MACPA Statement // January 2013

MACPA’S

STATEMENT January 2013 | Maryland Association of Certified Public Accountants, Inc.

GENERATION

DON’T JUST KEEP UP WITH CHANGE. BLOW IT AWAY. PAGE10

4 generations, 1 workforce

STRATEGIC OPPORTUNITY There’s a lot that separates the generations. There’s even more that brings them together. Those who cross the gap will win. PAGE 8

Prepare your business for the changing landscape of employee benefits and reform

WE WILL GUIDE YOU every step of the way

control costs Helping employers control health plan insurance costs, the RJP team delivers effective benefits programs and provides integrated benefits administration/management support. • Strategic Benefits Planning • Regulatory Compliance | Health Care Reform • Human Resources Support • Online Enrollment | HRIS | Payroll • Corporate Wellness Solutions • Custom Benefits Communications • Retirement Plan Services

reform

RJP will guide you through Health Care Reform to help you understand what actions you need to take and how the laws will affect your business. We offer a customized cost impact analysis to help you start making changes now that will position your company for the future. The Health Care Reform cost impact analysis is free for MACPA members and your clients.

RJP & Associates, Inc. is the MACPA’s preferred provider for employee benefits and HR services.

Richard J. Princinsky & Associates, Inc. Employee Benefits Specialist www.rjpassociates.com 410.773.4300 | 800.618.2600 | rjp@rjpassociates.com

Bring SPF. Take CPE. macpa.org/beachretreat2013

July 2,3,5 | Ocean City, MD - Clarion Hotel Fontainebleau FEATURED SPEAKERS: Frank Ryan, Tom Hood, & Jody Padar

Sponsored by:

Don’t blink.

Fast-paced, innovative, influential, interactive talks to move your career forward.

INNOVATION SUMMIT THE CPA EVENT OF THE YEAR.

800.782.2036 | May 17th | Martin’s West | Event ID: 191008 Sponsored by:

macpa.org/2013summit

CONTENTS January 2013 | Maryland Association of Certified Public Accountants, Inc.

CHAIR’S COLUMN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FEATURES

Four Generations, One Workforce = Strategic Opportunity . . . . . . . . . . . . . . . . . . . . . . .8 Don’t just keep up with change. Blow it away. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

DEPARTMENTS News & Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Practice Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Tax Corner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Accounting & Auditing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Business & Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 High Tech Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

MEMBER NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 NYPN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 CLASSIFIEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 ADMINISTRATION

PRODUCT DEVELOPMENT

Amy Stumme amy@macpa.org

Akesha Brown akesha@macpa.org

Becky Conley becky@macpa.org

Debbie Zizwarek debbie@macpa.org

TECHNOLOGY

TECHNICAL SERVICES

Doug Shaner doug@macpa.org

MaryBeth Halpern marybeth@macpa.org

COMMUNICATIONS

Cora Edwards cora@macpa.org

Amy Moran amym@macpa.org Bill Sheridan bill@macpa.org FINANCE Margaret DeRoose margaret@macpa.org

PROFESSIONAL DEVELOPMENT Dee Sullivan dee@macpa.org Pamela C. Devine pam@macpa.org

Donna Lewis donna@macpa.org Ryan Wey ryan@macpa.org

DIRECTORS Samantha Bowling, CPA Lisa Cines, CPA

Amy Puente amyp@macpa.org

Shane Grady, CPA

Paige Sawicki paige@macpa.org

Michael Manspeaker, CPA

Meredith Senio meredith@macpa.org

Kara King Bess, CPA Joselin R. Martin, CPA Amy Myers, CPA

Laura Dorsey-Shaner laura@macpa.org

Robert Tarola, CPA

Andrew Hood andrew@macpa.org

SENIOR STAFF

2012-2013 BOARD OF DIRECTORS

Bill Sheridan MACPA Dulaney Center II 901 Dulaney Valley Road Suite 710 Towson, MD 21204 For content submission: bill@macpa.org feedback@macpa.org P: 410.296.6250 F: 410.296.8713 Toll free: 800.782.2036

J. Thomas Hood III, CPA tom@macpa.org

Chris Dougherty chrisd@macpa.org

Anoop N. Mehta, CPA, Chair

MEMBER SERVICES

MaryBeth Drusano marybethd@macpa.org

MACPA DEPUTY EXECUTIVE DIRECTOR

Byron K. Patrick, CPA.CITP, MCSE, Incoming Chair

Julianne Part julianne@macpa.org

Jared Feinstein jared@macpa.org

Jacqueline E. G. Brown jackie@macpa.org

Marianela del Pino-Rivera, CPA, Secretary/Treasurer

Jeannie Richardson jeannie@macpa.org

Megan Gratz megan@macpa.org

DIRECTOR OF FINANCE AND ADMINISTRATION

Allen P. DeLeon, CPA, PFS, Immediate Past Chair

Ashlee Stem ashlee@macpa.org

Emily Trott emily@macpa.org

Skip Falatko, CPA skip@macpa.org

JANUARY 2013

See below to submit content

MACPA EXECUTIVE DIRECTOR

OFFICERS

Laura Swann, CPA lauras@macpa.org

WE WANT TO HEAR FROM YOU!

The MACPA reserves the right to edit all submissions for grammatical style and / or length. Statement of fact and opinion are made by the authors alone and do not imply an opinion on the part of the officers or members of MACPA. The Statement is published four times a year by the Maryland Association of Certified Public Accountants, Inc. Bill Sheridan, Editor Amy Moran, Advertising Sales

LEADERSHIP for all seasons 2013

Business & Industry C O N F E R E N C E April 19 Turf Valley Resort & Conference Center | Event ID:121011

macpa.org/businessindustry2013 Sponsored by:

What is the Business Learning Institute? BACK IN THE DAY

But, in TODAY'S

CPAs were successful by keeping up with technical skills.

ENVIRONMENT

CPAs have more responsibilities, more demands, and more complexities in the workplace.

2.0

WHAT ARE THE LEADERSHIP PROFICIENCIES CPAS MUST LEARN TO SUCCEED?

THE SUCCESSFUL CPA OF THE FUTURE must have these skills, attributes, and qualities â&#x20AC;&#x201C; technical proficiencies and leadership proficiencies: UP TO DATE ON THE CUTTING EDGE TOPICS

Communication & Collaboration

Strategy Development

Future Thinking

UNDERSTANDS STRATEGY COMMUNICATES WELL HAS HIGH ETHICAL STANDARDS

Leadership

ABLE TO LEAD

Ethics

COLLABORATES WITH OTHERS

THE BUSINESS LEARNING INSTITUTE BRINGS THESE SKILLS TO YOUR TEAM VIA THE FOLLOWING LEARNING FORMATS:

Seminars

Keynote Speakers

On-site Training

Leadership Academy & Future Forums

Webcasts/ On-demand

BUSINESS LEARNING INSTITUTE

901 Dulaney Valley Road | Suite 710 | Towson, MD 21204 1.888.481.3500 www.bizlearning.net

The MACPA helps its members connect, protect, and achieve in their careers. We created The Business Learning Institute to help our members develop the skills that will maximize their career trajectories. Accounting skills are no longer enough. Our members will thrive as they master strategic perspectives and skillsets and grow to become leaders.

TO SEE THE ENTIRE COURSE LISTING OF WINTER/SPRING 2013 BUSINESS LEARNING INSTITUTE COURSES VISIT

MA CPA . O RG/B I Z L EAR N IN G

MARYLAND ASSOCIATION OF CPAs

901 Dulaney Valley Road | Suite 710 | Towson, MD 21204 1.800.782.2036 www.macpa.org

CONNECT / PROTECT / ACHIEVE

CHAIR’S COLUMN LESSON FROM THE FISCAL CLIFF: STAY DILIGENT

BY ANOOP N. MEHTA, CPA, CGMA VICE PRESIDENT AND CFO, SCIENCE SYSTEMS AND APPLICATIONS, INC.

It’s been getting a little hot in here, hasn’t it, tax pros? Tax season is breathing down our necks, and our elected officials have been making us jump through “fiscal cliff” hoops every step of the way as we try to understand what our tax laws will look like for the upcoming filing season. It’s been a little hard to plan – and help our clients plan – for tax season while we waited for the rules to be finalized, hasn’t it? Consider this excerpt from a recent U.S. News and World Report article: “’It’s especially hard this year because we don’t know exactly what the rules will be come next year,’ says Edward Karl, vice president of taxation at the American Institute of CPAs. ‘I think the big priority this year is to stay connected to the news and follow developments over the lame-duck session to try to make final decisions.’

Wells Fargo / Gallup Small Business Index. “Of the 607 small-business owners interviewed by telephone from Nov. 12-16, 28 percent described their situation as ‘somewhat’ or ‘very’ poor … an 8 percent increase over the previous quarter,” CFO.com reported. “Business owners who navigated through the Great Recession now face more uncharted territory created by ongoing uncertainty in Washington,” said Marc Bernstein, head of small business for Wells Fargo. “These owners know that potential federal government spending cuts and tax changes can create a ripple effect, hitting the pocketbooks of consumers and reducing spending that could hit small businesses hard.” The bottom line is this: There’s still a lot of economic uncertainty out there, our elected officials are still trying to figure out what to do about it, and we CPAs have been left scrambling to keep ourselves and our clients on top of all the chaos.

“In other words, Congressional delays could mean a crunch for accountants as they wait for forms and programs to be finalized, then cram a few months’ work into the time they have left before filing deadlines. IRS Acting Commissioner Steven T. Miller expressed this worry in a letter to the heads of the House Ways and Means Committee and the Senate Finance Committee (in November), explaining that a failure to act on the AMT or a number of other provisions known as ‘tax extenders’ could significantly delay both the filing season and the payment of refunds in 2013.”

Here’s the good news: We’re not completely helpless. In fact, CPAs have a surprising amount of power on the legislative and regulatory fronts – if we choose to wield it.

The frustrations have extended well beyond the tax planning world.

Our job as CPAs is to monitor what goes on in Annapolis and Washington and alert lawmakers about the impact their proposed legislation would have on our clients, consumers, and the business community at large.

• A recent survey by Financial Executives International and Baruch College’s Zicklin School of Business shows that CFOs in the United States are skeptical that the economy will bounce back soon. • Pessimism among small-business owners has reached “jaw-dropping” levels, according to the most recent

It starts with making our voices heard. Regardless of how the “fiscal cliff” negotiations play out, there will be plenty of repercussions at the state level – particularly here in Maryland, which would be among the states hit hardest by the doomsday scenario of tax hikes, spending cuts and sequestration.

