made at any time, although if an offer isn’t made prior to the hearing, it should be made shortly after its conclusion. Notice of the intent to make an offer should be given to the conferee as soon as the determination is made.

Upon receiving the ICB decision the audit division will issue a final protestable notice of tax liability or notice of deficiency. A taxpayer then has the option to either protest the assessment without paying the tax and seek an administrative hearing before the IDOR’s Administrative Hearing Division, or pay the tax, penalty and interest under protest (under the Protest Monies Act) and go directly to Circuit Court.

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The Social Accountant

Just how public is your social media-savvy accounting staff?

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

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

Every new auditor is told this cautionary tale: Two first-years are out of town for a client audit. After the first day’s fieldwork, they retire to a local watering hole. Well-intentioned first-year A tells well-intentioned first-year B, “Hey, did you get a chance to look over the bank recs? They are unbelievably bad. I have no idea who’s in charge of reviewing them, but they must be incompetent!” From there, fueled by strong spirits and weak judgment, the two accountants spend the next 20 minutes discussing their unfavorable opinions of the client. Unbeknownst to them, the client’s CFO (who they didn’t meet) is sitting at the next table and overhears the entire conversation.

Nowadays, this tale is so dated that trying to share it with Millennial accountants would be futile. The new spin would read more like this: A staff auditor arrives at the client site for fieldwork. After a brief tour of the facility, she prepares to get to work. But first, armed with her smart phone, she tweets (@beancounter), “Client has NO SoBe Cherimoya Punch! Mr. Coffee??? Get real.” To add flavor to her insights, she takes a quick snapshot of the client’s Mr. Coffee machine in the break room (client’s name prominently displayed in the background) and posts it along with the tweet. Her BFF, a cost accountant at a private firm, loves this and posts the text and picture to her Facebook account. One of the BFF’s 578 Facebook friends sees the picture and adds some dynamic video effects and music, and suddenly “Mr. Coffee sings I Hate This Place” is on YouTube and going viral.

Now, those of you who need help interpreting this last paragraph should just stop reading. For the rest of you, this is as likely to happen as the example referencing staff in the bar. The client’s grandson spends all day running continuous feeds on YouTube, including tracking mentions of grandpa’s business. He thinks that “Mr. Coffee sings I Hate This Place” is the bomb and can’t believe how cool grandpa has suddenly become. Grandson texts mom, sending the video along with “G-pa is way cuul!!” Eventually, someone shows the client (aka grandpa) the video and after a very brief investigation, the culprit is identified. The accounting firm acts swiftly and within its legal bounds (as any employer would) to summarily terminate the staff member in question for causing the organization and the client untold embarrassment and potentially bad public relations. Seems straightforward enough, right? Not so fast.

Kenneth A. Jenero, Esq., National Business Development partner for Holland & Knight's Labor, Employment & Benefits Practice Group, leader of the practice group's Healthcare & Life Sciences Team, and co-leader of the practice group in the firm's Chicago Office, offers this insight into the legal ramifications: “One area in which social media is rapidly emerging as a major source of litigation is under the National Labor Relations Act (the "NLRA"). Many employers—union and non-union alike—have been hit with unfair labor practice charges filed by employees who were disciplined or discharged for social media communications about the employer's employment policies, supervisors or business practices. In

most cases, the communications are considered by the employer to be derogatory, defamatory, disloyal or otherwise inappropriate. Several of the cases involve the use of profanity or highly unflattering comments when describing the employer or its supervisors. To the employer's great surprise and dismay, many of these comments are considered ‘protected activity’ under the NLRA. And the affected employees are entitled to reinstatement to employment with full back pay.”

Perhaps you’re ahead of the curve on social media and have instituted a progressive workplace social media policy. However, the National Labor Review Board’s (NLRB) general counsel has stated that, "Most of the social media policies that we've been presented are very, very overbroad. They say you can't disparage or criticize the company in any way on social media, and that is not true under the law."

Jenero explains that, “Examples of overly restrictive rules include those prohibiting the posting or discussion of wages or benefits; ‘gossip’ about the company; ‘disparaging, ‘derogatory,’ ‘inappropriate,’ ‘harmful,’ or ‘untrue’ statements about the employer

or its supervisors or managers; disrespectful, rude or offensive conduct; discussions about ‘company business;’ and pictures in any media which depict the company in any way.”

According to Jenero, another growing area of concern in social media is the use of background information gathered during the hiring process. The Equal Employment Opportunity Commission (EEOC) is now focusing on employer use of social media in all types of employment decisions. And, in fact, employers may run the risk of trampling an employee’s rights by using social media as an investigative or monitoring tool.

James F. Hendricks, Esq., partner at Ford & Harrison LLP, focuses on assisting management with labor matters before the NLRB. He also defends employers in charges before the EEOC, the US Department of Labor and various state agencies. He puts the social media issue in these terms: “With the explosion of social media websites (Facebook, Twitter, LinkedIn, etc.), both employers and employees need to be alert to the ever-changing landscape of what is and isn't allowable as jeopardizing

employment relationships. Employers may not want employees griping or trashing the company about terms of employment, but the NLRB is scrutinizing discipline by employers for employee postings on their individual accounts. There have only been two decisions by administrative law judges on discipline of employees for such postings, one against the employer and one upholding the termination of an employee. Employers need to recognize the issues and be aware of this government’s review of company policies, rules and discipline in the social media arena, particularly nonunion employers who are not aware of the NLRB's jurisdiction.“

One thing everyone agrees on is the rapid growth of social media, for both personal and professional use. Social media is the place to share your “message;” the critical issue is how to manage that message and the people in your organization.

Step carefully through this virtual minefield. Consult your attorney if you have specific questions and embrace the “public” face of your accounting staff; don’t ignore this reality until it’s too late.

The Last Mile

A how to for advisors working with clients 12 months out from retirement.

By Mark J. Gilbert, CPA/PFS

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

Arecent national survey indicated that 14 percent of US workers don’t plan to retire. Undoubtedly, the recession and weak economic recovery, coupled with falling home values and investment account balances, has caused that number to increase since 2008. However, this also means that more than 8 in 10 US workers still expect to leave full-time employment at some time in their lives.

And so, with that fact in mind, I’ll share my advice for dealing with the select number of your clients who are less than 12 months away from retirement (individuals I like to refer to as ATRs or “About to Retire” clients).

For ATRs, that 12-months-or-less period is the last push to financially prepare for retirement. It’s the last mile in the marathon, so to speak. A great finish won’t significantly impact everything else they’ve done up to this point, but it will put them in the right frame of mind for retirement. So encourage them to increase their savings and investment contributions, begin to scale back their lifestyle expenses where possible, and think like a retiree.

Here are some other ways to help your ATR clients: Update financial plans For ATRs, the goal is to develop a plan for financial distribution. In my experience, this type of plan is easier for clients at this stage of life to get their hands around and to take ownership of. The projections are more realistic and there are fewer variables outside of their control. By encouraging them to develop this plan, you’ll be helping them better understand their finances and commit to taking control of their financial lives in retirement.

Introduce the Social Security Administration (SSA). Help your clients understand whether to elect to receive benefits as early as age 62 or to defer to as late as 70. The SSA website [www.ssa.gov] offers a wealth of information about computing benefits, elections and administrative matters. SSA personnel in local SSA offices are trained to help ATR clients understand their options. That said, it’s best to independently compute a client’s projected Social Security benefit, especially if he or she is eligible for a benefit based on a spouse’s work record. Seek out a Social Security expert to help in this area if you need to.

Understand your client’s retirement benefit options. Clients may have to make choices about 401(k)s, profit-sharing, defined benefits, deferred compensation, employee stock options, company stocks, “net unrealized appreciation” opportunities and retiree medical benefits. Recognize that conventional wisdom may dictate withdrawing all available funds as soon as possible, but that each client situation is unique

and demands a specialized approach. Encourage your clients to share as much information about their benefits as possible, and develop cohesive recommendations that are both tax smart and financially responsible. In evaluating possible alternatives, a financial distribution plan (described above) can be very helpful.

Don’t forget about Medicare. If your ATR clients are near or at age 65, help them to understand the Medicare program and their costs. They should also realize that a supplemental medical insurance policy can help to cover those medical expenses not paid for by Medicare.

Understand retirement stages. Keep in mind that there are multiple phases of retirement—an early period (start of retirement to age 75), a middle period (age 75 to 85) and a late period (beyond age 85). In the early years of retirement there may not be significant changes in a client’s lifestyle as long as he or she is healthy. However, as time goes by, certain lifestyle activities may fall by the wayside and the costs of these activities correspondingly will fall. That said, they may well be replaced by increased medical or care costs.

Change the investment mindset. In my opinion, ATR clients should invest their portfolios more conservatively now that they are in distribution mode. Certainly, it’s appropriate for these clients to invest somewhat aggressively in order to meet future inflation and tax costs. But many ATR clients have accumulated wealth over a period of time during which they were comfortable with taking on higher-than-average investment risks. They may find it difficult to dial down the level of risk just because they’re approaching retirement.

However, the biggest risk to investing too aggressively is that clients may need to draw down on investment assets precisely at a time when values are down due to a weak stock market. Help your clients to understand that, in early retirement, it’s a better idea to invest more conservatively. As time goes by, it’s appropriate to invest more aggressively because they’re investing for a shorter time horizon.

Check back with me for my spring column in which I’ll share more advice on how to manage the financial needs of clients approaching retirement.

Your Cooperation Required

How will registered tax return preparer requirements impact you?

By Marty Green, Esq.

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

Internal Revenue Service Commissioner Douglas Shulman announced the Registered Tax Return Preparer Initiative at the beginning of 2010, with the multi-phase implementation of four elements: Preparer Tax Identification Numbers (PTINs), Circular 230, continuing education requirements and testing. The goals of the Initiative are to enhance compliance and elevate ethical conduct amongst tax preparers. For the record, licensed CPAs must comply with the PTIN requirements, but are exempt from continuing education and testing requirements.

The IRS issued final regulations in September 2010, requiring paid tax return preparers to obtain and use a PTIN starting with tax returns prepared after December 31, 2010. The IRS recently released IRS Notice 2011-80 to provide preparers with additional clarification and guidance, namely that PTINs must be renewed on a calendar year basis via an online PTIN application or by completing paper Form W-12. The required fee ($64.25 for 2012) must be paid between October 15 and January 1.

A great deal of discussion also has evolved around how applicable the PTIN requirements are to nonsigning preparers. Since each firm’s and non-signing preparer’s circumstance is different, I encourage you to carefully review IRS Notices 2011-6 and 2011-80.