That job begins on Jan. 16 at the MACPA’s CPA Day in Annapolis. It’s our annual opportunity to meet our lawmakers face to face and talk about the issues, and this year we’re focusing on a

couple of oldies but goodies:

SALES TAX ON SERVICES The General Assembly could revisit the idea of imposing sales taxes on professional services as a way to raise revenue. The MACPA believes a sales tax on services would burden the citizens and businesses of Maryland unnecessarily with additional taxes. We believe this proposal is bad for small business and will work to defeat such legislation if introduced.

TORT REFORM In many past years, trial lawyers have introduced bills designed to replace Maryland’s current system of determining a defendant’s liability with a “comparative negligence” system that makes recovery against a defendant easier – even when the person bringing the lawsuit substantially contributed to his own injuries. Maryland courts allow a person sued for negligence or wrongdoing to raise the “contributory negligence” defense – that is, the party sued may claim that the plaintiff contributed to his injury and thus should not be allowed to recover from the defendant. This rule prevents a person from shifting his or her responsibility to others. The MACPA will again work to retain the contributory negligence rule.

REGISTER TODAY The more of you who attend CPA Day, the more powerful the profession’s legislative voice becomes. Register today at MACPA.org/CPADay and join us in Annapolis on Jan. 16. On a personal note, for the past six months I have visited a number of events and met hundreds of my CPA colleagues from around the state, and you continue to inspire me and make me proud to be part of this wonderful profession. May the new year bring hope and prosperity to you and yours.

STATEMENT

If values aren’t shared, they aren’t lived.

For 140 years, BB&T has never taken a relationship for granted. We set out to earn your business each and every day. Our strong value system helps us determine what is right and reasonable. We think things through, debate them and ultimately follow what our heads and instincts tell us. We believe if something sounds right, you should think about doing it. We believe if something feels wrong, you should walk away. It’s simple logic, but it works well in a complicated financial world. Find out how the values that drive us can help you move your business forward. BBT.com

B A N K I N G

I N S U R A N C E

I N V E S T M E N T S

4 generations, 1 workforce By Jason Ryan Dorsey

or the first time in U.S. history, four distinctly different generations are working side by side. Each of these generations — Gen Y, Gen X, the Baby Boomers, and the Matures — carries its own set of beliefs and values, preferences and priorities. Sometimes these differences work well together (think Trivial Pursuit teams). Sometimes they simply fail to connect (think twittering about your favorite tuna sandwich). It’s my belief that smart business leaders will embrace our multigenerational workforce as a timely opportunity to create a competitive advantage. By learning each generation’s mindset, you can easily takes steps to increase the performance, innovation, and teamwork from your employees of all ages. Moving in this direction starts with understanding each generation and what makes them a little different – besides Boomers being able to write in cursive and Gen Y texting one-handed. Without vowels. While driving.

GENERATION Y Also known as the Millennials, the members of Gen y were born from

STRATEGIC OPPORTUNITY

approximately 1977 to 1995. In the U.S., there are about 79.8 million members of this generation (and I’m proud to be one of them). Gen Y is currently the fastest growing generation in the U.S. workforce. In 2010, we will make up the entire 18-to-32 demographic. Along with a new definition of “business casual,” Gen Y is the only generation in the workforce that has never expected to work for one company our entire life. We also are guided by supersized career expectations, a need to see ongoing progress, and Boomer parents who continually save us from consequences (which includes inviting us back after college graduation). Older generations often believe that Gen Y is tech savvy. My research shows this is incorrect. Gen Y is not tech savvy; we are tech dependent. We don’t know how technology works; we just know we can’t live without it. Gen Y can become great employees if you recognize our preferences (such as monthly 30-second checkins versus an annual review) and give us the space to demonstrate our potential (such as challenging us to use YouTube to increase sales).

GENERATION X Gen Xers were born from about 1965 to 1976. They came of age during a time of scandals, wars, fallen heroes, and government institutions that failed to deliver on promises made. They have witnessed everything from downsizing and outsourcing to rising divorce rates and lines at the gas pump. Major corporations broke the lifetime employer / employee promise by laying off Generation X’s parents and older friends, and then offering no apology, only a rusty locked gate. The result is that Generation X is notoriously skeptical – and for good reason, I think. I often joke in my keynotes that Generation X doublechecks my data while I’m speaking. While Generation X brings a new skepticism to employer / employee loyalty, ironically they are often viewed as the most loyal generation in the workplace. However, they are loyal to people, not organizations. When it comes to leading Generation X, it’s important to keep your commitments and let them know they have options. Without a doubt, Gen Xers can become fantastic employees and business leaders – just be sure to

STATEMENT

tell them where you found your data…

BABY BOOMERS Boomers were born from approximately 1946 to 1964. They are the true workaholics of the modern workplace. The reason: Boomers entered the workforce at a time when there were more people than there were jobs. They realized the key to job security and career success was to outwork the competition, which they still do to this day. They arrive at work early, stay late, work on weekends and expect others to do the same (except their own teenage kids). Boomers have only one method for measuring hard work and work ethic: hours worked per week. And the hours must be seen to count! As one Boomer manager told me, “Sure, our employees can telecommute, as long as they show up to work in our office 40 hours a week, between 8 and 5.” As bosses, Boomers believe there are no shortcuts to success; you must pay your dues (and not with a credit card). While Boomers will not retire en masse as once feared (thank goodness, because they know all kinds of cool things my generation doesn’t, like long JANUARY 2013

division), they will eventually start to ease up on the long work hours and late nights and begin to pursue more lifestyle-friendly jobs.

MATURES Also known as Traditionalists, the Matures were born before 1946. Sometimes called Traditionalists or the Silent Generation, Matures’ most formative experience is that they have a deeply rooted military connection. The military was a fixture of their coming-of-age experience, both directly (think rationing) and indirectly (Pearl Harbor). At the same time, Matures endured the Great Depression or its immediate aftermath and became conditioned to survive on as little as possible. They are the true “waste not, want not” generation. Matures take pride in believing that a person should do “an honest day’s work for an honest day’s pay.” They also are comfortable with delayed gratification (which you often see when they are driving). My grandfather is 87 years old and a proud member of the Mature generation. When I ask him to tell me about his experience in World War II, all he will say is, “We left a lot of good people behind.” That’s it. Nothing more. He doesn’t want to show off

or draw attention to himself. He is a good listener, extremely patient, and truly one of my heroes. My respect for him is not surprising considering that, according to my research, Matures are the generation that Gen Y most trusts. Each of these four generations brings a valuable skill set and mindset to your workplace. Recognizing where they are coming from is the first step toward finding a common ground you can build on to give your business a strategic advantage. It’s also a great opportunity to increase the number of friends you have on Facebook.

Recognized as The Gen Y Guy®, Jason Ryan Dorsey is an acclaimed keynote speaker, bestselling author, and award-winning entrepreneur. He teaches leaders how to make each generation in their workplace and marketplace a competitive advantage. Find out more at JasonDorsey.com.

DON’T JUST KEEP UP WITH CHANGE. BLOW IT AWAY. B Y B I L L SH E RIDA N

know what you’re saying: “Change is hard – the hardest problem we face today.” Wrong. I’m not saying keeping pace with change is easy. It’s not. But it’s also not a problem. It’s an opportunity – a huge one. In fact, Daniel Burrus hesitates to use the word “change.” When it comes to our current and future realities, he uses “transformation” instead.

Burrus sees the value that CPAs add as a pyramid. The bottom part of the pyramid – by far the largest part – currently consists of the data and information that CPAs provide to their clients. The smaller, top part of the pyramid consists of knowledge and wisdom.

wisdom parts of the triangle. I need consultative value from you – and by the way, I’ll pay more for that. “I need you, but I don’t need the old you. I need a new you who understands the transformation I’m going through as your customer. If you don’t, you’re out of touch.”

“I need you, but I don’t need the old you. I need a new you who understands the transformation I’m going through as your customer. If you don’t, you’re out of touch.”

“We live in a transformational time,” says the futurist and author, who keynoted the 2012 CCH User Conference in San Diego. “In the next five years, guaranteed, we’re going to transform – not change, but transform – how we sell, how we market, how we communicate, collaborate, innovate, train, educate. Is this just for the big companies? No. It’s about relevancy in a world that’s transforming. “This is a big deal,” he added. “It’s the biggest deal that’s happened since we’ve been around, and it represents amazing new opportunities for us to bring new value to our clients.”

HERE’S WHY:

Groundbreaking technological changes are making data- and information-management services obsolete. That leaves CPAs with the golden opportunity of using their knowledge and wisdom to provide clients with insight, foresight, and consultative value.

And stop thinking you have to keep up with change. “Keeping up is a fool’s game,” Burrus said. “I want advantage. I want to do what others aren’t doing. I want to see what others aren’t seeing.”

Burrus sat down with me for a one-on-one interview before his CCH keynote. Watch the interview online at cpa.tc/ burrus. Bill Sheridan is the MACPA’s chief communications officer.

“Before I had access to the data and the information, I needed you to give it to me,” Burrus said. “Now, we’re heading toward real-time accounting and auditing. When we get that point, your value shifts to the knowledge and

STATEMENT

HELP YOUR CLIENTS REMEMBER THE ONES THEY L VE Family … friends … Baltimore The Baltimore Community Foundation has been helping people who love Baltimore, and their advisors, for 40 years. You might be surprised at the variety of charitable plans we’ve helped design and bring to life.

Planning a gift for Baltimore? Explore the possibilities at

www.bcf.org/sharethelove

Because you can’t expect the perfect replacement to just pop in. The sudden loss of a key executive can derail the operations of even the strongest company. When you need an experienced stand-in for a top team member, call Mitch Halbrich, The Mergis Group’sSM Senior Director, Executive Consulting. Mitch will help you fill that spot in a hurry, so you can take your time looking for a permanent match. For over thirty years, the Mergis Group has recruited smart, experienced professionals with impeccable qualifications. That’s why the BBJ rated us the number one search firm in the region, and why 90% of our business comes from repeat customers. Mitch Halbrich Senior Director Executive Consulting

Accounting & FinAnce • BAnking • controllers HumAn resources • cFos • sAles & mArketing tecHnology • executive consulting

Baltimore: (410) 752-5244 / Columbia: (410) 290-5755 Offices also in Washington / Bethesda / Tysons Corner

Visit us at www.mergisgroup.com

The Mergis Group is now a Randstad company, the second-largest staffing and recruiting provider in the world.

MARKET

NEWS & VIEWS NEWS & VIEWS

Insurance coverage from Superstorm Sandy: What you need to know B Y M I K E C ON LE Y, E SQ .

uperstorm Sandy may end up costing $20 billion in property damages and $10 billion to $30 billion more in lost business claims, according to IHS Global Insight, a forecasting firm. As the mid-Atlantic region begins to recover from the aftermath of Sandy, homeowners and businesses need to be aware of insurance that is available – and mindful that actions they take now can affect insurance coverage for damage resulting from the storm. For business owners, insurance can provide a valuable source of recovery from the disruptions to your business associated with this storm. Homeowners who suffer property damage should immediately provide notice to their insurance company, or companies. Keep in mind that damage that results from flooding may be excluded from a homeowner’s policy, but damage from wind, rain, etc., may be covered. As such, notice should be provided to your homeowner’s insurer and, if you have flood insurance, to that carrier as well.

MARKET TECHNOLOGY AUD OMB UPDA 990 OVERS

Unless you are absolutely certain as to the cause of the damage, refrain from characterizing the cause until more facts are known. As the director of the Consumer Federation of America has noted, policyholders “must be the first line of defense against insurers pushing losses to the federal flood program, when the actual cause of the loss could be more ambiguous or was caused by wind or rain.” Similarly, property insurance may contain a higher deductible for damage resulting from a hurricane. Sandy was ultimately downgraded to a post-tropical storm before reaching landfall, and insurance regulators from New York, New Jersey, Connecticut, and Maryland have officially notified insurers that hurricane deductibles do not apply under homeowner’s policies. Governor Andrew Cuomo has specifically warned insurers not to charge hurricane deductibles for Sandy-related damages. In the event that insurers nevertheless try to invoke hurricane deductibles for damage that may have occurred

prior to the downgrade, the timing of damage to the property in relation to the timing of the storm will be critical.

While you should immediately provide notice to your insurance company, care should be taken as to how you characterize your loss. While physical damage to property is covered by property insurance, Business Interruption Insurance (“BI”) coverage is intended to allow a business to recover damages that result from a disruption in business. Policyholders need to be mindful of certain considerations in pursuing coverage for BI claims:

GOV

• The importance of providing timely notice of a business interruption claim and the potentially disastrous consequences of failing to do so. If business suffered because of the storm, provide notice. Unlike wine, notice does not get better with time.

• Accurate record keeping is essential in calculating the value of (See Sandy on page 15)

You’re hired! McDaniel Interviewing Day gives students an edge in the market Ellen Aloo, a senior at McDaniel College from Taneytown, Md., and Julie Ogrysko, T. Rowe Price, conduct a mock interview as part of McDaniel’s sixth annual Interviewing Day, which gives McDaniel Students a leg up in the job market. Several Maryland accounting firms participated in the event, including Bond Beebe; Gorfine, Schiller and Gardyn; Gross Mendelsohn and Associates; Hertzbach & Company; McGladrey & Pullen; Novak/Francella, Salter & Company; Weil, Akman, Baylin & Coleman; William G. Jones, CPA; and Zimmerman & Associates.

STATEMENT

GOVERNMENT TS TECHNOLOGY CPAS STA NOT-FOR-PROFIT CB TS HR 990 YELLOWBOO Y 2013 Government DIT OV & Not-for-Profit ATE ANALY 0 RISK Conference CBO SIGHT ANALYTICS FASAB 99 VERNMENTOMB UPDATE STATEMENTS AUDIT NFPS HR BEST PRACTICES MARKETS April 26 | Event ID: 121000 PAYMENTS TECHNOLOGY |

macpa.org/GNFP2013 OVERSIGHT STATISTICS Sponsored by:

NOT-FOR-PROFIT

Promoting and protecting CPAs in Maryland

Bring your voice to Annapolis on January 16th

2013 macpa.org/cpaday

7:30am - 1:30pm | January 16 | Governor Calvert House | Event ID: 181000

SHARPEN UP.

Sponsored by:

2013 EMPLOYEE BENEFIT PLAN CONFERENCE May 6 | Sheraton Columbia Hotel | Event ID: 121012

macpa.org/employeebenefit2013 STATEMENT

Sandy, from page 12

your business interruption claim. • Your policy may provide for recovery of a number of “extra expenses” incurred by you as a result of a covered property loss, such as cleanup costs, damage resulting from

Thank you, Anoop! Payroll Network’s Christine Colburn presents MACPA Chair Anoop Mehta with a framed article from The Gazette acknowledging his contributions to the MACPA.

a loss of power, coast associated with a move to and from a temporary location, the cost of renting temporary equipment, extra labor costs such as overtime, and transportation allowances. • Many BI policies provide for insurance coverage if access to your business is interrupted by an order of civil authority.

• In certain circumstances, if

customers are prevented from accessing your business, insurance coverage may be available under an “ingress and egress” provision of the BI coverage. • For manufacturers, if the supply of a critical component/raw material of your product is interrupted because of damage to the supplier’s business, “Contingent Business Income” coverage may compensate you for lost profits resulting from the interruption to your business. Similarly, if a key customer of yours suffers property damage interrupting its business, JANUARY 2013

the “Contingent Business Income” coverage may compensate you for lost profits resulting from the interruption to your business.

• If the flow of customers to your

business is dependent upon another business, such as an anchor store in a mall, and the other business suffers property damage interrupting its business, the resulting disruption to your business may be a covered loss under a “loss of attraction” provision of your policy. • If you submit a claim to your insurance company, document everything. Every call should be confirmed in writing, even if it is simply an e-mail to the adjuster saying, “This is to confirm we spoke today and you are going to get back to me by the end of the week.” Similarly, if the insurance company requests information, document the request and document when you have complied. We recommend confirming a request for information by stating:

fall through the cracks. The “squeaky wheel” approach can help to get your claim resolved as quickly as possible. Also, keep in mind that with $20 billion in property damage, construction costs may increase as a result of increased demand for materials, as well as increased labor costs because of the demand for local builders. Likewise, there may be delays in obtaining materials and labor because of the increased demand. Some municipalities are already experiencing significant delays in simply responding to the demand for demolition/construction permits. Make sure that any estimates obtained – particularly an estimate that an insurance company provides – is based upon current costs, and that any BI claim has a realistic restoration period given potential construction delays. In sum, whether your business has

CPA leaders today … and tomorrow AICPA President Barry Melancon, left, and Vice Chair Bill Balhoff, right, welcome MACPA Deputy Executive Director Jackie Brown and Vice Chair Byron Patrick to the 2012 AICPA / CPA-SESA Leadership Conference. Patrick will take over as chair of the MACPA’s Board of Directors in July.

“When we spoke today you asked for the following information … I asked if there was any additional information you needed, and you said that there was not.” Understand that adjusters at insurance companies are going to be handling multiple claims, and you want to make sure yours does not

been interrupted or your home damaged by Sandy, you should carefully review your insurance coverage in order to maximize recovery, and thereby minimize the financial impact of the storm. Michael Conley is a principal at Offit Kurman and chair of the firm’s Insurance Recovery Group. He can be reached at mconley@offitkurman.com or (267) 338-1317.

PRACTICE NEWS & VIEWS MANAGEMENT Growing your firm by managing your brand B Y R AY B I G L E Y A N D JE N N IFE R WARAWA

hether you are aware of it, you have been creating a personal brand your entire life. The clothes you wear, the type of work you do and who you do it for, the organizations with which you volunteer, and even how you respond to an e-mail contribute to your brand. That’s because personal branding is about your image. If you do not spend time developing your own unique image, what are the consequences? Amazon’s Jeff Bezos is famously attributed as saying, “Your brand is what people say about you when you leave the room.” Branding means to characterize yourself and your firm or business so you can compete. As tax and accounting services become more commoditized by Big Box preparers and advisors, it is more important than ever to compete and differentiate yourself with your own brand. Now, the question is whether the brand you have established is the one you want. How do you know if it’s working for you? Is it effective, or do you need to rebrand yourself some other way? Ask yourself: • Am I doing what I love to do and what I am good at? • Do clients and colleagues reach out to me for advice regarding my expertise?

• Who is my ideal client? Do the majority of my clients fit within this profile? If you answered “yes” to these questions, your brand is probably well established and you can skip to the end of this article, which talks about promoting your personal brand. However, if you’re interested in learning what you have to do to change the way you’re perceived by clients, it’s probably time for a change.

Personal branding starts with knowing your niche and discovering what separates you from the competition. This is based on your expertise, what you enjoy doing on a day-to-day basis, and who your ideal client is. Think about what differentiates you from your competitors. Your niche could be anything: • Accounting for the medical and dental industries. • Personal finance advisor for individuals.

REFRESHING YOUR BRAND

• Real estate accounting.

Most companies take months or longer to figure out their brand. Disney didn’t come up with its image of the happiest place on earth overnight; it took a period of many, many years for this to happen. Nike’s swoosh isn’t just an emblem; it’s symbolic of a feeling of exhilaration or excitement you have when you buy a pair of Nike sneakers.

• Risk management.

We know accountants have neither the time nor the resources and patience to spend years branding their image. Most likely, you’re thinking you can do this before or after busy season, in between filing deadlines, or maybe even before your last appointment of the day. Whatever path you choose to take, the point is to begin thinking differently about how you describe what you do and what you offer in order to make a long-lasting impact on your clients and prospects.

• Forensic accounting. • Non-profit audits. The industries and areas of expertise are endless. Identify yours from your skills and knowledge, and ensure it is part of your identity.

EVALUATE THE ‘PERSONAL’ IN YOUR PERSONAL BRAND Your brand extends beyond your professional expertise to your clothes, hairstyle, communication skills, and where you spend your time outside of work. Evaluate the following: • The old adage, “You are what you wear,” is true. From photos posted online to the way you dress in the office, an unflattering presence can easily impact your personal brand. • Good customer service and how you communicate are huge. Audit yourself STATEMENT

and your firm and examine even the smallest details. For example, how do you manage e-mail – your primary, daily link to clients and colleagues? We are all frequently inundated with e-mails and requests that can be overwhelming, but think about what kind of message you’re sending by NOT responding. When you don’t have time to answer the question an e-mail poses, send a note back saying something like this: “Thanks for your note! I will go over your request and get back to you within three days. Should you need a reply sooner, let me know.” • Community and professional involvement and hobbies matter. The core values of the organizations with which you choose to align yourself give others an impression of what is important to your brand. Your activity level with the organization also helps form your brand, but choose an organization that means something to you. Your commitment, interest and involvement will naturally spill over to your professional image. • Who you know and who you are connected with strongly influences your brand. Have you ever purchased something just on the recommendation of a friend or colleague? Your clients have, too.