Simply, non-signing preparers who assist in the preparation of substantially all or more of a tax return or claim must register for a PTIN. However, they are exempt from the competency exam and continuing education requirements if the individual is supervised by a Circular 230 practitioner; the supervising Circular 230 practitioner signs the tax return or claim; the individual is employed by the tax preparer’s CPA firm or other recognized firm; and the individual passes the IRS-required tax compliance and suitability checks (when available).

Alternatively, the IRS also has provided for provisional PTINs to prevent disruption of the 2012 filing season. Individuals who are not attorneys, licensed CPAs or enrolled agents and who don’t prepare or assist in the preparation of substantially all or more of any tax return or claim for refund covered under the Form 1040 series may apply for a provisional PTIN (the Registered Tax Preparer Exam will cover the 1040 series). Individuals who obtain a provisional PTIN may retain it until December 31, 2013, but it must be renewed annually and continually maintained.

Many of you have asked me how these new requirements relate to the 2012 CPA licensure requirements (which I covered in the summer issue). In short, the 2012 CPA licensure requirements are separate regulatory requirements.

Licensed CPAs, attorneys, enrolled agents, enrolled retirement plan agents and enrolled actuaries must comply with the PTIN and suitability requirements but are exempt from annual continuing education and competency examination requirements. The registered tax return preparer requirements don’t change the way the IRS treats registered CPAs; Circular 230 has always required CPAs who practice before the IRS to be licensed CPAs, and only licensed CPAs are considered “CPAs” by the IRS. Registered CPAs are treated as registered tax return preparers with limited practice rights, and all testing, compliance checks and annual continuing education requirements must be satisfied.

The IRS is still working on issues relating to fingerprinting requirements, which currently apply to provisional PTIN holders and registered tax return preparers. At this time, attorneys, licensed CPAs and enrolled agents are exempt from the requirements.

The AICPA and other state CPA societies continue to work together to provide the IRS with comments and guidance on the implementation of the Registered Tax Return Preparer Registration Initiative. The Illinois CPA Society has added a dedicated page on the subject, which you can access at www.icpas.org/PTIN. This page includes FAQs on Requirements for Tax Return Preparers, articles from the ICPAS Practice & Procedures Committee, and PTIN News.

I suggest that you review the IRS requirements and FAQs in their entirety. In the meantime, we will continue working with the AICPA, fellow state societies and the IRS to ensure the CPA credential is recognized throughout the process and to provide you with the most current resources available.

In With the Old

Increased transparency and decreased investor qualifications are just some of the factors fueling the return to alternative investments.

By Carolyn Tang Kmet

Modern portfolio theory espouses the need to manage volatility through investment diversification. Traditionally, investors carried this out by investing in companies of various sizes. The thinking was that if large- and mid-cap stocks were down, small-cap stocks would go up. Over the past few years, however, an overall market downturn has seen increased correlation in these asset classes.

“Many years ago, diversification was typically sought through a combination of largecap, mid-cap and small-cap US equity investments, developed international equity, emerging market equity, fixed income and real estate,” explains Scott Warnock, cofounder of financial advisory team Aspinwall Executive Consulting. “Unfortunately, with the exception of fixed income, all of those asset classes had five-year correlations to the large-cap US stock market north of 75 percent.”

In other words, portfolio diversification through traditional assets was no longer working. Investors were no longer experiencing a narrow, managed range of return outcomes, and instead were exposed to the very volatility they were looking to avoid.

“It was at this time that the majority of investment professionals realized that the old meat-and-potatoes asset classes such as stocks, bonds and real estate were too closely correlated with one another to provide meaningful benefits of diversification,” says Alexey Bulankov, CFP, with McCarthy Asset Management. “Like a couple that have been married a long time, they start to resemble each other too much in many respects.”

As a result of this increased volatility within traditional portfolios, alternative investments made their way from the margins to the mainstream. “From 2002 to 2007, it was relatively easy to raise money from investors and performance was good,” recalls Ronen Schwartzman, founder and CEO of Ten Capital Advisors LLC. Back then, he says, the number of hedge funds reached as high as 10,000.

And then, in 2008, everything plummeted. The hedge fund industry had its worst performance year, with the HFRI (Hedge Fund Research Indices) index losing 19 percent. “Many hedge funds lost money and therefore failed to provide hedges or absolute returns to their clients,” Schwartzman explains. “Fraud events such as Madoff and Stanford, as

well as the managers that gated their funds and prevented redemptions or side-pocketed investments, didn’t help the overall alternative space, and as a result many hedge funds were closed.”

Today, however, investor interest in alternative investments (hedge funds, venture capital, commodities, managed futures, currencies and even wine) is again on the rise.

John T. Hague is a partner with McGladrey and Pullen LLP. He is also the firm’s national director of the Alternative Investments and Brokerage Group. He says that alternative investments often provide investors with access to new or different markets, strategies and investment types, diversification of investments to manage market risks, higher returns, reduced volatility and geographic expansion. “The markets have been quite choppy and unpredictable recently, and investors are seeking stable returns with lower market risks,” he explains.

“I think what’s driving this evolution is a desire to find something newer and better than traditional stocks, bonds, CDs and traded REITs,” remarks Adam Koos, CFP, founder and president of Libertas Wealth Management Group. “Investors are sick of making and losing their hard-earned money. In the face of what could turn into a brand new recession, they want safety in diversification and yield, and something that doesn’t correlate with the traditional investments they already own.”

Schwartzman describes a recent trend: Investing in smaller, emerging managers. “The prop desks at the large banks trained some of the best hedge fund managers,” he explains. “Now that the banks are closing their prop desks as they are not allowed to trade any longer, more talented investors are leaving to start their own funds, and some will join existing hedge funds.”

Schwartzman also believes these emerging managers are being lured into the alternative investment market by attractive 2percent management fees and 20-percent performance fees. (He notes that these numbers are general; some managers charge more while others charge less.)

Demand for alternative investments certainly is growing, “We’ve started to see more retail alternative investment products hit the market in the form of mutual funds and ETFs,” says Koos. He notes that the downside to this, however, is the ease with which less sophisticated investors can enter the market. Traditionally, alternative investments were only accessible to high net-worth individuals and institutional investors with large sums of

money due to minimum capital contribution requirements and government regulations. Since minimum requirements have dropped, investors who have $250,000 liquid net worth can now enter the arena.

Additionally, different types of institutional investor are going the alternative route. “Endowments, foundations, trusts and not-for-profit organizations have either entered or increased their investment allocations,” Hague points out. “Once taboo for these entities, there’s a perception that the industry is now professionally managed, regulated and socially acceptable.”

Furthermore, increased transparency in the alternative investment industry has paved the way for increased investment dollars. Several years ago investment advisors tended not to display or disclose their propriety trading strategies. “However, increased regulatory scrutiny, the onset of more competition and the desire to raise investment capital has led to more transparency than ever before,” Warnock reports. “Many managers, who in the past operated as a ‘black box,’ providing no insight into the portfolio’s make-up, are now providing many more details to potential investors, and due diligence teams are reviewing their strategies for new investments.”

Transparency is certainly a key factor for investors exercising their fiduciary duties, and as most alternative asset managers are enhancing their reporting and valuation processes, documents such as the International Private Equity and Venture Capital (IPEV) Valuation Guidelines are on the rise.

“For example, best practice is evolving for alternative asset managers to use an experienced third-party valuation expert to validate valuation estimates and thereby enhance transparency to investors,” says David Larsen, managing director in the Alternative Asset Advisory practice of Duff & Phelps, and a resident in the firm’s San Francisco office.

Warnock adds that the institutionalization of alternative managers has driven transparency even further. “Many alternative investment managers now have extremely well-developed back offices, risk management personnel, compliance departments and more,” he explains. As a result, communication with investors has increased, and advisors and due diligence officers have better access to portfolio managers than ever before.

“Certainly, the combination of more product offerings, fee compression, lower investor qualifications, the institutionalization of alternative managers and more

transparency should lead to growth of the broader alternative investment industry,” Warnock comments.

However, David Nanigian, PhD, an assistant professor of investments at The American College in Bryn Mawr, Pa., feels it’s difficult to determine transparency’s ultimate impact on the growth of the alternative investment market. “On the one hand, an increase in transparency may positively impact growth due to the alleviation of informational asymmetries regarding diversification of portfolio holdings and the funds’ selectivity in capital allocation,” he states. “On the other hand, it may negatively impact growth due to ‘copycatting’ amongst individual investors.”

Schwartzman understands the need for transparency, but says it should be taken in context. “If a long/short equity manager is invested in 60 different securities, I don’t need to know all of them; I care about his top 5 or 10 positions—the ones that drive the performance for the fund.”

Schwartzman also points out that if you have enough capital, then having a separately managed account “gives you 100-percent transparency and the ability to fire the manager whenever you want.”

Warnock warns that while many good products will be created, there are many others that are sure to miss the mark. Further, alternative investments tend to be illiquid, which will cause some investors to shy away. “Liquidity is a major concern with alternatives, so investors need to ensure that the liquidity features of a specific product matches their needs,” says Warnock.

On top of that, “Many investors had nasty surprises in the financial crisis when many funds exercised their rather esoteric authority to suspend redemption requests or only partially honor them,” says Dr. Nanigian.

In light of such outcomes, Nanigian urges investors to exercise due diligence when considering alternative investments. “You should bear in mind that the high reported average returns should be taken with a grain of salt due to voluntary reporting standards,” he says.

Warnock boils it down: “Alternative investments present an opportunity for investors to diversify out of traditional equity holdings. However, investors must be careful to understand what they are selecting as alternative exposure in portfolios ensure the product provides the benefits common among alternative investments, and is not another traditional offering in disguise.”

RISK

Take Your Own Medicine

Despite the fact that CPA firms advise clients on risk management, many don’t take their own recommendations to heart.

By Kristine Blenkhorn Rodriguez

It’s the age-old conundrum of the shoemaker’s children having no shoes. Many small to midsized accounting firms dispense excellent advice to their clients regarding appropriate risk management. Yet, when pressed, a good number will admit they haven’t spent the same amount of time and energy applying risk management principles to their own firms.

Joe Wolfe, assistant vice president of risk control for CNA, the firm that has underwritten the AICPA’s professional liability insurance program for more than 17 years, sees risk management as always important, but particularly so in tough economic times. “Professional liability within the accounting industry is a cyclical business. When the economy deteriorates, malpractice claims usually rise,” he explains.

While good risk management covers the gamut, Charlie Cullinan sees two major areas of current concern due to the faltering economy and newer Public Company Accounting Oversight Board (PCAOB) standards. A professor of accounting at Bryant University, Smithfield, RI, Cullinan cites client portfolio decisions and internal process as key right now.

“In 2004 and 2005 we saw accounting firms shedding a lot of clients due to SarbanesOxley [SOX], mainly due to resource constraints to reduce risk exposure. Now the economy is bad and firms are again taking on larger, more profitable clients who come with more than their fair share of risk. These firms are hungry in a lean economy but not necessarily wise,” he explains.

Gary Eisen’s Frankfort, Ill. firm, Kolodziej, Eisen & Fey, was one of the many that shed clients after SOX passed. “SOX caused us to stop doing audits. We had small clients and small prices, not big clients and big prices, so the additional insurance cost was not worth it for our firm.”

Eisen says he still gets calls for audit work but, “It’s becoming hard to even find people to refer clients to because so many smaller firms have gotten out of the audit business simply because it is an unaffordable risk.”

In terms of internal process, Cullinan cites engagement quality reviews as key. “An engagement quality review partner is supposed to be signing off on audits. This PCAOB standard took effect for all fiscal years after December 15, 2009. You also need that quality review partner as a safety measure to protect the firm.”

Even if a firm reviews its portfolio of clients and ensures appropriate checks throughout, Cullinan stresses it’s simply not enough. “If your employees are critical thinkers rather than checklist lovers, your firm will be better off. Checklist lovers will miss what isn’t spelled out for them. Critical thinkers will usually catch a red flag the first time around.”

When most CPAs think risk management, they think audit. However, CNA’s Ellen VanDeLaarschot, a risk control director, says the assumption that most accounting claims alleging failure to detect fraud arise from audit engagements just isn’t accurate. CNA’s 2010 claims data shows that about half of such claims originated from audit engagements, while the remaining arose from accounting, compilation, review tax and consulting engagements.

“We don’t just look at frequency,” says Wolfe. “We also look at the severity of the claims. Historically the tax area has produced the most claims. Audits, however, have produced the most severe claims, which are costly to litigate and settle. In an economy such as this one, auditors need to be really, really careful because occurrences like bond defaults and underfunded pension plans become more commonplace and can lead to claims from bondholders and pension plan beneficiaries. There’s more to watch out for.” 8

Succession Planning Services

for Illinois CPA Society members

Succession

Who

do I sell to? How

an incredibly difficult decision.

The Illinois CPA Society has teamed up with Transition Advisors to provide you with Project MATS (Mergers, Acquisitions, Transition and Succession), a free, on-demand service for ICPAS members to help you find the best succession path for your firm.

Project MATS provides you with content, advice, consultation, information, case studies and succession services to help preserve the firm that you spent a lifetime building.

Specifically, receive help in:

• Evaluating your practice value

• Understanding the latest succession and merger trends

• Developing a basic plan for growth or succession

• Enhancing your potential to realize financial reward

is

Knowing your options and being able to ask questions in a safe, no fear of commitment, environment can help.

Many accounting firms are likely to experience push back from clients if the report includes a paragraph about the entity’s ability to continue as a going concern, says VanDeLaarschot. “Clients don’t want issues with loans or debt covenants, which may affect their ability to obtain financing or issue bonds if lenders and bonding companies see the going concern paragraph in the report. But we tell our policyholders, ‘If you think you need to include it, include it,’” she explains.

“Many firms think they can’t be sued if they don’t include the going concern paragraph,” Wolfe adds. “But even in a compilation, there is guidance under SSARS to consider the issue and include this if necessary. There likely are third-party users who will claim reliance on the financial statements. So, this is a consideration in compilations as well as audits and reviews.”

Often, it’s the basics that trip up accounting firms. “The biggest issue that comes up over and over again is inadequate documentation of client communication,” says Wolfe. “Any time a CPA engages in communication with a client it needs to be documented in writing. Even if it’s just a quick phone call, you need to get down the substance of the conversation and in sufficient detail so that a disinterested third party can decipher it.”

Engagement letters are another area of lapse. “A lot of CPAs still don’t use them,” says VanDeLaarschot. “Or they’re too general, so the scope of services is unclear and they run into trouble down the road.”

As technology changes the way many professional services firms do business, it should also change their risk management practices. Cullinan references an extreme example, the resignation of BDO Limited (the Hong Kong-based affiliate of BDO International) as auditor of Shanghai-based China-Biotics in June 2011. BDO cited irregularities that were likely “illegal acts,” among them a suspected fake bank website. “The good news is the auditor wasn’t fooled,” says Cullinan. “But 20 years ago this wouldn’t have been an issue. The web has made it all the more complicated.”

Also as a result of changes in technology, Wolfe sees more firms entering the cloud-computing arena. “Most of them read the articles about increased flexibility and applications at your fingertips and they jump.” Which is fine, he says, as long as it’s an educated jump. “Make sure an attorney looks at the agreement before you sign off,” he advises. “If the vendor you contract with gets bought out, who will maintain your firm’s data on that server? Most agreements include indemnification and ‘hold-harmless’ clauses to shift the vendor’s liability, so be careful what you sign.”

Online client portals are becoming de rigueur and are another area for caution, says Wolfe. “Many clients don’t sign the portal agreement, which makes it hard to enforce the terms and conditions of use.” That doesn’t bode well for the accounting firm, he stresses. If you have international clients, it muddies the waters even more due to varying privacy and security laws around the globe.

As with all things in life, preparation is the key. “Ensure there‘s adequate supervision of staff, as well as adequate training. And put some stopgap measures in place,” Wolfe advises. “We see most malpractice claims stem from tax season. A little risk management oversight goes a long way. We see it every day.

“Risk management is a cultural thing, even though most firm owners don’t see it that way,” Cullinan adds. “We’re seeing more from the PCAOB that strongly emphasizes a firm’s culture and how partners are compensated. It needs to be embedded in everyday operations.”

How long

would your

last if your paychecks stopped tomorrow?

savings

?

Your income means more than the numbers written on your paycheck. That’s because your financial future is generally based on your ability to earn an income. But what if a serious car accident led to back injuries? Or your doctor diagnoses cancer and prescribes an aggressive course of radiation and chemotherapy? Or the sudden headache is really a stroke that leaves you unable to work as a financial professional?

They’re all real-life scenarios. And they could easily mean the end of your ability to earn a paycheck as a financial professional.

Without a steady income, how long would your family be able to pay rent or take care of the mortgage? What about car payments? Credit card bills? Utilities like electricity and the phone? What happens to your children’s college education?

Those everyday expenses don’t disappear just because your paycheck stops.

That’s why ICPAS sponsors the Group Disability Income Insurance Plan. Unlike disability coverage offered through an employer or counted as a “business expense” if you own your own firm, benefits through this special program for ICPAS members are generally paid tax-free. 1

Plus, the plan can deliver up to $10,000.00 in benefits every month if you can’t work as a financial professional.(Many other disability plans only pay benefits if you can’t work in ANY job.) Think of it as ICPAS’s way of helping you protect your earning power as a specially trained financial professional.

5 Real-Life Illnesses & Injuries That Can Stop Your Income

You’re not immune from the financial impacts of a disability just because you have a “desk job.”

Take a look at five common medical conditions that are already preventing other professionals from earning an income2:

1.Cancer

2.Back injuries

3.Diabetes

4.Heart attacks, heart disease and stroke

5.Joint, muscle and connective tissue diseases

Your income is too important to leave unprotected. Take a closer look at the ICPAS-sponsored Disability Income Plan today.

LIABILITY

The A+ Team

By Christine Bockelman

Imagine this: You own a boutique CPA firm and decide to clean up the books a little for one of your best clients, who is going through a divorce. So you run an adjustment that adds a couple of hundred thousand to the client’s earnings for the year. Nothing wrong with that, right? Who doesn’t like a little extra money? In this case, your client. Your diligent housekeeping just added an additional $200,000 to his earnings, and now his legal team has to battle the judge to prove it isn’t actual income. Oops.

Here’s what should have happened: You should have told the client to check with his attorney before you touched any of the books. The adjustment in this situation could probably have waited another year or so.

“Accountants can get into trouble when they go into unchartered territory, or areas that are specialized niches,” explains Christiana Zouzias, CPA, a forensic accountant and litigation specialist who is the principal of her own Chicago-based boutique practice, Zouzias & Zouzias Inc.

For accountants in smaller practices without in-house counsel, consulting attorneys are crucial, she says. Consider the seemingly benign example of negotiating a lease. It may seem straightforward enough to run the numbers and read the terms—you are a CPA after all. But you’re not an attorney, which means you may miss some pretty important details.

“Landlords, especially those of a larger building, will put in the lease that they can move clients at any time at the landlords’ cost. An accountant might say okay, that’s fine as long as the landlord is paying. But a lawyer would argue that this is a qualitative factor. You might have an office overlooking trees right now, but with these terms the landlord could move you to an office overlooking a parking lot,” Zouzias explains.

Then there’s every CPA’s worst nightmare: Being censured or barred from practice.

“The regulatory environment CPAs are currently operating within is very technical,” says Carlton Marcyan, CPA/CFA, an attorney at Lake Forest, Ill.-based Schiller DuCanto & Fleck LLP. “In many instances the accountant doesn’t even realize that he or she is subject to regulation.”

When accountants and attorneys join forces, clients feel the service difference.

Let’s say your firm doesn’t deal with public companies. It might be safe to assume, then, that you wouldn’t have to deal with the Public Company Accounting Oversight Board (PCAOB). Wrong again.

“If your client is a broker-dealer, then you, his accountant, may certainly be subject to the PCAOB,” Marcyan explains.

To avoid getting into trouble, Marcyan recommends having good legal counsel continuously monitor cases and readily at hand to clue you in on new rules and regulations. “You need to have legal counsel to remind you and your firm of potential risk and how to avoid it,” he says.

Consider your own estate plan. Have you thought about succession? Are you going to pass the business, most likely the source of your net worth, onto your children when the time comes to retire? What if one of them doesn’t want to be involved in the firm? How do you divide it up? What about your partners?

“You get the very basics of succession planning in your accounting classes and from studying for the CPA Exam, but it’s definitely a specialized niche,” Zouzias explains. “As a CPA, you want to be sure you have picked up the phone and talked to an estate-planning attorney so you know about any possible complications.”

And that’s just one example. Small firms and sole practitioners also have to face the legalities of payroll taxes, hiring, and an onslaught of other key areas.