Networking and knowing the right people is always the name of the game in terms of success. Part of working on your personal brand includes looking for the gaps in your brand profile and making changes that will positively impact your image. When you know your personal brand, niche and communication style, it’s time to create a brand toolkit.

CONTENTS OF A BRAND TOOLKIT Creating a brand toolkit sounds intimidating, but you probably already have many components – if not all. You just need to ensure it is consistent and reflects the brand you want. Brand toolkit essentials include your business card and professional biography. Review these to ensure they reflect the image you want to portray. Your bio should be consistent on the firm’s website, Facebook, LinkedIn, Twitter and other social media page. It should also use language that reflects who you are. In this day and age of social networking, it is essential that your posts and updates on these sites also reflect this expertise.

USING YOUR BRAND TO SELL DIFFERENTLY

In the examples provided above, the point of creating your brand is to think differently about what you do in order to provide services beyond traditional tax and accounting. As a result, the final step in the process is promoting yourself. Social media provides unlimited personal brand-building opportunities, but remember that how you market yourself has an impact on your brand. Touting your achievements rather than providing value-added information can do more to harm your brand than help it. Remember: Building a reputation takes time and energy, but it is an essential part of developing a unique edge and differentiating yourself among the competition. You’ll know whether you’ve made an impact on clients and prospects simply by picking up new engagements. Ray Bigley is vice president of business development for Avalara, creators of AvaTax, a cloud-based sales tax reporting and compliance program. Contact him at ray.bigley@avalara.com. Jennifer Warawa is vice president, partner programs and channel sales at Sage; she heads up the Sage Accountants Network offering improved ways to reach clients through practice management. Contact her at jennifer.warawa@sage.com.

LEADERSHIP ACADEMY 2013 CPA careers take off when CPAs learn to lead. macpa.org/leadershipacademy May 6-8 | Event ID: 371001 | Crowne Plaza, Timonium

TAX CORNER NEWS & VIEWS Get it right the first time: Independent contractor vs. employee status B Y A N D R E W G. P OU LOS

ow does a business determine if its workers are employees or independent contractors? This distinction is not as simple as most may think. The old adage, “My workers are subcontractors because they pay their own taxes,” is not one of the 20 questions that the IRS or state labor agencies use to determine worker classification – and that defense would never carry any weight in an employment audit.

In addition, when a business fails to properly classify its worker as employees, these individuals are unable to participate in benefit programs, such as health insurance provided by the employer. This issue, which usually arises after the fact, can catch workers by surprise and put them in a predicament that they are often not prepared to resolve. The consequences and impact on the business are far greater than those for the misclassified worker.

In an era when worker misclassification and due diligence requirements are at an all-time high, accounting professionals must understand all the complexities. Improper classification not only carries a huge burden on the business, but can also have a significant impact on the worker.

In most cases, businesses categorize workers incorrectly due to a lack of knowledge and understanding of the guidelines. However, in some cases, the misclassification is clearly willful and negligent. There are only so many employment audits the IRS and state labor agencies can conduct. Should a business that is negligent go through an audit, though, the consequences can be quite severe.

If the IRS determines employees were erroneously classified as independent contractors, the IRS may notify the workers that they are not entitled to deduct their business expenses from gross income on Schedule C and / or that they were not entitled to contribute to a retirement plan because they are not self-employed. When the IRS prohibits business expense and deduction claims for contributions to self-employed retirement plans, it can be very costly to the worker.

For example, a willfully careless business that has its workers misclassified will not only be responsible for the tax liability, the penalty for improper classification and the penalty for failure to file returns, but will also be responsible for the 100 percent penalty for willful failure to collect tax. By the time the audit case is closed, a business may owe three times as much just for improperly classifying their workers.

Most times, employment classification

issues occur at the state level. In today’s tough economic times, workers will apply for unemployment compensation, which triggers the state unemployment office to conduct an investigation when it discovers that the business doesn’t have the worker classified as an employee. Other times, employment classification issues are triggered by workers’ compensation claims, or complaints to the state unemployment board about a workrelated situation. As I always say, it’s the least expected situation that can get a business under fire for worker misclassification. While it’s quite clear what the consequences are to the business and the worker for improper classification, it isn’t always clear how a business determines if its workers are employees or independent contractors. The key issue that the IRS asks about is whether the business had “control” over the worker. Control is the clear-cut word, but how control is determined is not so clear cut. To determine if a business had control, the IRS will generally consider 20 questions in making the final determination of worker classification. Keep in mind that not all of these inquiries apply in every worker classification audit. Often, the IRS will use only the questions that apply, depending on the industry in which the business is operating. STATEMENT

Of those 20 questions, here are nine that most businesses can use to make a fairly safe and correct classification of their workers:

1. Is the worker required to comply with instructions given by the business?

2. Does the business provide the worker with training?

3. Is there a continuing relationship

between the business and the worker?

4. Does the business provide set hours of work for the worker?

5. Is the worker required to have

substantial hours toward the needs of the business?

6. Who furnishes the worker’s tools and materials to conduct the work?

7. Will the worker realize a profit or

loss from the services provided to the business?

8. Does the worker work for more than one business at a time?

9. Does the worker receive payment by the hour, week or month?

When conducting worker classification audits, these are some of the questions that are considered by the IRS and state labor agencies. Worker classification audits have a case-bycase basis, so the degree of importance given to the answers of each of the 20 questions will vary depending on the business and its situation. Remember, too, that a business will be in an industry in which IRS or court case rulings on worker’s status exist and set precedence. Therefore, it’s not necessarily where the business thinks the workers should be, but rather what prior case rulings dictate.

We Go To Work For You.

Helping your clients understand the guidelines and properly classifying their workers can prevent an audit and save the business significant money in penalties and interest. In addition, it can keep you, as the accounting professional, out of the hot seat during these challenging times when the IRS is mandating higher due diligence requirements. There is nothing better than getting it right the first time. Andrew G. Poulos, EA, is principal of Poulos Accounting & Consulting, Inc., in Atlanta, Ga., where he focuses working with tax clients and representing clients before the IRS. Contact him at PoulosAccounting.com.

Go with the biggest in the industry. We are North America’s leader in marketing accounting and tax practices because we understand the value of your firm, know how to market it and have hundreds of buyers in Maryland who want a practice. Our biggest concern is you. Our wealth of experience culminates to make sure your comfort level is met, your questions are answered and everything is being done to sell your firm. Give us a call today so that we may go to work for you and produce the results you desire.

The Holmes Group

1.800.397.0249

www.AccountingPracticeSales.com bradley@accountingpracticesales.com

TAX CORNER CONT. Case sheds light on dealing with employees with ‘no-match’ Social Security numbers B Y E D WA R D E. SH A RKE Y, E SQ . , AND RO BERT D’ALF O NS O

he Social Security Administration sends a “no-match” to an employer when an employee’s given Social Security number does not match his or her name. A no-match situation may be the result of government error, but it may also arise when an unauthorized worker uses a fake SSN.

Although the federal government has yet to promulgate unambiguous guidelines, a recent opinion by the United States Court of Appeals for the 7th Circuit suggests that an employer who terminates a worker due to immigration status will not be violating federal anti-discrimination law.

Since the SSA resumed the practice of issuing no-match letters in 2011, businesses have been without clear guidance on how to handle no-match letters, especially where foreign workers are concerned.

In the case, a bank employee sued the bank after she was fired, claiming that she was discriminated against based on national origin. The employee had helped her husband, an unauthorized foreign worker, open accounts at the bank, and she had added his name to her own account. When the bank discovered the arrangement, it became concerned about fraud, and it eventually fired the employee.

Continuing to employ a no-match employee could subject an employer to liability for knowingly employing an unauthorized worker. Terminating the employee could expose the employer to liability for discrimination if he is a member of a protected class (such as being a foreign national).

employee benefit

JAN

EMPLOYEE BENEFIT AND RETIREMENT PLANNING: PENSION AND DEFERRED COMPENSATION TOOLS

Clarion Hotel and Conference Center Antietam Creek, Hagerstown • CPE: 8 ID: 111217 • http://cpa.tc/1su

MAR

THE COMPLETE GUIDE TO THE PREPARATION OF FORM 5500

Bowie Comfort Inn Hotel & Conference Center, Bowie • CPE: 8 ID: 111110 • http://cpa.tc/111110

The employee’s case was summarily dismissed. The Court of Appeals explained that “national origin,” which

can be the basis for a discrimination claim, is defined as “the country from which you or your forbearers came.” The court distinguished this from alienage or immigration status, which is not a protected class. Where a business terminates a worker because it believes he is an illegal alien, the employee has no claim for discrimination. While there may be some overlap between immigration status and national origin, this case provides greater clarity for businesses. Under federal anti-discrimination law, it is not wrongful to terminate a worker based on his status as an illegal alien. Edward E. Sharkey, Esq. focuses on business law and litigation in Bethesda, Md. He can be reached at esharkey@ sharkeylaw.com or www.sharkeylaw. com. Robert D’Alfonso is a law clerk associated with the firm.

Calendar MAR

THE COMPLETE GUIDE TO THE PREPARATION OF FORM 5500

MACPA Towson Center , Towson CPE: 8 • ID: 111112 • http://cpa.tc/111112

MAR

WEBCAST: THE COMPLETE GUIDE TO THE PREPARATION OF FORM 5500

Online Webcast , Internet • CPE: 8 ID: 17W467 • http://cpa.tc/17467

MAY

ADVANCED EMPLOYEE BENEFIT PLAN TOPICS

Johns Hopkins University - Montgomery County Campus, Rockville • CPE: 8 ID: 111114A • http://cpa.tc/1sv

MAY

YOUR UPCOMING EMPLOYEE BENEFIT COURSES JANUARY - MAY 2013

EMPLOYEE BENEFIT PLAN CONFERENCE

Sheraton Columbia Hotel, Columbia CPE: 8 • ID: 121012 • http://cpa.tc/1sw

MAY

EMPLOYEE BENEFIT PLANS: AUDIT AND ACCOUNTING ESSENTIALS

MACPA Towson Center , Towson CPE: 8 • ID: 111116A • http://cpa.tc/1sx

When your firm is ready, there’s a path to follow. The Premier Plan. As your firm grows, so do your risks. So when it’s time to decide how to protect your firm, it’s important to choose professional liability insurance that can address the evolving needs of your business. When you choose advanced coverage offered through the AICPA Premier Plan, you have options. Available liability limits range from $100,000 to $10 million, with 28 deductible options for qualified firms. When you choose the AICPA Premier Plan, you’re on the right path to your firm’s future.