“Accountants tend to get so bogged down in the numbers that they don’t sit down to form a plan for themselves,” says Edward J. Schoen, Jr., PC, CPA and attorney, and the current president of the Illinois Chapter of the American Association of Attorneys/CPAs. “It’s a huge problem if you pass away, there is a divorce, or anytime you have a business with someone else.”

Planning ahead and having on-call legal counsel has great benefits for the overall health of your practice. “It’s usually a bad idea to wait until the last minute to go to the doctor with something that’s bothering you,” says Marcyan. “Suddenly, your doctor could send you to hospital where you find out the little thing that was bothering you is something much more serious. These days in medicine it’s about preventative care. The same is true for accountants. Stay healthy by doing the right things in the beginning. Maybe you don’t need a lawyer today, but you might need one soon.”

It’s better to already know a lawyer you can trust than to have to scramble to find one—not only for your own legal needs, but also for those of your clients. If one of them asks you for a legal recommendation, it’s going to look rather unprofessional if you can’t suggest anyone.

“Having a list of referrals for your clients can help to build your net worth,” Schoen explains. “They will refer clients to you, you will refer clients to them. It’s very beneficial. Clients call me all the time, saying they have a legal issue like divorce. Do I know anyone? Yes, I know someone who does it. You lose some credibility as a professional if you can’t name someone your client could call for help, or at least point them in the direction of someone you trust.”

Start off with legal publications or contact the Illinois Chapter of the American Association of Attorneys/CPAs, which has a listserv connected to all its members for easy access to various specialists. Just be sure to narrow down your search to attorneys with expertise that fits your particular needs.

“In accounting there are lots of specialties like tax, forensics and auditing. The same is true with attorneys,” Marcyan explains. “And just like accounting, you are always better off going to a lawyer with specific expertise.”

This is where networking comes in. If the attorney you regularly consult with doesn’t specialize in an area where you need some advice, say divorce, ask whom he or she would recommend. Attend professional association events as an easy means to access the social and professional circles necessary. Or access the Litigation Services Consulting section of the The NETWORK [www.icpas.org], a group of Illinois CPA Society members who have agreed to share their expertise with fellow Society members.

“It’s always better to have a recommendation from another accountant or someone you’ve met at a conference or networking event than to blindly pick someone out of the phone book,” says Schoen. Once you know a few good attorneys, they will know a few good attorneys, and so on and so on.

Putting it all in bottom-line terms, Zouzias explains that, “It would be such a shame to be a boutique firm, providing white-glove service to your clients, holding their hands and spending a lot of time with them, and then slip up because you didn’t consult an attorney on something you thought you could handle yourself.”

BOTTOM LINE

Energy Saver

Cut your utility bill today for increased ROI tomorrow.

By Selena Chavis

When executives at Chicago-based accounting firm Frost, Ruttenberg and Rothblatt, P.C. decided to undergo an energy audit, the end result was a 10percent overall savings on the firm’s energy bill.

And while some small to midsized accounting firms may feel that 10 percent isn’t worth the initial investment of hard-to-find time and money, savvy executives know that the ability to cut operational costs is absolutely crucial to success today. “Anywhere you can reduce costs and still maintain a certain level of service is extremely important in today’s economy,” explains Jeff Singer, officer and director with Frost, Ruttenberg and Rothblatt.

As a firm that rents its office space, as many small and midsized firms do, Frost, Ruttenberg and Rothblatt is limited in what it can do to control energy costs from an infrastructure and equipment perspective. However, Ira Holtzman, principal with Lower Electric, an energy consulting firm in Northbrook, Ill., points out that, as a deregulated state for electric and gas supply, Illinois companies are ideally positioned to take advantage of competitive utility rates.

“We provide our clients with the necessary knowledge to choose the lowest-cost, highest-quality utility supplier possible,” Holtzman explains. “Companies have the ability to choose an alternate provider.”

Natural gas was deregulated in the 1980s and electricity in 1999. Electric rates, however, were frozen until January 2007. After the freeze expired, rates increased substantially. This change in regulation also inspired the growth of companies like Lower Electric, which represents retail energy suppliers of natural gas and electricity to offer competitive pricing. “If a company is with ComEd and paying 8 cents per kWh, we offer an opportunity for them to lock into a rate that will save them 10 to 30 percent,” Holtzman explains. “We shop against that 8 cents rate. One of the easiest things a company can do to save energy costs is pay less.”

Opportunities to save on energy go far beyond an energy audit, however. Peoples Gas Natural Gas Savings Program, for example, provides business customers with the incentive to make energy-efficient improvements.

Through a partnership with ComEd, small businesses that use less than 60,000 therms of natural gas and less than 100 kilowatts of electricity annually are eligible to receive: Free onsite energy assessments, along with free installation of compact fluorescent light bulbs, efficient faucet aerators and showerheads, and vending machine controls, as applicable; financial assistance (up to 70 percent of cost) for steam trap repairs/replacements, boiler tune-ups, programmable thermostats and furnace tune-ups; and rebates for the purchase and installation of new boilers, furnaces, condensing unit heaters and water heaters.

“Using energy efficiency to produce a kWh or a therm is much cheaper than building new production,” notes Paige Finnegan, senior program manager for the Peoples Gas & North Shore Gas Natural Gas Savings Program, implemented by Franklin Energy Services

LLC. To this end, the program offers a small-business energy assessment, during which, “We go in and look at the low-hanging fruit— those low-cost strategies that can help to reduce energy use, such as best practices for lighting or a furnace tune-up,” says Finnegan. “Those usually provide great return on investment in as little as 6 to 18 months,” she says, “which is really compelling.” Higher-level facility assessments also are offered. These take major infrastructure changes such as upgrades to windows and boilers into consideration and usually have much longer paybacks (5-plus years).

Awareness is the first step, says Finnegan. “Companies need assistance in thinking about where energy is being used and ways to make changes without affecting employee productivity.”

Behavior changes, in fact, are one of the most basic ways to reduce energy costs. Peoples Gas Natural Gas Savings Program offers these tips:

Optimize power by turning things off. For every 1,000 kWh that is saved by turning things off, a company can save $100 on its annual utility bill, assuming average electricity costs of 10 cents per kWh. Lights, computers and other office equipment (such as copy and fax machines) tend to have the biggest impacts.

Significant energy savings also can be achieved by simply verifying that power management settings are enabled on individual computers and monitors, forcing them to enter sleep mode after a specified period of inactivity. Power management settings can cut a computer’s electricity use roughly in half, saving from $25 to $75 annually per computer. In the case of equipment that can’t be turned off, companies should ensure equipment is set to the lowest energy-use level possible.

Furthermore, leaving items such as coffee pots, computer speakers and radios plugged in when not in use can make up roughly 10 percent of an average electricity bill. Power strips are an easy way to switch off all these energy wasters at the end of the day. Beware of energy hogs. Looking beyond the cube, some permanent fixtures of the office landscape can zap your energy supply in a hurry. For instance, refrigerated vending machines typically operate 24/7, using 2,500 to 4,400 kWh a year and adding to cooling loads in the spaces they occupy. Timers or occupancy sensors can translate into significant savings since they allow the machines to turn on only when a customer is present or when the compressor has to run to maintain the product at the desired temperature.

What’s more, the average office water cooler consumes about 800 kWh a year. Because much of this energy is from standby losses, a simple method of cutting energy waste is to attach a timer. Programming an office water cooler to operate only for 10 hours a day, 5 days a week, can significantly reduce waste.

Monitor heating/cooling systems. Keep your thermostat settings consistent during work hours—68 degrees in the winter and 78 degrees in the summer. Replace or clean air filters, ducts and vents regularly to prevent your heating and cooling systems from working harder than they need to. Probably the simplest policy: Encourage employees to dress for the weather; add or remove layers before reaching for the thermostat.

Control the flow. You can safely lower hot water temperatures in restrooms and employee lounges to, say, 110 to 120 degrees to save on energy costs. Also, if you’re aware of the drip, drip, drip of a leaky water fixture or toilet, make fixing the problem a priority. Inaction can waste gallons of water over a very short period.

Notice of Search For Candidates For Appointment As Auditor General State of Illinois

The Legislative Audit Commission will accept applications from persons who wish to be considered for appointment as the Auditor General of the State of Illinois. The Auditor General is a constitutional officer charged with the audit of the public funds of the State.

Applicants must be experienced and competent in governmental auditing, financial management or government operation and knowledgeable of state government. The current salary is $149,004.

After screening and interviews, the Commission will recommend a candidate(s) to the General Assembly for appointment to a ten-year term. An affirmative vote of three-fifths of the members of each House of the General Assembly is required for appointment. The term of the present Auditor General will expire in August 2012. State law permits, and the incumbent is seeking, reappointment.

Submit a letter of application and resume postmarked no later than January 31, 2012 to:

Legislative Audit Commission 622 Stratton Building Springfield, Illinois 62706 or AuditCommission@ilga.gov

Follow, Friend, Connect

How to grow your firm in the social media age.

By Dana Kaye

Eight Tips for Social Media Success

1. Observe first. Connect with other accounting firms, etc., and see which posts pique your interest.

2. Be authentic. Don’t be afraid to use your own voice. And don’t use posts as sales pitches.

3. Have a conversation. Encourage interaction and discourse among your connections and followers.

4. Post at irregular hours. If you only post during business hours, you’ll only reach half your audience.

5. Use dinner party etiquette. Avoid talking about controversial topics such as religion and politics.

6. Focus. There should be a reason for each item you post. Avoid comments like “Happy Tuesday!”

7. Don’t worry about the terminology. If you don’t know how to use hashtags, @ replies and photo tagging, then simply don’t use them.

8.Mix it up. Post photos, link to articles and suggest other people to follow. If you want people to revisit your page, you have to keep it fresh.

There’s no denying that social media is the wave of the future, but the terms “tweeting” and “friending” still make most CPAs cringe. From building your client base to finding your newest hot hire, however, social media is a necessity for businesses in all walks of life—including accounting.

The daunting part isn’t understanding social media’s indispensability in a business context; it’s understanding how you, specifically, as a CPA, should use it to best advantage. True enough, there are millions of people using Twitter, Facebook and LinkedIn (and the numbers are rapidly growing), but how do you connect with them? And how do you transition your followers, friends and connections into clients?

Content is the key to every social media campaign. Your tweets, your Facebook posts, your LinkedIn page, your photos and links, all will establish your “brand” and indirectly market your services. If your firm specializes in small-business accounting, for example, post links to new tax exemptions for smallbusiness owners. If your firm focuses on nonprofits, showcase nonprofit organizations on your Facebook and LinkedIn pages and post snippets of advice to this market on Twitter. Demonstrate what you do and why you’re good at it.