Contact Rich Bacher at Aon Insurance Services at (800) 221-3023 or visit www.cpai.com/premierad Endorsed by:

Underwritten by:

Brought to you by:

Aon Insurance Services, is the brand name for the brokerage and program administration operations of Affinity Insurance Services, Inc.; (AR 244489); in CA, MN & OK, AIS Affinity Insurance Agency, Inc. (CA 0795465); in CA, Aon Affinity Insurance Services, Inc., (0G94493), Aon Direct Insurance Administrator and Berkely Insurance Agency and in NY and NH, AIS Affinity Insurance Agency. One or more of the CNA companies provide the products and/or services described. The information is intended to present a general overview for illustrative purposes only. It is not intended to constitute a binding contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. The statements, analyses and opinions expressed in this publication are those of the respective authors and may not necessarily reflect those of any third parties including the CNA companies. CNA is a service mark registered with the United States Patent and Trademark Office. Copyright © 2013 CNA. All rights reserved. E-9002-0113 MD

MACPA Members: Maximize Your Efforts and Improve Your Bottom Line As a CPA, you know that the most important role you play is to help your clients meet their goals and objectives while continuing to search for ways to exceed their expectations. More and more, clients are seeking strategies from their tax advisors that extend beyond tax management and into the arena of financial advice and investing. The Hesekiel Jenkins Group at Morgan Stanley Smith Barney can complement the intricate tax strategies you provide to clients with wealth management advice and investment knowledge. An alliance with our team will allow you to meet the investment needs of your clients without taking on the risk, cost and time required to provide in-house wealth management strategies. By creating an alliance with The Hesekiel Jenkins Group, your clients will gain access to comprehensive and expansive investment strategies. In addition, you will be able to: • Increase the potential profitability of your CPA practice

Left to Right: Jeff Wasserman, Consulting Group Analyst; Debby Sweatt, Senior Client Service Associate; Greg Jenkins, Financial Advisor; Scott Hesekiel, Senior Vice President; Lisa Stark, Senior Registered Associate

The Hesekiel Jenkins Group at Morgan Stanley Smith Barney 303 International Circle, Suite 500 Hunt Valley, MD 21030 888-435-2281 scott.hesekiel@mssb.com

• Expand the services you offer clients • Leverage the experience of an industry leader in wealth management • Distinguish your firm from the competition Scott J. Hesekiel, CFP® Senior Vice President Senior Investment Management Consultant Wealth Advisor 410-229-8226 scott.hesekiel@mssb.com

NY CS 7175369 06/12

REAL LEADERSHIP

UB alumni lead more of Baltimore’s largest accounting firms.* Enroll now in the Merrick School of Business, home of Maryland’s only undergraduate Honor’s Accounting Program, where we are dedicated to serving the needs of the accounting and financial community. • • • •

M.S. in Accounting and Business Advisory Services M.S. in Finance M.S. in Taxation M.B.A. (UB/Towson)

For more information, visit: www.ubalt.edu/admissions The University of Baltimore’s M.S. in Taxation program was ranked in the top 30 percent of the 2012 U.S. Masters in Tax Programs according to TaxTalent, the largest online network for tax professionals *According to the 2012 Baltimore Business Journal Book of Lists, the University of Baltimore ranked first in terms of the number of alumni managing or co-managing Baltimore’s largest 25 accounting firms.

Merrick School of Business

ACCOUNTING & AUDITING The impact of fair value measurement and considerations for today’s accountant F RO M T H E A I CPA

n recent years, fair value has been at the helm of many of today’s accounting-related issues that auditors need to negotiate. Much of the focus centers on models used to estimate “fair value” and the disclosures that can, and should, be made regarding their use. Auditors frequently lack the training needed to effectively test fair value measurements. Worthy of note are the findings of a study conducted by the Public Company Accounting Oversight Board that identified 123 audit deficiencies related to fair value estimates and asset impairments in 2010 (out of a total of 234 general audit findings). In May 2012, Acuitas, Inc., an Atlanta-based valuation and decision consulting firm, prepared and issued a compilation of these findings. The report found that the primary causes of the deficiencies were attributed to fair value measurements and impairments. The fair value measurement deficiencies resulted from the increasing complexity of audits arising from the recent economic crisis (e.g., audit complexity rises with the level of bias and judgment used by management to develop estimates and assumptions). The impairment deficiencies were noted as resulting

from “the failure to adequately test management’s projected financial information assumptions.” Fair value methodology applies to a wide variety of transactions and measurements. Examples include purchase price allocations, tangible and intangible asset impairment testing, patent and trademark value assessments. Auditors frequently turn to outside experts to assist with the evaluation of fair value measurements. If one is interested in becoming a fair value practitioner, it is advisable to become well-versed in regulations and methodologies related to fair value measurement and obtain a valuation credential. Fair value standards include FASB’s Accounting Standards Update 201108, “Goodwill Impairment,” FASB Accounting Standards Codification (ASC) 820, “Fair Value Measurements and Disclosures,” and FASB ASC 350, “Intangibles - Goodwill and Others.” Other applicable fair value standards can be found on the AICPA website.

“If you are an auditor conducting fair value testing, it is in your best interest to obtain a valuation credential so that you are utilizing best practices when applying valuation methods,” said Michael Hamilton, CPA, ABV, CFF. The Accredited in Business Valuation (ABV) credential is available only to CPAs with a valid license or certificate and is supported by the AICPA (visit aicpa.org/ABV for details). Other valuation credentials are offered by the American Society of Appraisers (ASA) and the National Association of Certified Valuation Analysts (NACVA). The AICPA and ASA credentials also have minimum valuationrelated experience and education requirements. All of these credentials require an exam.

A credential will be a valuable marketing tool to help CPAs distinguish themselves as a competent and adequately trained valuation service provider.

STATEMENT

{

My number is… 5

}

ADP helps me towards retiring 5 years sooner.

So what’s your number? Higher revenues and profits? More and happier clients? Fewer work hours? An earlier retirement date? ADP can help add it all up for you, with products and services that go beyond just payroll. Like cash flow, risk and talent management solutions so you work smarter, easier and more efficiently. ADP offers innovative solutions, superb service and outstanding results. Discover YOUR number – by calling OUR number: 855-408-3751 or visit us at www.accountant.adp.com/my-number

s u t i Vis

! e n Onli

Proven Accounting Solutions for Government Contractors

www.JAMIS.com

BUSINESS NEWS & VIEWS & INDUSTRY Nine steps to an effective pay-for-performance compensation plan F RO M D AV E RYA N , CPA , CCP, JD

n my work with clients and in my ongoing compensation research, I see continued growth in use of pay-for performance compensation plans. A form of variable incentive compensation, these compensation plans provide opportunities to earn incentive compensation to eligible employees. Incentive compensation payouts are based on achievement of a predetermined set of objectives, formula or criteria. If the results are achieved, then there’s a payout. If the results are not met, then there is no payout. Companies and employees alike are attracted to and can benefit from pay-for-performance plans. Companies willing to do what it takes to properly design and implement a pay-for-performance plan have the opportunity to stand out in the crowd and improve their chances of achieving their business goals. An effective pay-for-performance plan delivers a number of benefits. Since payments in pay-for-performance plans are contingent on performance, these plans are effective cost control mechanisms. In addition, pay-for-performance payouts are not added to base pay and thus don’t generate the compound growth of fixed-costs that base pay increases do. However, the true power of effective pay-for-performance plans

extends well beyond their cost control characteristics. The true power of effective pay-forperformance plans lies in their ability to help companies achieve critical business objectives. Companies need to attract, retain and motivate the right employees to grow a profitable business. Well-designed pay-forperformance plans help companies compete for the talent they need and communicate company priorities and critical business objectives to employees. They also align the interests of employees with those of the company by giving employees a stake in the company success, and help focus employees on the behaviors needed to drive company success. Essentially, pay-for-performance plans are a tool that can be used to shine a spotlight on key company priorities and business drivers. Given all of those potential benefits, why wouldn’t every company implement an effective pay-forperformance plan? As with any powerful tool, pay-forperformance plans have a learning curve, require regular maintenance and, if misapplied, can do more harm than good. So, whether you are implementing a pay-for-performance plan for the first time or trying to improve the effectiveness of an existing plan, here are nine steps that are critical to the initial and ongoing

success of your plan:

1. Gain a deep understanding of the

background and the strategic context that the plan is intended to support. Review the company’s mission, business goals and objectives, the HR strategy, and the compensation philosophy. They are the foundation of the company’s management framework that the incentive compensation plan will need to align with and reinforce.

2. Identify root causes driving the

need for improving performance, teamwork, or employee engagement. Challenge whether you only have a pay problem; or, are there other factors that need to be addressed?

3. Ensure that participants have a clear line of sight to plan objectives. A clear line of sight means there are clear, actionable measures that the employee can impact, and that determine revenues, costs, productivity, or profits.

4. Identify the key strategic

objectives for your company or business unit, such as customer satisfaction, productivity, quality, new products or process improvement. Weigh these objectives based on impact, importance, and your degree of confidence in your ability to measure results.

STATEMENT

5. Communicate the strategic

company objectives early in your goal-setting process. Allow time for managers and employees to align business unit, team, and individual objectives with company objectives.

6. Create an integrated set of

financial and strategic objectives that reflect a balance of financial results and the key business drivers. Set a range of financial and strategic performance levels and commensurate reward levels. Provide payout opportunities that are consistent with the value of the performance and meaningful to employees.

7. Expect this to be an ongoing

and iterative process. Refresh your

plan each year based on business conditions and updated goals and objectives. If this is your first pay-forperformance plan, start out by piloting a plan in a segment of your business.

framework. The more these programs and systems are synchronized and integrated, the greater the likelihood that the company’s overall vision and business goals will be achieved.

as one component of your ongoing communications with employees. Provide ongoing communications to all participants. Use progress updates, recognition for both small and large wins, and other reinforcements for results achieved.

Consequently the more closely aligned a pay-for-performance plan is with the management framework, the more successful it can be in providing strategic support for achieving your company’s synchronized goals and objectives.

9. Finally, remember that although

David W. Ryan, CPA, CCP, JD, is

8. Use the pay-for-performance plan

a pay-for-performance plan can be a powerful tool for motivating employees, it is not an end unto itself. A pay-for-performance plan is just one part of a company’s management

managing director of CompensationGPS. He can be reached at (443) 377-3166 or Dave@CompensationGPS.com.

The careers of CPAs follow a path we call

theBOUNCE For EXECUTIVES AND PARTNERS our competency-based approach helps you fill talent gaps by promoting, training, and growing the best talent. For YOUNG CPAS The Bounce helps you establish a career path and teaches you how to get ahead. See the video that explains how The Bounce can impact your organization’s learning at:

bizlearning.net/thebounce

HIGH TECH SOLUTIONS

EWS & VIEWS

Align marketing and technology to improve your firm B Y E R I C B E NSON

arketing and internal technology have, in the past, been two departments that were adversarial in many companies. The gap was easy to define. Marketing was full of art professionals who used feel to improve the image of the firm. Technology was full of logic-minded, security- and data-focused professionals that were concerned about keeping compliance high. Many times, the marketing professional would make choices with company data that compromised that data’s integrity. The marketing department wouldn’t see it this way, though – they were trying to build niches and increase prospects. While these stereotypes do have a grain of truth (don’t all stereotypes?), it is increasingly necessary that the two areas work closely together. Marketing has transitioned into a highly sophisticated business intelligence endeavor with a technology profile that is complex. In fact, Gartner’s Laura McClellan suggested that marketing may spend more on technology than IT by the year 2017. Technology professionals are in the midst of a transition from hardware maintenance to service delivery. This requires more interpersonal communication and targeted messaging to key stakeholders in the firm.

WHY MARKETING SHOULD LOOK TO TECHNOLOGY FOR HELP

to make sure that technology costs are in line.

The marketing industry has experienced a considerable shift in the past 10 years. Social media, blogs, collaboration and other methods are used to engage prospects in a conversation. With this shift, marketing has increasingly taken over the selection and purchasing of the software to accomplish these tasks.

generated exceeds marketing’s ability to manage. Many marketing solutions are excellent at generating data. They even provide proper funnels for this data to be used to increase the number of opportunities a firm has for new business. However, there are two areas where it may not be managed effectively. The first relates to the client and prospect lists. The solutions implemented may have been put in place without proper integration to other systems, creating a silo of valuable information to the firm. Also, moving opportunities from marketing to sales (or production) may be difficult because of this silo. In addition, much of the information that is generated may be useful in business intelligence platforms to evaluate performance of the entire sales cycle.

Many of these products were the first introduction of cloud, or hosted, products into the firm. This was often driven by two factors: speed and requirements. The speed to implement a solution if a campaign needed large-scale e-mail or social management skills is much faster with a hosted solution. In addition, sending out high volume e-mail campaigns needs special care and maintenance that many IT departments were illequipped to support. However, as this portfolio of products increased, two things happened:

1. The technology portfolio was not managed well. Marketing professionals often select products to do the job, but don’t regularly evaluate the solutions used to see if the licensing is correct, or if others products may do the job that are already owned. In many cases, costs are high because they are not evaluated by someone who is trained

2. The amount of data

In both instances, IT has a central role for the firm. The alignment of business analysts or technology professionals in both areas could help marketing manage two areas they were not trained for.

WHY TECHNOLOGY SHOULD LOOK TO MARKETING FOR HELP IT professionals are in the midst of a shift from hardware to services. This does not mean that hard technology

STATEMENT

skills will go away in every firm. However, over time many of the break-and-fix jobs will be outsourced for the same reasons that marketing shifted to the cloud; speed of implementation and requirements that exceed the current capacity. As this shift happens, the value of IT must transition from the hardware used to managing the data that is produced. Although the common practice in this area is to look at security and compliance, the shift beyond these to value added services will keep technology skills in demand in the firm.

project management and use the evaluation methods honed by software and hardware selection to evaluate many business aspects. These are valuable skills that are underutilized in many firms. Most IT professionals only communicate when the status quo is restored. This is a net zero communication approach and marketing can help. In fact, it would be a pretty simple project for a department that often conducts multiple campaigns to thousands of potential prospects.

MARKETING CAN HELP IT: 1. Define the value of IT to the firm.

One of the best ways to communicate this shift in services and the value to the firm is a positive, educational campaign. If done correctly, this can open ITâ&#x20AC;&#x2122;s doors to working with all departments to improve processes, help with effective

2. Use key marketing concepts to develop a campaign of education. 3. Segment the firm for maximum impact. 4. Use the very tools used to communicate outside the firm to

maximize the value of IT within In closing, this alliance may take some time to hammer out. Each department will need to understand what the other side can provide, and this means laying your cards on the table. What do you need help with? What can you help the other side with? The continuation of this relationship in the firm will benefit both sides. However, it does come with sacrifice. There is a reason tensions have existed between technology and marketing. Make sure to acknowledge this, and work on the next steps together. Keep diligent in future decisions to involve the other side. It may have rough bumps but you canâ&#x20AC;&#x2122;t build alliances with practice and trust. The results will benefit both sides, and most importantly, the firm. Eric Benson is director of technology at Boomer Consulting.

BUSINESS VALUATION

CONFERENCE A new conference to serve our members coming in May of 2013.

We couldnâ&#x20AC;&#x2122;t do everything that we do for our members without our

Preferred Providers & Premier Sponsors MACPA PREFERRED PROVIDERS

MACPA PREMIER SPONSORS

For information about sponsoring MACPA programs or to learn more about advertising with the MACPA please contact Andrew Hood at 443.632.2323 or andrew@macpa.org

Attention CPAs:

Whether A Decision Maker Looking To Upgrade Your Talent, Or A CPA Looking to Upgrade Yourself/Your Skills, Ask Yourself: Who really chose who in joining your company? Are you/your professional staff really at the right level where you should be/you need them to be? Are you/your staff in a position that truly suits your/their personality, values, and professional and personal needs?

Why leave your future to chance? If you’re seriously interested in making the “right” move for your next hire, I can help you. I am an actively licensed CPA in Maryland and Virginia with over 20 years of experience including public accounting (E&Y) and consulting (KPMG), financial accounting (American Cancer Society), internal audit (Moneyline Telerate), and recruiting (Acsys, formerly Don Richards). As a networker who truly enjoys helping others and sharing my career experiences to guide fellow professionals, here is how I can help you: Decision Makers:  Ask you questions, and most likely ask many more questions than other recruiters about your company, duties involved, skills required, corporate culture and more  Work with you on finding the “right” professional that is the “right fit”  Provide you with valuable information about the professionals I work with, the marketplace, what your competitors pay, and more Career Seekers:  Guide you on career paths available in public accounting and industry  Enable you to capitalize on your strengths  Coach you on how to put your best foot forward to find the “right fit”  Advise you when to stay in your current position if that is the right move If you’re interested in working with a recruiter who understands your background, skills, and is genuinely interested in helping you find the “right fit”, then I welcome meeting you!

BETH A. BERK, CPA, CGMA

Independent Recruiter

Phone: 301-767-0670 Email: BethABerk@msn.com

Specializing in CPA Firm, Accounting & Finance Positions in Metropolitan DC & Nearby Suburbs/Baltimore/Richmond/Tidewater

Connecting You To Your Next Hire

Contingency & Retained Staffing Solutions

matching skills, experience & values with needs CPA Ambassador for the state of Maryland, sponsored by the AICPA and Ethics Instructor for VSCPA

Serving clients and professionals as an Independent Recruiter since March 2005

MEMBER NEWS & VIEWSNOTES William Streett Baldwin, CPA, a director in the Audit, Accounting, and Consulting Department at Ellin & Tucker, Chartered, has been elected treasurer on the Board of Directors of South Baltimore Learning Center for 2012-13. The South Baltimore Learning Center is a community-based non-profit organization providing functional literacy and life skills training, in addition to career preparation services, to educationally disadvantaged adults in the Baltimore area. Stephen K. Ball, CPA, CVA, CCIFP, a partner at Gross Mendelsohn and Director of Gross Mendelsohn’s Construction & Real Estate Group, presented a seminar titled, “What You Need to Know About Overhead Rates and How to Maximize Your Compensation,” to the Construction Specifications Institute on Nov. 8, 2012. Melissa Barnickel, CPA, CLTC, has been named managing partner of Baygroup Insurance, LLC, an independent insurance brokerage committed to providing comprehensive consumer education and insurance solutions from highlyrated insurance companies. Arlene Ciroula, AAAPM, chief operating officer of KatzAbosch and firm administrator member of the MACPA, has recently been awarded the Association-certified Accredited Administrator in Accounting Practice Management (AAAPM) by the Association for Accounting Administration (AAA). This prominent designation recognizes Ciroula’s knowledge and professional experience in accounting practice management. She is one of four AAAPM professionals in Maryland. Allen DeLeon, CPA, PFS, a partner with DeLeon & Stang, has been named a 2012 Top CPA in the Washington, D.C. metropolitan area by SmartCEO Magazine. The “SmartCPA Readers’ Choice” section recognizes and celebrates the top accountants in the greater Washington area. This year’s winners exemplify the traits necessary for success: an ethical foundation, attention to detail and a rational, objective point of view in advising their clients. Aileen Eskildsen, CPA, principal and professional development coordinator at Ellin & Tucker, was a participant in the Women in Leadership Panel Discussion held in November

at Towson University. The program focused on women who have made an impact in their industry and community. Topic areas included the paths they have taken to their current positions, challenges faced over the years, and their leadership styles that have been most successful. Squire, Lemkin + Company LLP is pleased to announce Kim Fitzgerald, firm administrator member of MACPA, has received her Accredited Administrator in Accounting Practice Management (AAAPM) certification from the Association for Accounting Administration. Fitzgerald has been firm administrator since the inception of the Squire, Lemkin + Company LLP in 1997. Steven M. Hyatt, CPA, is now a principal at Gorfine, Schiller & Gardyn, P.A. Prior to becoming a principal, Hyatt was a senior manager at the firm and was named a “SmartCPA” by SmartCEO Magazine in 2011. Nancy Johnson, CPA, joined Squire Lemkin + Company LLP as a partner on June 11, 2012. Johnson graduated from Auburn University and specializes in not-for-profit auditing and employer benefit planning. Shelley Keirn, CPA, a financial expert at Stoy, Malone & Co., P.C., appeared on WBAL-TV Sunday news in October to discuss the possibility of tax increases that could occur if Congress did not act before the end of 2012. She is also a frequent guest of the Michael Hodes’ Family Financial Focus show, which airs on WBAL 1090 AM on Saturdays from 1 to 1:30 p.m. Wei Li, MS, a CPA candidate member of the MACPA, has joined Lindsay & Associates as a staff accountant specializing in external audits for local governments and non-profit organizations. Victor Y. Lipnitsky, CPA, financial consultant in insolvency and restructuring matters, is now a director at Invotex. With more than 10 years of experience, Lipnitsky provides financial advice and analytical support to the legal community. Scott E. Murray, CPA has joined Stegman & Company as a senior tax accountant. STATEMENT