Once you’ve established a strong social media presence, the next step is to interact with potential clients. Twitter allows you to perform a keyword search, which will help you to locate users who share common interests. During the first half of April, for example, everyone is posting about taxes. Run a search and you may find tweets such as, “Trying to figure out which meals can be considered tax deductions” or “Thinking I’ll need to file an extension on my taxes.” You can respond, perhaps with, “If you’re self-employed, you can deduct any meal where you took someone out and spoke about business” and “If you owe money, don’t forget you’ll need to submit a payment.” Connect with neighboring businesses and your local chamber of commerce on Facebook and LinkedIn. And connect with your existing clients and post to their walls so their friends see your input.

Sound like a lot of work? The good news is you don’t have to spend all day every day making your social media presence known. The most time-consuming part is actually setting up Twitter, Facebook and LinkedIn accounts. Once you have those, you need to dedicate only an hour or less a day to social media. Make it a part of your routine. Hop online first thing in the morning or sign in during your lunch hour. Post a few items, interact with one or two people and find a new page to

“like.” That’s all it takes. You can also use websites like HootSuite (hootsuite.com) and software like TweetDeck (tweetdeck.com) to update your social media sites from one location, schedule posts ahead of time, and monitor your searches, mentions and messages.

Once people find you or your firm on Facebook, LinkedIn or Twitter, they won’t necessarily call you for a consultation, but they’ll very likely do some additional research. References and reviews play a key role in a person’s decision to hire you, so make sure your online platforms boast positive feedback.

There are dozens of review sites, but the primary ones are Yelp.com, LinkedIn, and the reviews tab on your Facebook page. The easiest way to garner more reviews across these platforms is to offer your existing clients incentives to write a review of your services. You can offer a free consultation or a certain percentage off for every review they post, for example. If your clients have LinkedIn profiles or Yelp pages, you can offer them a review swap. You could also host a contest; say, each review represents one entry to win tickets to a sporting event, a restaurant gift certificate, or a complimentary tax return. Most people won’t take time out of their busy schedules to write an online review unless they have an incentive to do so.

By regularly posting content to Twitter and Facebook, keeping your LinkedIn content up-to-date, interacting with your online following, and building a base of positive reviews, you will expand your social media footprint. People will find you with relative ease, your name recognition will increase, and you’ll reinforce your firm’s positive brand.

Visit the ICPAS on Facebook, Twitter, LinkedIn and YouTube today!

2020 VISION

By Derrick Lilly

Small accounting practices are facing a world of change. Are you thinking ahead?

“How we adapt and change will determine whether or not we succeed in the future.”

As the calendar year rolls over to 2012 and new economic challenges continue to surface, itʼs easy to get caught up in the here and now—and, for some, even Mayan doomsday prophecies. But if December 21, 2012 turns out to be just another day of business-as-usual, a strategy for your small firmʼs future will become something of an imperative, albeit an often overlooked one.

Since October 2010, the Illinois CPA Societyʼs Strategic Planning Committee has hosted a number of small practice forums around the state. The objective of these Future of the Small Firm in 2020 forums is to gain invaluable insight into the trends and challenges most likely to impact small firm partners and sole practitioners now and over the next 5 to 10 years. Additionally, the forums help to identify the competencies and resources that will be needed in order to succeed.

As it turns out, despite todayʼs hazy conditions, predictions for the small firm of 2020 are abundant and bright.

A New Landscape

If one word could sum up the forum participants’ outlook to date it would be “optimistic.” Despite current headwinds, there’s little to no doubt that small firms will be standing strong in 2020. One participant even predicted that, “Midsized firms will get squeezed out, resulting in more business for both small and large firms.” In fact, most participants expect their firms to either exist as they are or be more successful.

Anticipating marketplace improvements, forum participants predicted that aggressive merger and acquisition activity would be the key to growth for some, and the key to survival for others.

In either case, the landscape for small firms is bound to change, and those that remain dedicated to their small stature and mission, while also being committed to evolving with the times, will be in a good position to thrive. To do so, the successful small firm of tomorrow will need to think like a featherweight fighter: Be nimble, lean, adaptable and increasingly specialized.

“How we adapt and change will determine whether or not we succeed in the future,” stresses Thomas M. McGreal, CPA, of McGreal & Company PC.

For starters, the mentality that small firms can do all things for all clients will become outdated. In fact, forum participants continually stated that the unrelenting pace of change, glut of regulations and complexity of standards would force small firms to reassess their abilities and services, and to move towards a niche model.

“You can no longer be all things to all people,” says Michael Radencich, CPA/MST, of Trimarco, Radencich, Schwartz & Mrazek LLC. “Small firms and sole practitioners will have to self-assess and focus on what they do best. When you’re trying to do too much you become a jack-of-all-trades but a master of none.”

Simply put, “boutique” is replacing “big box,” and putting this concept into practice is how small firms are expected to outshine larger firms and avoid competition over commoditized transactional services. Overall, participants predicted that focusing core services on top areas such as wealth management, M&As and forensics will prove most successful. Other high-ranking areas include business valuation, IT security consulting, litigation, regulatory compliance and specialized tax planning.

A shift to “niche” may leave some clients wanting or needing more, however.

“Our number one responsibility is to service our clients. Since all firms have limitations, it’s important to build a referral network of highly regarded professionals inside as well as outside the accounting profession to share expertise, ideas and business,” says Radencich.

The key word here is “sharing.” That doesn’t mean clientpoaching, but rather connecting with the right partners to give clients access to the breadth of services they may be demanding.

Ultimately, participants felt that a robust referral network would increase value in their clients’ eyes and drive growth now and in the years to come. Think: “The more you know, the more you grow.”

Teaming With Technology

Technology will continue to be another game-changer for small practices. As one participant emphasized, “Virtual is going to be bigger than big.” And the pace of change shows no sign of slowing.

With the accelerating adoption of technologies like interactive websites, client portals, social media, cloud-computing, paperless document management, video & teleconferencing, and other mobile solutions, small practices are realizing that fewer people can do more work in less time.

In turn, we’re witnessing a departure from traditional hourly billing. As small practices rapidly increase their efficiencies, “value billing” or fixed-price project billing is growing at an equal pace. According to forum participants moving in this direction, such billing models will become staples in small firm revenue growth.

Paul Ziliak, CPA, partner at xkzero, suggests that fixed-price project fees allow clients the comfort of knowing exactly what they are buying, how much they are paying for it, and if or when they’ll have to pay more. Additionally, firms can generate more revenue; client retention should increase as they no longer fall victim to “billing fatigue”; and staff will be more empowered and motivated to perform.

“Our fixed-price model has been an undeniable catalyst for growth, and any small firm can implement these kinds of changes if they commit to a shift in thinking,” says Ziliak, whose ERP solutions consulting practice has seen consistent increases in revenues, profits, and staff and client retention since abandoning traditional timesheets.

Services for Our Public Practice Members

Public Practice Cen ter [www. ic p as or g/p ublic ]: The Illinois CPA Society’s new Public Practice Center provides small and midsized practitioners with a one-stop-shop of free and easy-to-access tools needed to achieve practice excellence. These include Technical Resources, Quality Assurance & Education Offerings, and Practice Management Essentials. Plus, live help is available from the Research Specialist, The NETWORK volunteers and ICPAS staff subject matter experts.

Mar k eting T ool k it [www. ic p as or g/mar k etingtool k it ]: Created specifically for sole practitioners and small firms, the Toolkit provides free, customizable marketing resources such as sample press releases, print ads and posters, as well as a wealth of information on how to best promote business development. You can also sign up to share your expertise as a contact for the media at www.icpas.org/MediaContact.

Successio n Pla nn i ng [www. ic p as or g/successio n]: Launched by the ICPAS in conjunction with Transition Advisors, Project MATS (Merger, Acquisition, Transition and Succession) is an on-demand service providing advice, consultation, information, case studies and succession services at no cost to ICPAS members. This service is dedicated to helping members understand their practice value, gain knowledge of current trends, develop a basic succession plan, and enhance their potential for financial reward.

Practice Adva n ta g e [www. ic p as or g/p racticea d va n ta ge .h tm ]: This eNewsletter, published twice a month, provides timely news and resources to help public practitioners and firms navigate and succeed in the ever-changing public accounting world. Key features include technical accounting and auditing guidance, IRS briefs, Taxation Committee reports and practice management articles.

Hourly timesheets aren’t the only thing being scrapped. The progression towards paperless offices is a trend that many forum participants believe will become the rule rather than the exception.

“Getting rid of the paper has been a godsend for the firms that have already done so,” says Kathleen Orlando, CPA, of Kathleen Orlando and Associates Inc. “Creating and storing searchable electronic documents has led to space savings, cost reductions, better organization and a newfound ability to quickly navigate complex files. It’s absolutely amazing.”

Security concerns, however, are a sticking point for many. CPAs can’t afford to jeopardize the “Trusted Business Advisor” label, and therefore many are slow to adopt emerging technologies that control sensitive client data.

But the simple fact of the matter is, no matter if confidential data is stored in-house or in “the cloud,” a CPA who is vigilant about maximizing security will be able to minimize risk. Participants pointed to data encryption, security systems, password-protection protocols, and secure shredding solutions as only a few of the many ways CPAs can protect their data and reputations while transitioning to a more technologically advanced practice.

The potential for revenue growth and increased efficiencies simply cannot be ignored, especially when technology is also aiding the rapid expansion of the client base. The ability to securely access realtime data anytime, anywhere with today’s mobile devices in essence allows professionals to be available to their clients 24/7—meaning borders and time zones no longer apply.

“Implementing mobile, networking and other virtual technologies gives the small firm a big opportunity to compete with large firms because the limitations of location are eliminated,” says McGreal. “I’m finding that more of our clients are spread across the country. I’ll call some of my broker clients thinking they’re downtown at the Board of Trade when they’re really remotely trading from their condos in Florida.”

Strategic Staffing

In a similar fashion, technology has a clear role in altering the staffing landscape.

First, participants predict staff sizes will shrink or remain relatively unchanged. “Because of technology and how small firms are adapting to it, they don’t need more people to take on more work,” says McGreal, adding that he doesn’t think his staff levels will increase even though revenues and billable hours likely will.

Second, firms are expected to become more flexible with work arrangements than ever before. The practi-

cality of mobile and remote access solutions accompanied by increasing employee demands for greater work/life balance are driving firms to reevaluate the effectiveness of traditional schedules and structures—and, in turn, flexibility is becoming a significant recruiting and retention tool.

“Small firms are particularly well suited to accommodate telecommuting employees and flexible schedules. It adds versatility and allows employees to remain productive even when they aren’t in the office,” says William J. Duffner, CPA, of Duffner & Company PC. “Allowing remote work and accommodating employees when emergencies or conflicts arise is also great for morale; they feel like the employer is concerned about them.”

However, firms shouldn’t get too caught up in the mentality of, “As long as the client is taken care of, it doesn’t matter where you work,” cautions John W. Currier, CPA. “If remote work is excessive, the firm risks having employees lose connections with co-workers and clients, and lack developing teamwork and interpersonal skills.”

Further concerns over managing, motivating and mentoring a seldom seen staff have many leaders on the fence, but, Duffner emphasizes, “The fact of the matter is, employees can be as unproductive or productive as they want whether they’re sitting in the office or in their family room.”

To find a balance and mitigate abuse, Duffner suggests developing a clear framework for measuring and monitoring offsite productivity and accountability, and clearly communicating expectations in relation to face-time with clients and the balance between onsite and remote work arrangements.

Of course, most importantly, small firms need to recruit and retain staff members who mesh with their culture and are committed to their success. The challenge is preventing the emerging cracks in the talent pipeline from impacting small firms. Besides a perceived shortage of new graduates, CPAs with one to five years of experience aren’t bringing the skill sets to the table that firm leaders expect.

What’s more, the conflicting values and expectations of the different generations inhabiting today’s workplace are presenting more recruiting and retention challenges than ever before. Participants overwhelmingly expressed struggles in finding and mentoring young professionals with the skills and character to succeed at the partner level.

“The most difficult person to find out there is the one with a fire in their belly, ready and wanting to go out and do something with their career,” explains Duffner. “We need more intuitive problem-solvers and proactive candidates who want to move up and make partner.”

One roadblock to successful hiring and mentoring may be firm leaders themselves. “CPAs from the Baby Boomer generation and before take a lot of pride in ownership, having their names on their doors and business cards, and being defined by their careers. However, Gen Y will not be defined by their work, and that just doesn’t compute with our generations,” explains Brad Sargent, CPA, of the Sargent Consulting Group, member of the ICPAS Board of Directors, chair of the Strategic Planning Committee, INSIGHT Magazine fraud columnist, and moderator of the small practice forums. “It’s very hard for us to relate to that because it’s just not our way.”

In fact, Baby Boomer forum participants repeatedly stated that they’re at a loss with younger generations and are unable to con-

nect with them on a meaningful level. Yet they struggle to justify changing their own set ways. More often than not, they measure the value, productivity and character of young professionals against themselves and the norms and values of the Baby Boomer generation; disappointment quickly ensues.

The truth is that common ground must be found in order to successfully move forward. Conformity stunts progression and the firm that fails to evolve with future generations won’t have a future at all. Each generation needs to work smoothly with the other to master new skills and identify ways to succeed as one team. After all, young CPAs are the future of the profession—and their peers are future clients. What’s more, they’ll be key players in many succession plans—a frightening fact for many Baby Boomers nearing retirement.

Struggles With Succession

“I am my firm and my firm is me” is a sentiment shared by many small firm owners. The practices they’ve built through years of hard work and sacrifice are their livelihoods. For many, they’re also their ticket to retirement.

Not surprisingly, participants vocalized that plans to pass off the reins or shutter their doors are hard to swallow, and most intend to put succession planning off for as long as possible. Unfortunately, delayed succession planning has its consequences and frequently limits options for a successful transition.

“You see yourself pushing 60 and thinking, ‘Well, we always advise our clients not to sell when they have to, sell before so there’s time to find the right people,’ but we aren’t even doing that ourselves,” said one participant (who prefers to remain anonymous). Like many of his peers, he and his partners are struggling to weigh the pros and cons of a sale or merger, or continuation of the firm under new leadership. “There’s a lot to talk about. When we look at the bullet points we really don’t know where to even begin.”

Other participants admitted to being in more challenging positions. One closer to retirement shared that he didn’t have a plan or the staff to take over his firm. In that situation, a quick sale has appeal, but without the proper time to prepare, a “fair” offer could be hard to find.

“Most practitioners are guilty of thinking that their practices are worth much more than what people are actually willing to pay in this market,” said another participant. “And none of us know what future valuations will be.”

Many participants simply see themselves working in a reduced capacity. Some say they’ll retire but remain a consultant to the firm. Others hope to remain an active employee with reduced hours and responsibilities after being bought out. Then there are some who plainly state that they’ll work heavily for as long as possible to support family finances and to fund some sort of retirement when they’re finally unable to work any longer. Simply put, most are struggling to navigate the path to a successful transition and comfortable retirement. (Turn to the next page for more on the topic of succession.)

All in all, whether your firm’s path is nearing its end or just approaching its first bend, you have to lay a lot of groundwork to successfully navigate the forks, bumps and detours in the road ahead.

the elephant in the room

Succession is a top priority for today’s CPA firms. So why aren’t they planning for it?

By Deborah Lane

In a recent WealthStar Alliance survey, 94 percent of accounting firm partners named succession strategy building as a top priority. Yet only 31 percent said they have a plan in place—a statistic that’s particularly perplexing given the fact that, according to a 2011 survey by The Rosenberg Associates, consultants to the CPA profession, more than 60 percent of CPA firm partners are over the age of 50.

What’s holding the process back?

“Most small and midsized firms spend all their time getting charge hours and working ‘in’ the business. Most firms figure the succession thing will simply take care of itself,” says Charles Hylan, shareholder with The Growth Partnership, which offers marketing and skills training to accounting professionals.

“Most firms start succession planning when it’s too late. Succession should begin three to five years before the partner leaves,” says Jim Metlzer, vice president of small firm interests for the American Institute of Certified Public Accountants (AICPA). “And in medium-sized firms, succession planning should start the day they become partner.”

Quite frankly, says Marc Rosenberg, CPA, of The Rosenberg Associates, “Good succession planning is the same thing as good practice management. Since good practice management should be done on day one, so should succession planning, even if your partners haven’t hit age 50 yet.”

There’s more than a lack of time at play, however. “Life change is scary, especially in a one- or two-partner firm where you are the master of your own domain. To some, retirement equals death. Accountants talk to their clients about retirement but they haven’t thought about it for themselves,” explains Joel Sinkin, president of Transition Advisors, which recently teamed up with the Illinois CPA Society to provide Project MATS [www.icpas.org/succession], a free, on-demand service for members in need of succession planning help (see sidebar).

But succession isn’t solely about retirement. “What about the unexpected? What about the sudden death or disability of a partner? This can put a firm right out of business,” Metlzer warns.

“It’s like the Boy Scouts’ motto—be prepared. It’s as simple as that. Things do and will change over time, but you need a starting point, even if it’s a practice continuation agreement with a fellow CPA or firm,” explains Robert Fligel, president of RF Resources, which specializes in M&A, partner search and consulting services for CPA firms.

For those ready to focus on succession planning, here’s a basic how-to.

Groom Your Successor

Succession planning is “about leadership development programs and practices, especially mentoring programs, and effective recruiting and training,” says Rosenberg. “Firms need to make proactive efforts to develop their staff members into leaders and future partners. Many CPA firm partners erroneously believe their staff either ‘have it or they don’t.’ They think back to when they were young (if they can remember that long ago) and say, ‘no one helped me become partner.’”

Ditch the stroll down memory lane and instead treat every new hire as a possible successor. “Train them throughout their careers and when they become managers they should have basic skills to be an owner in the firm,” says Rita Keller of Keller Advisors, specializing in CPA firm management.

“Continually give younger accountants more challenging work. Partners need to push down work and managers need to push work down. In most firms, partners are doing manager work and managers are doing senior work and seniors and below are looking for work,” she says.

A good managing partner transition starts three years from the date the incumbent steps down. “Three years out, the firm announces the new MP. Two years out, the new MP assumes perhaps half of the incumbent’s MP duties. And one year out, the new

MP takes on all of the incumbent’s duties, with the former MP assuming a MP-emeritus role,” says Rosenberg. “This three-year period gives the incoming MP a nice period of time to reduce his/her client base to make time for his/her duties, and also gives the new MP an opportunity to gradually assume the MP role under the tutelage of the incumbent.”

Clients are truly the firm’s clients versus the partner’s clients, says Rosenberg. Clients should be “institutionalized.” In other words, they should be serviced by multiple firm personnel instead of being joined at the hip to a specific partner. This makes a client less likely to leave the firm if their key provider suddenly leaves. “Another nice thing about client institutionalization is that the need for client transition efforts due to retirement, withdrawal or illness are greatly reduced because successors are automatically in place,” says Rosenberg.

“Let the client get acclimated to the new person while you are still there. Let the client see you working shoulder to shoulder together,” Sinkin advises.

What’s more, have a specific plan that includes timetables and actions required, and get unanimous buy-in from the partner group. There must be a fair and rational process for bringing in new partners (ownership, buy-in, compensation, etc.), Rosenberg adds. The buyout plan should not come across to the younger partners as a Ponzi scheme (a plan in which younger people keep paying money in with nothing left to pay out to them).

Take the Merger Route

For many, though, the exit strategy is a merger. “Merger activity is at a record high,” says Metzler. The pace isn’t expected to slow down between now and 2017; it will become a buyer’s market.

A merger, however, takes major orchestration. “Too many mergers are done because one firm ‘fell in love’ with another firm, or one firm has known the other for 20 years or more and fails to ask the right questions. Mergers that are done without asking the right questions and performing the requisite due diligence are either doomed to fail or will be painful, at the least,” Rosenberg cautions.

What’s the key to merger success? Have a process from A to Z prepared, in writing. Before you talk to your first merger candidate decide, again in writing, what the parameters of an ideal firm are and what the deal-breakers and non-negotiables are. If you’re a smaller firm merging with a larger firm, understand with crystal clarity what will be expected of you and how the success of the merger will be measured.

“A merger is not magic; it’s a lot of work, especially once the honeymoon is over,” says Metlzer. “Don’t underestimate the importance of cultural fit. How will you retain clients, what will be the new firm’s service philosophy?” he asks.

Simply put, “If you are merging with a firm where the partners do not share your values, vision, strategies or process, it will most likely fail,” says David Bergstein, CPA, director of strategic relationships for consulting firm CCH.

Ninety-five percent of the success is chemistry. “If that’s questionable, look for a different merger partner. If in doubt or if you have to compromise too much about any significant parts of the deal, don’t do it,” Fligel stresses.