JoAnn Platt, CPA, is now a principal at Gorfine, Schiller & Gardyn, P.A. Prior to becoming a principal, Platt was a senior manager at the firm and was named a “SmartCPA” by SmartCEO Magazine in 2011. Gelman, Rosenberg & Freedman CPAs, a Washington, DC-area financial, tax and consulting firm, has acquired the litigation support and forensic accounting capabilities of Greystone Advisory Group LLC, a firm that delivers due diligence and internal, corporate and forensic accounting investigation services. Richard M. Potocek, CPA, MBA, CFE, who founded and led Greystone Advisory Group as executive director since 2009, joins Gelman, Rosenberg & Freedman as a forensic and dispute services principal. W. Andrew Powell, CPA, a partner at Halt, Buzas & Powell, Ltd., has been named one of this year’s Smart CPAs by SmartCEO Magazine. The award is given to CPA superstars who have the traits necessary for success, for themselves and for those they advise: an ethical foundation, attention to detail and a rational, objective point of view in advising their clients. The Smart CPA Readers’ Choice section recognizes MVPs in the Greater Washington accounting world. Marylee P. Robinson, CPA, a consultant and member of the damages team, is now a director at Invotex. Robinson has participated in several recent high-profile trials, including Apple Inc. v. Samsung Electronics Co. Ltd. et al., in which Invotex was engaged to determine the financial damages Samsung should pay for its patent infringement. Virginia Ross, CPA, has been promoted to senior accountant at Dembo, Jones, Healy, Pennington & Marshall, P.C.. David Schriver, CPA, and Kimberly Fusco, CPA, director and manager, respectively, in the Audit, Accounting, and Consulting Department at Ellin & Tucker, Chartered, teamed with Susan Keller, CPA, a principal in the firm’s Tax Department, to speak on accounting for not-for-profit organizations at the Frederick Nonprofit Alliance Forum. Their program, entitled “Not-for-Profit Accounting: Audits / Reviews and the Form 990 Process,” provided tips to strengthen internal controls and included discussions on compliance with IRS requirements and the Form 990; on the difference between an audit and review engagement; and on the relationship between an accountant, the board and management of not-for-profit organizations. Martha Shannon, CPA, has been promoted to senior accountant with Squire, Lemkin + Company LLP. She received her Master’s in Accountancy from George Washington University.

David Sherdel, CPA, has been promoted to manager with Dembo, Jones, Healy, Pennington & Marshall, P.C.. Alan Spero, CPA, has been promoted to officer at Gorfine, Schiller & Gardyn, P.A. He was previously a principal. Spero also has been named a 2012 “SmartCPA” by SmartCEO Magazine. DeLeon & Stang is pleased to announce the addition of Christopher S. Stang, CPA candidate member of the MACPA, to its professional staff. He joins the firm as a staff accountant in the Tax Business Service Department. Rich Stang, CPA/ABV, PFS, of DeLeon & Stang has been elected treasurer of the Montgomery County Corporate Volunteer Council (CVC-MC). The Corporate Volunteer Council of Montgomery County educates businesses on how to create successful volunteer/charitable programs that positively impact the business, its employees, and the local community. Dalton Tong, CPA, executive in residence and director of the University of Baltimore’s Accounting Honors Program, has received the international designation of Charted Global Management Accountant (CGMA). The new credentialing of CGMAs is done jointly by the Chartered Institute of Management Accountants (CIMA) in the UK and the American Institute of Certified Public Accountants, two of the world’s leading accounting organizations. The designation recognizes professional qualification, academic and practical experience, and executive involvement in guiding critical business decisions in industry and government. Joshua Ward, CPA, has been promoted to senior accountant at Dembo, Jones, Healy, Pennington & Marshall, P.C. Kevin Q. Williams, MBA, CPA/PFS, CFP, owner and founder of Williams Financial Services Corporation, has been listed in the September issue of SmartCEO Magazine as one of the Top Certified Public Accountants in the Washington Region for 2012. CPAs selected for this honor exemplify their roles as leaders, innovators and trusted advisors for the businesses they serve. This is the second consecutive year that Williams has been listed. Trevor Williams, CPA, senior non-profit audit manager at Gelman, Rosenberg and Freedman CPAs, participates on the board of the MD/DC/Virginia Chapter of the Lupus Foundation, which won a Center for Nonprofit Advancement Board Leadership Award.

FIRM NEWS & NOTES VIEWS Bond Beebe raised $7,500 for charity with its second annual Bond Beebe Charity Kickball Tournament, held on Sept. 8, 2012 in Chevy Chase, Md. Approximately 100 individuals participated in the tournament, which was sponsored by more than 20 local businesses. All event proceeds benefitted Neediest Kids, a McLean, Va., charity that provides local at-risk students with the basic essentials they need so that they can get the education they deserve. J.H. Cohn LLP and Reznick Group, P.C., two of the top 20 accounting and consulting firms in the U.S., have announced the completion of their combination, forming CohnReznick LLP. CohnReznick is now the 11th largest firm in the country with 25 offices, 2,000 employees and combined revenues of more than $450 million. The combination establishes broad geographic reach for the new firm, with headquarters in New York and offices from Boston to Atlanta on the East Coast – including Baltimore; Sacramento, Los Angeles and San Diego on the West Coast; and a growing presence in Austin and Chicago. The firm also has offices in Chennai, India and Cayman Islands, and is a member of Nexia International, the 10th largest global accounting, tax and advisory network. DeLeon & Stang has been named to the list of top accounting firms by the Washington Business Journal. The list was published in the July issue of the Washington Business Journal. The list is comprised of 50 firms from the Washington D.C. metropolitan area. DeLeon & Stang also has been named the third best accounting firm to work for in the small firm category by Accounting Today. The annual list of “Best Accounting Firms to Work For” was created by Accounting Today Magazine and Best Companies Group.

organizations in Maryland based on criteria that includes a company’s noteworthy product or service innovations, community service efforts and how the company portrays itself as “good place to work.” KatzAbosch has expanded its business valuation and litigation support practice by launching a new whollyowned subsidiary, KatzAbosch Valuation Services LLC. KatzAbosch Valuation Services LLC will continue to provide the same high quality of service expected by clients of KatzAbosch, but with a broadened focus on consulting services such as pre-money valuations for start-ups, SBA loan documentation, transaction consulting, and stock option valuations. Santos, Postal & Company, P.C., has been named as one of the 2012 Best Accounting Firms to Work For. The annual list of “Best Accounting Firms” was created by Accounting Today and Best Companies Group. The firm also launched its new website, www.SantosPostal.com. The redesigned site is part of the firm’s ongoing effort to provide valuable resources to visitors of the site. The site features a number of testimonials, vibrant pictures of staff, and links to current information designed to provide additional value. Squire, Lemkin + Company LLP celebrated its 15th anniversary on Nov. 3, 2012. Firm partners, staff and their guests were treated to a tour of the Spy Museum in Washington, D.C., followed by a cocktail hour, door prizes, visits with Austin Powers and CIA handwriting experts, and an exquisite dinner.

Dembo, Jones, Healy, Pennington & Marshall, P.C., is pleased to announce Weisman, Noble & Associates has merged into the firm. Steve Weisman, CPA, and Tracy Noble, CPA, each have more than 30 years of tax, accounting and management consulting experience. The Gazette of Politics and Business (P&B) recently named Dixon Hughes Goodman one of the 53 top businesses and organizations in Maryland. Produced by The Gazette P&B, the program acknowledges the top 53 businesses and

Photograph: John Squire & Susan Lemkin

STATEMENT

What’s on Line 37?

Your opportunity to make a tax-deductible donation to the Maryland Cancer Fund which provides cancer treatment and screening programs for low-income and uninsured Maryland residents. Please Donate on Line 37 for Tax Year 2012! http://fha.dhmh.maryland.gov/cancer/SitePages/mcf_home.aspx

201 West Preston Street, Baltimore, MD 21201 • 410-767-6213

Martin O’Malley, Governor | Anthony G. Brown, Lieutenant Governor | Joshua M. Sharfstein, M.D., Secretary

MEMBER SERVICES WELCOME, NEW & REINSTATED MACPA MEMBERS! ANNE ARUNDEL COUNTY

MARIA CAPRIGLIONE, CPA

TAMMY W. ROBERTS, CPA

ANTHONY C. ANDREWS, CPA

GEORGE E. CRUSER JR, CPA

KATRINA L. VAUGHN, CPA, MBA

MARIA ANGELES FERNANDEZ, CPA

TIMOTHY CUMMINS, CPA

DIANE WOLO, CPA

BENJAMIN D. HILLIARD, CPA

ELEONORA P. DAILEY, CPA

NAZRE JAMIL, CPA, BBA, MBA

GEORGE FRANZAK JR., CPA

JAMES S. KANTOWSKI, CPA, CFP

SANDRA K. FRY, CPA, CGFM, MBA

DAVID J. KOMLOSY JR, CPA MARLA P. LAHAYE, CPA CHIDIOGO O. MENAKAYA, CPA SHARON J. RASMUSSEN, CPA CAITLIN M. REGAN, CPA BARBARA M. SPONN, CPA, CBM KATHERINE C. ZICK, CPA CAPITAL AREA CHAPTER CHARLENE J. BAXTER, CPA

SONYA Y. GREEN, CPA JEREMY D. HARTMAN, CPA

CENTRAL MARYLAND CHAPTER RAYMOND H. BARLEY JR., CPA, MBA, MSF, ASHLEY BERGMANN, CPA ZACHARY E. BROMWELL, CPA

BRETT J. HOFFMAN, CPA

WILLIAM R. CLAYTON II, CPA, MBA

BERTHIL JAMES, CPA

KATHRYN A. CROSTIC, CPA

COLLEEN A. MCCARTHY, CPA

MICHAEL C. CUOMO, CPA

NICHOLAS O. NOBLE, CPA

MATTHEW G. DUVALL, CPA

BART S. PURDY, CPA, ABV

MICHAEL M. FRIEDMAN, CPA

HAFIZUR RAHMAN, CPA

PATRICIA S. GLOTH, CPA

JANET L. REYNOLDS, CPA

HOLLY C. GOULD, CPA CLARE A. GRASON, CPA

JILL P. HECKLINGER, CPA, MBA BRIAN P. HELLMAN, CPA SUSIE K. HONG, CPA CAROLINE Y. JIANG, CPA CAROL J. MORRISON, CPA ELIZABETH L. MORRISON MRS., CPA URMILA MURALI, CPA