Assess Your Acquisition Worth

Another succession strategy is to sell the practice, which fundamentally differs from merging since you won’t be working with the successors for very long. Instead, your focus will be on maximizing the sale price and payout you receive.

FACTORS THAT COMPLICATE SUCCESSION PLANNING

A reluctant retiree

“What if a partner wants to continue working beyond the firm’s mandatory retirement age and the firm is trying to get the retiring partner to transition their clients to a younger partner?” asks Koltin. “You need a defined retirement date for partners. If there is no mandatory retirement date (or at least a date by which to sell your shares or equity interest), partners will continue working as long as they want to.

A bumpy transition

“Exiting partners can fail when it comes to transitioning their books of business to young partners. Sometimes it could be the fault of the firm, in that it doesn’t have adequate service providers to take over the partner’s book of business. More frequently, the retiring partner has the mindset that no-one else can service the client as

First thing, value your practice objectively by bringing in a third party to give you a realistic assessment. “I find too often a lot of ego and emotion is poured into how one sees the value of one’s practice, and having an independent advisor can go a long way to bridging the gap between what an individual thinks their practice is worth and what a third-party is willing to pay,” says Allan Koltin, CPA and CEO of Koltin Consulting Group in Chicago.

Consider, too, that for some period before the sale you’ll need to rein in investments and expenses, making the firm more profitable in the short-term, and therefore of greater worth to the ultimate acquirer, Koltin explains.

What’s more, “It helps to think of what your clients will do when you sell because most payout agreements relate to the ‘stickiness’ of the clients. If clients leave the successor firm, your payout decreases,” says Bergstein.

First and foremost, put the plan in writing. At least once a year revisit the plan to see if the firm is on track with its objectives, and update the plan contents where needed. As part of the process, make accountability a priority.

“Even at firms that have plans for practice development, mentoring and management, there is little partner accountability. So

well as they can and determines that no-one else in the firm can handle the client from a succession standpoint. I’ve said to retirement-minded practitioners, ‘If you are hit by a car tomorrow or won the state lottery, I guarantee you someone else in the firm (or outside the firm) could step up and service the client.’ Bottom line—we’re all replaceable,” says Koltin.

A failure to mentor

Most small and midsized firms allocate the lion’s share of the firm’s income based on traditional production measures such as book of business and billable hours. Firms virtually ignore staff development and mentoring when setting their partners’ compensation, says Rosenberg. “It’s no wonder that partners don’t devote much time to practices geared to effective succession planning,” he adds.

important succession-planning practices don’t get done because there are no consequences to partners who neglect their non-production responsibilities,” Rosenberg explains.

To address this issue, “I am seeing more firms put a clause into their succession-planning document that would penalize a retiring partner for not ‘doing their part’ to successfully transition clients and keep them at the firm,” says Koltin. “Clearly, attaching some dollars to succession (whether it is to current or future compensation) will go a long way in getting a partner’s attention.”

It’s a daunting task—and it’s human nature to avoid daunting tasks. However, the consequences of leaving succession to chance can be devastating. “You risk having your firm fall apart and no revenue coming in when you retire. I have seen cases of sole practitioners not providing for their families because they didn’t have a succession plan in place. When they unexpectedly died, clients were left to scatter because the staff was unprepared to deal with the situation,” says Bergstein.

But what typically happens if succession isn’t addressed, Koltin warns, is “a slow death, with the last person standing turning out the lights on the last day of the firm’s existence.”

Project MATS to the Rescue: The Illinois CPA Society and Transition Advisors have collaborated to create Project MATS (Merger, Acquisition, Transition and Succession), an on-demand service that provides advice, consultation, information, case studies and succession services at no cost to ICPAS members. Visitwww.icpas.org/succession today for more information on this service.

The Software Principle

A range of powerful yet simple and intuitive applications keep today’s accounting practices humming.

By Clare Fitzgerald

It’s a crowded, competitive field when it comes to practice management solutions, especially in the realm of tax software, invoicing and time-tracking, document management and data security. To stand out, the following companies know that their products need to be simple, intuitive and easy to use— no matter how technologically complex or innovative their solutions are on the back end.

Always-on-the-go accounting and tax professionals need powerful, well-supported tools and secure access to client information anywhere, anytime, whether it’s late nights at home or busy days on the road. Applications that help practices improve workflow, capture more billable hours and spend more time servicing their clients are in high demand—and the options are endless.

Here are just a few.

TAX SOFTWARE

Drake Software [www.drakesoftware.com]

Drake Software is used by more than 30,000 tax professionals nationwide, processes more than 15 million federal- and stateaccepted returns each year, and has earned multiple Readers’ Choice Awards from CPA Practice Advisor

In addition to electronic filing capabilities, Drake features all federal and state tax packages. The company also offers tax-planning and compliance tools, document management and storage, business development tools and a “client write-up” accounting package. What’s more, Drake recently acquired the Copanion GruntWorx product line—a paperless tax workflow system.

“This is an important move for Drake,” states John Sapp, vice president of Strategic Development. “GruntWorx allows us to rapidly expand our offerings into the cutting-edge document automation technology arena. This enables us to provide tax professionals with a true end-to-end paperless tax solution and deliver extremely high accuracy rates.”

PitBullTax Software [www.pitbulltax.com]

PitBullTax Software is designed specifically for tax representatives handling IRS collection cases. According to Irina Bobrova, chief operating officer, PitBullTax is one of the few software companies currently catering to this niche.

“Handling IRS collection cases is very tedious and time-consuming work, but our web-based tax resolution software is designed to help tax representatives prepare successful packages,” she explains. “PitBullTax offers several tools that allow tax professionals to analyze a case and find out what possible resolutions exist for that scenario.”

PitBullTax Software is especially useful in preparing complicated cases such as an Offer in Compromise. The software can analyze what a client may be eligible for, price the case and help the tax professional complete the necessary IRS forms.

“Our software guides tax professionals from A to Z and gives them more control over their clients’ cases,” says Bobrova. She notes that PitBullTax empowers tax professionals who previously might have shied away from IRS collection cases to take on these lucrative engagements.

Some of PitBullTax’s product offerings include an evaluation tool that uses client financial information to determine a preliminary Offer in Compromise outcome and the most advantageous payment plan; a workflow tool that provides 12 questions to help users identify the best course of action for each client's individual set of circumstances; and a fee tax calculator that lists services used in IRS collection resolution cases and suggests a range of minimum and ideal fees for each.

TaxWorks [www.taxworks.com]

Focused on making tax preparation quick and easy, TaxWorks is a division of RedGear Technologies, a family of companies providing tax, accounting and paperless office solutions.

Among TaxWorks’ many features is a web-based E-File Center, which enables users to print bank product checks and review a client’s real-time status from any location with an Internet con-

nection; conduct real-time calculation to instantly view form totals before printing; access a fixed asset manager providing 60 methods to calculate depreciation; access a client management interface that includes a client database and client instruction letter; enjoy complete network compatibility so that all tax professionals in a firm can access a system simultaneously; and access to the TaxWorks Institute, an online library of tax research articles providing answers to tough tax questions.

TIME TRACKING, BILLING & INVOICING

FreshBooks [www.freshbooks.com]

Created to minimize billing hassles and allow users to easily track their time and billing online, FreshBooks, which has over 3 million users, is a natural fit for accounting professionals—and many of their clients.

Jody Padar, CEO and principal at Arlington Heights, Ill.-based New Vision CPA Group, suggests FreshBooks to clients as an invoicing tool. “The reason it’s so great is because it’s so simple,” she says. “Clients can’t screw it up, and as the CPA, you can watch what they’re doing and keep control of the back end.”

FreshBooks allows small businesses to easily create invoices, which can be sent via email with the click of a mouse. Once a client receives an invoice, he or she can pay it online via PayPal or credit card. This means that small businesses can see exactly when clients receive, view and pay their invoices.

Office Tools Professional [www.officetoolspro.com]

Designed to help business owners streamline administration, Office Tools Professional boasts more than 10,000 users in the accounting industry.

The software was developed by looking at the whole office as one unit, says President Michael Giardina. “Rather than just creating an application to fulfill a need, we took a look at what was going on in firms and how we could have a real effect on their practice management,” he explains.

Instead of flipping back and forth between folders and applications, Office Tools Professional users can work from one application to track documents, view their calendars, set up appointments, see what their staff members are working on, review project progress, and more. By doing so, Giardina says Office Tools Professional can save office staff a half hour to an hour per day in productivity.

“Owners and administrators love it because it’s so cohesive,” he says. “They can spend more time on client service and less time on administration.”

The company uses Microsoft technologies and offers practice management resources such as project and time tracking, billing reports, digital notepads, real-time assignment review, activity lists, conferences and training courses, and more.

Credenza Software [www.credenzasoft.com]

Credenza Software’s guiding principle is to design software from the professional down, not the software up. “Our software provides an organizational model for the way a professional prac-

tice runs,” explains Ron Collins, company president. “It organizes a CPA practice really tightly.”

Credenza expands Microsoft Outlook by adding practice management resources. “So many people already use Microsoft Outlook, and our products add another layer of functionality. You don’t have to change; you just add,” says Collins.

Users can organize their calendar, tasks, email, documents, research, phone calls, notes, billable time, and more according to their client matter files or projects. Features such as the timeentry assistant flags anything not recorded as a time entry, ensuring users bill for all pertinent activities.

Credenza Basic is available for free while Credenza Pro is subscribed to on a monthly basis. The Credenza Pro upgraded version also provides integrated billing and the ability to share information with other users.

Wellspring Software [www.wellspringsoftware.com]

Wellspring Software makes “check printing easier, less expensive and more secure,” says company president Stu Neale. “We have a simple product, and service is our number one priority. You can have a great product, but if it’s not supported, it’s worthless. When people need service, they really need it, and support is really important to us.”

Wellspring’s PrintBoss software package started out with checks but has expanded the distribution side of the printing process to enable customers to mail, email, fax and archive documents. The software offers document distribution capabilities and prints checks or deposit slips anywhere on a network. PrintBoss also offers different interfaces that integrate and stay up-todate with 38 accounting software packages. And it doesn’t require any additional keystrokes.

“You only use the keystrokes required in your accounting software system, and like magic, your check appears in your printer,” says Neale.

DATA SECURITY

ShareFile [www.sharefile.com]

Efficient file sharing is critical for accounting practices, but maintaining the security and confidentiality of those files is even more critical.

ShareFile allows users to create a custom-branded, passwordprotected space in which to easily and securely exchange business files with clients—eliminating the need to copy files to flash drives and CDs. The ShareFile product includes a series of Power Tools for email, desktop and seamless software integration, and also functions as a client portal, allowing users to post electronic versions of past tax returns and other data so their clients can access it at any time.

While ShareFile provides more than 30 customized industry solutions, its ShareFile for Accountants offers secure file-sharing and storage solutions specifically for small to midsized accounting firms (custom solutions also can be created for larger firms).

According to ShareFile for Accountants Director Laura Ivey, users can securely transfer files such as tax documents, QuickBooks files and Excel spreadsheets that are either too large or

too confidential to send by email. “Accounting firms need to protect themselves and their clients, and our solutions allow them to do that,” she notes.

Above all, says Ivey, customer support takes precedence at ShareFile. All customers are assigned a dedicated account manager to assist them with training and support, and ShareFile customer support is also extended to clients of ShareFile customers.

eFileCabinet Inc. [www.efilecabinet.com]

eFileCabinet was founded 10 years ago by a CPA who noticed how much time he and his staff spent going back and forth to their file cabinets. Hoping to use that time more productively, he hired software developers to create a digital filing system for his office. The software they developed ended up saving two hours per employee per day. When requests for the software from other CPAs started rolling in, eFileCabinet, a provider of enterprise content management solutions, was born.

Today, 60 percent of eFileCabinet’s clients are CPAs and other financial professionals, says COO Jeff Coulter. “We offer many features at a competitive price point, giving small to medium practices the tools to compete with the big guys.”

eFileCabinet’s electronic document management solutions are designed to help organizations capture, manage and protect their data—eliminating the need for costly storage space. The company offers tools for regulatory compliance, document retention, file versioning, and more, and its user interface is designed to mimic a real file cabinet. “Our software makes intuitive sense for the people who are using it,” says Coulter.

eFileCabinet is offered as a traditional client/server-based software application and in an online cloud-based version. The company is also developing a self-service model, which will enable users to do everything from installation to troubleshooting themselves. “We want our users to be able to do everything on their own, but we offer full support if they need help,” he adds.

Additional eFileCabinet product offerings include eFileCabinet Desktop, an electronic document management (EDM) solution to store and manage business documents; eFileCabinet Online, a hosted EDM solution; SecureDrawer, a client portal/ file sharing service; and Concentsus, an online back-up service to protect documents via a secure, online repository.

Papersave [www.papersave.com]

PaperSave provides users with all the benefits of a paperless office environment, including faster and easier audits. “Accountants love it when their clients use Papersave because the audits go so quickly and so well,” says Holly Condon, VP of sales and marketing.

PaperSave enables users to store more than 200,000 documents in 40 gigabytes—eliminating space constraints, reducing data entry and allowing supporting information to be readily on hand when needed. Financial transaction documents can be quickly distributed and Papersave automatically matches documents.

Papersave operates two divisions: Papersave Pro is designed for larger entities with more sophisticated content-management needs and offers seamless integration with Microsoft Dynamics and Blackbaud; Papersave Plus is geared towards small-business solutions.

Lookatour DNA

WeareKUTCHINS,ROBBINS &DIAMOND,LTD.,agrowing SchaumburgIllinoisfullservice CPAfirm.Comemeetwithusto hearfirst-handabouthowweare

Different, Newand Attractive–our DNA .

Different Handsonresponsibility/Consistent firmgrowth/No“killerhours”

New Entrepreneurialspirit/ Highlycomputerized/internetbased software (state-of-the-artequipment) / Charitableinvolvementatbothfirm andindividuallevels

A ttractive Friendlyworkenvironmentwithgood workspace/Fullystockedkitchen yeararound/Greatbenefitsand compensationpackage

Wehaveopeningsinouraudit andtaxdepartmentsforthe rightprofessionalswithtwo ormoreyearsofexperience.

Contact: AlKutchins,CPA

847-240-1040x135

akutchins@krdcpas.com

SuccessfulSchaumburg CPAfirmwantstoexplore opportunitieswithsmaller CPAfirmsandindividual practitioners,retiringor thriving,tohelpthem continuetheirlegacy andinsuretherealization offinancialsuccess.

KRD,afullserviceCPAfirm focusesonfamilyowned andcloselyheldbusinesses, andhighnetworthindividuals.

VALUATION OF YOUR CLIENT’S BUSINESS OR PRACTICE

By: Crandall & Brackett, Ltd. 630. 653.7922

email:

robert@crandall-brackett.com

Web: www.crandall-brackett.com

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

National Pension Partners – Equity Out, Premium Financing Program Available for Professionals (CPA’s, Dentist, Veterinarians, Physicians and Pharmacist) A big question looms for many small business owners. How to fund for their retirement prior to the business sale? Our “Equity Out Premium Financing Program” may be the way to go. Certain business owners can obtain a loan to fund their pension from specific lenders without disturbing cash flow. A defined benefit pension plan allows tax deductible contributions of $150,000 to $200,000 or more, depending on age and salary. Contact: John Vogel, ChFC, AIF 847 304 1869 John.vogel@lpl.com www.nationalpensions.com

FREE brochure – How to Establish Your Fees.

Practical tips for accountants who want to improve their fee structure. Call Mostad & Christensen at (800) 654-1654 or go to: www.mostad.com/ kc/ ss

PAGEADVERTISER ONLINE

KUTCHINS,ROBBINS MERGER/SALES ADVERTISER INDEX [www.icpas.org/advertiserindex.htm] Visit these websitesfor more informationon the services and products provided by advertisers featured in this issue of INSIGHT. 11 ADP Small Business Services accountant.adp.com 11 Accounting Practice Sales accountingpracticesales.com 21 Alliant Credit Union alliantcreditunion.org/ilcpa 8 Audimation Services Inc. audimation.com 5 BNY Melon bnymellon.com/truth 3 Garelli Wong/Jackson Wabash garelliwong.com 1 Harris harrisbank.com/redframe 27 Herbert H. Landy Insurance Agency landy.com 29 Legislative Audit Commission ilga.gov 29 Lower Electric lowerelectric.com 25 Marsh personal-plans.com/icpas 7 PNC Financial pnc.com/cfo Inside Front Cover Robert Half International roberthalf.com/salarycenter 24 Transition Advisors transitionadvisors.com 19 University of Illinois mastersintax.com 13 Webfilings webfilings.com/icpas

“Helpingour clientsachieve financialsuccess through soundadvice.”

We are a 65 person full service CPA firm that would like to discuss purchasing and/or merging with your firm. We have completed 15 such transactions over the past 30 years. Please contact me at earlh@msco.net to begin building our future together.

Thank you, Earl Holtzman

Michael Silver & Company

5750 Old Orchard Road Suite 200 Skokie, IL 60077 847 982-0333 www.msco.net

BUY OR SELL AN ACCOUNTING OR TAX PRACTICE

PRACTICES FOR SALE: Schaumburg Area CPA Practice gross $229K; Springfield Area CPA Audit Only Practice gross $200K; Lombard CPA Practice gross $206K; Macomb Tax & Bookkeeping Practice gross $76K; Peoria Tax & Accounting Practice gross $407K; Rochelle CPA Practice gross $110K; Orland Park Tax & Accounting Practice gross $404K; La Salle County Accounting & Tax Practice gross $118K; Kankakee County CPA Practice gross $250K; SE Missouri CPA Firm gross $750K. For practice details, call 1-800-3970249. Or, visit us at www.accountingpracticesales.com to inquire about available opportunities and register for free email updates.

THINKING OF SELLING YOUR PRACTICE?

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

Ready

Thinking About Selling

OFFICE

SPACE for RENT

200 S. Wacker Drive

Up to 4 furnished offices available with /without secretarial space in attractive suite of established law firm. Great space with large windows and abundant natural light in a recently remodeled building. Perfect for solo/small law firm or accounting practice. Near Metra and CTA trains, major expressways and court houses. Full time reception services, conference rooms, kitchen, and copier.

Reasonable rent.

Contact: kgrieco@tishlerwald.com.

ACCOUNTING OPPORTUNITY

Small CPA firm with many high earning clients located in Buffalo Grove looking to bring in a Junior CPA for future partnership. My goal is to possibly retire in approximately 10 years. Please respond only if you have an established client base. bonnie@fischmancpa.com

upcoming events

corporate finance professionals

executive education

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

February 9, 2012 | Chicago, IL

conference

Controllers Conference

March 15, 2012 | Rosemont, IL

executive education

Tax Planning and Reporting for a Privately-Held Company and Its Owners

February 22, 2012 | Chicago, IL

making your life easier | www.CCFLinfo.org

The Illinois CPA Society’s

VOLUNTEERNEWS

THE LATEST FROM THE ILLINOIS CPA SOCIETY’S CPAS FOR THE PUBIC INTEREST

2011 CPA Day of Service a Great Success!

On September 23, 2011, more than 1,100 volunteers from 90 communities across Illinois made an impact on 159 organizations in need. Volunteers sorted and packed food, cared for shelter animals, helped to raise funds and awareness for important causes, and assisted in the beautification of their communities, to name just a few of the many activities from the day. Winners of our Photo Contest are featured here. To see the rest of the photo entries, visit the ICPAS Volunteer Chronicles blog at www.icpasvolunteerchronicles.typepad.com.

Winter & Spring Volunteer Opportunities

CPAs are uniquely qualified to give Illinois families the helping hand they need during these challenging economic times. The Illinois CPA Society (ICPAS) has assembled a variety of volunteer opportunities to help you help others this tax season. (Tax preparation experience is not required, and training is provided.)

Military Tax Preparation Project: Serve those who serve our country by preparing federal and state income tax returns for deployed and recently returned soldiers in Illinois. The ICPAS provides orientation materials and IRS resources specific to military service.

Low-Income Tax Preparation: Make a difference in the lives of individuals and families in Illinois by volunteering as a tax preparer at Volunteer Income Tax Assistance (VITA) sites across the state.

College Financial Aid Application

Assistance: Help students at Chicago Public Schools to find the funding they need to go to college by assisting them with the challenging FAFSA form. ICPAS volunteers, in partnership with the Ladder Up organization, will help students and their parents accurately navigate this important process.

FOR MORE INFORMATION on these and other volunteer programs, visit us online at www.icpas.org/Volunteer.

Group Winner: E.C. Ortiz at Feed My Starving Children in Naperville

Individual Winner: Bill Bucki with the Knights of Columbus Spaghetti Dinner Fundraiser

POSSIBLE

The CPA Endowment Fund of Illinois inspires, supports and rewards accounting students and young professionals through various scholarship and professional development opportunities. Support the future of your profession. Donate today!

www.icpas.org/endowment.htm