RIVKA SHAFNER, CPA

WESTERN MARYLAND

HELEN M. STEPANEK, CPA

JENNIFER L. ALLEN, CPA

THOMAS S. TRAVERS JR, CPA JOHN B. TUNNEY, CPA THOMAS E. VERMEER, CPA, PHD SUSANNE I. YANCISIN, CPA EASTERN SHORE

JOSEPH A. MUSUMECI JR, CPA

BARBARA G. CROCKER, CPA

CINDI M. POPOWSKI, CPA

EMILY E. DOSS, CPA

MICHAEL A. RISOLO, CPA ANGELENE RZOMP, CPA TIM SAMUEL, CPA

KIMBERLY A. KNUSSMAN, CPA ANDREA H. WILLIAMS, CPA, MBA, CMA

CRAIG SAUERS, CPA

MID-MARYLAND CHAPTER

GRANTLAND C. SAULSBURY, CPA

AMY E. GILBERT, CPA

SUSAN L. SCHIEMER, CPA

LINDSAY M. KUTZER, CPA

MARY E. SCHILLER, CPA

KEVIN M. OWENS, CPA

KEVIN J. DIUBALDO, CPA ANGELA J. SHEFFIELD, CPA, MBA OUT OF STATE ERIC M. ANDERSEN, CPA, ESQUIRE CAROLYN A. BLOCK, CPA GEORGE E. DOOLEY, CPA JULIA D. HALL, CPA JOY L. LIZOTTE, CPA ALFRED R. MICHENZI, CPA JODY L. PADAR, CPA, MST THOMAS E. STOLLE, CPA L. A. WALSH, CPA ONEIL A. WILLIS JR, CPA

WELCOME, NEW CPA CANDIDATE MEMBERS! ANNE ARUNDEL COUNTY

KATHERINE DENNING

SVITLANA S. KERNIZAN

GAYNOR

LAUREN A. GIFFEN

KURT DIMANNA

DAIVA MANARKAITE

KATHRYN P. KOZA

OMAR A. FAHNBULLEH

JUSTIN MOSKOWITZ

ROBIN L. GERSTAD

IAN S. PARKER MATTHEW J. REILLY CHIEDU P. UWANDI AMY XU CAPITAL AREA CHAPTER PATRICIA L. BOWERS ED F. BUSTILLO

MARIYA V. GOLOTYUK MARGARITA HARMAN GREGORY G. HERBOLD SEAN KENNY

CHARLES OBRIEN IV

MARTIN C. HARNISH

DULAMSUREN NATSAG, MBA

TRENA JERRY

MID-MARYLAND

MATTHEW R. PLANK

JENNIFER R. JOINES

CHRISTIAN AHALT BARBARA BALINGER

OUT OF STATE

LAUREN E. WRIGHT

RACHAEL M. KOSMYNA

JOEY D. YODER

DAVON T. NEWTON

YULIYA SMIRNOVA

CENTRAL MARYLAND CHAPTER KEVIN BURDETT BRENDON C. COLL GREGORY B.

ABDOULAYE SYLLA ELIZABETH A. WARD TODD WILCOM EASTERN SHORE PATRICK CASEY

JACQUELINE H. KIM DONALD V. MARTIN

FEKADU BELAYNEH

JEGORS JESKOVS COURTNEY N. SHEENA

F JEFFREY STAPF SOUTHERN MARYLAND SANDRA M. FLEMING

STATEMENT

A YeAr to...

ConneCt eduCAte InspIre

Make 2013 the year you join SmartCEO! Call us today to find out how you can become involved in the SmartCEO community.

IN PRINT Y! SIGN uP TODAmagazine,

ace in the Secure your sp stom an event or cu sponsorship at and y February 1st b e g a ck a p eo vid s! f published rate receive 10% of

thank you again “… I also wanted to SmartCEO. We for introducing us to etings in the last have set 10 to 12 me C-Level Execs/ two weeks alone with three SmartCEO owners as a result of ntly attended.” events we have rece – Steve Lowman p The Capitol Bay Grou Barney ith Sm Morgan Stanley

IN PERSON

IN VIDEO

IN DIGITAL

SmartCEO is an exclusive community of CEOs and business executives, highly regarded mentors and well-respected thought leaders whose experiences benefit their own organizations and the communities in which they serve. SmartCEO’s mission is to educate and inspire the business community through the pages of our award-winning magazine, connections at our C-level events, dynamic and interactive video and access to valuable online resources. Make 2013 the year you join SmartCEO!

“The video is EXACTLY what we wanted. It looks fantastic!” – Kim Martucci Praxis Data Systems, Inc.

For more information, contact Baltimore regional director Suzanne Ratti at (443) 278-9262 or sratti@smartceo.com

www.smartceo.com

“Our partnership with Smart CEO has created a valuable opportuni ty to reach key decision-makers and CE Os in the market. I cannot say enough good things about SmartCEO. Their award s programs and publications are of the highest quality and deliver impactful result s for our business development effort s.” – Patrick M. Byer, Sr. CliftonLarsonAllen

NYPN NEWS The MACPA’s NYPN Committee had a very productive and busy winter season. On Oct. 25, NYPN kicked off its campaign to increase the number of NYPN-focused CPE events with a course on leadership, teamwork, and work / life balance. Thank you to those who attended this pilot program and filled out evaluations. Your insights will help us determine future programs and how we can best support this growing committee. NYPN’s fall happy hour directly followed this class at the Rain Lounge in the Towson Sheraton. We will be expanding the reach of NYPN beginning in 2013. Look for a happy hour near you! In late October, NYPN’s Advisory Board met to brainstorm our end of the year and 2013 events. Many exciting things are still in the works, so keep an eye on NYPN’s Facebook, Linkedin, and Twitter pages for updates. NYPN also was pleased to reveal our new webpage and membership brochure in December. Congratulations again to all of Maryland’s newly licensed CPAs! Thank you to those who attended the MACPA’s “Welcome to the Profession” event on Nov. 1 in Linthicum. Be proud of your achievement – we look forward to watching the next generation of Maryland CPAs thrive! Check out the MACPA’s Facebook page for photos from the evening: Facebook.com/macpa. On Nov. 7, MACPA NYPNs were on hand at Junior Achievement’s BizTown in Owings Mills. Twelve volunteers from various Maryland firms assisted 105 students in completing the program, which specializes in teaching financial literacy to fourth- and fifth-grade students. Junior Achievement is a non-profit organization providing a series of business, economics, and life-skills programs to enhance the

education of young students. Through the BizTown program, students learn first-hand what it takes to create and operate a business, and to earn and manage money. Earlier this year, the MACPA partnered with JA in an effort to impart greater financial awareness to Maryland youth through programs such as this. See JA’s page (http://jamaryland.org/ programs/ja_biztown) for more details on their excellent opportunities. Promoting financial literacy is a big part of being a CPA. With the help of our members, the MACPA is helping lead the way in educating local students. NYPN can play a powerful role in relating to these young students and help guide them on the right path to financial success. In the coming year, NYPN plans to get involved with other JA programs such as JA in a Day. The MACPA Holiday Spectacular, brought to you by NYPN, was held on Dec. 5 at the Engineer’s Club in the beautiful Mt. Vernon neighborhood of Baltimore. Our members gathered to celebrate the holiday season and enjoyed food and drink with friends and colleagues. Food and monetary donations were collected to benefit The Maryland Food Bank. Lastly, if you are interested in joining the NYPN Roadshow team, we are looking for presenters. Our Roadshow presentation details the benefits of joining a professional association and helps educate young CPA professionals, CPA candidates, and firm leadership about NYPN and MACPA. If your company would like to request a Roadshow presentation, contact us at nypn@macpa.org. NYPN is on Facebook, Twitter, and Linkedin. Check us out today at macpa.org/nypn.

you’re invited Upcoming Events SAVE THE DATE - BALTIMORE AREA WINTER HAPPY HOUR When: Thursday, Jan. 10, 5:30-8 p.m. Where: Blue Sage Cafe & Wine Bar SAVE THE DATE – ANNE ARUNDEL AREA WINTER HAPPY HOUR When: Thursday, Jan. 17, 5:30-8 p.m. Where: TBD

CPA DAY (181000) When: Wednesday, Jan. 16, 7:30 a.m. -1:30 p.m. Where: Governor Calvert House, Annapolis SAVE THE DATE- BIZTOWN VOLUNTEER DAY When: Tuesday, May 14 Where: Junior Achievement, Owings Mills We are in the process of scheduling future events. Stay tuned for updates by joining the NYPN Committee and going to the MACPA’s NYPN page at MACPA.org/NYPN. You may also contact nypn@macpa.org with questions or suggestions.

what is NYPN? NYPN is an organization committed to connecting new / young professionals to the MACPA, protecting the integrity of the profession, and helping new CPAs and CPA candidates achieve their goals. NYPN is a place where new CPA professionals can make contacts in the profession, get involved in the community and get the support they need to be successful. The requirements to be a part of NYPN are CPA candidates (working on or having achieved the 150-hour threshold) or current CPAs under the age of 40 and/or licensed for fewer than five years.

TOP 10 REASONS TO GET INVOLVED: 1. Camaraderie 6. Commitment 2. Insight 7. Charity 3. Professionalism 8. Community 4. Development 9. Responsibility 5. Growth 10. FUN!

get involved GET TO KNOW OUR NYPN ADVISORY BOARD AND FIND OUT FIRST-HAND WHAT WEâ&#x20AC;&#x2122;RE ALL ABOUT: Chair: Jeff Klima, SC&H: jkilma@scandh.com Vice chair / chair-elect: Nick Hollander, L&H Business Consulting: nhollander@lhbusinessconsulting.com Secretary / treasurer: Debra Hale, Stoy, Malone & Company : Dhale@stoycpa.com Past chair: Diana Scatliffe, Reznick Group : Diana.Scatliffe@cohnreznick.com

LEADERSHIP BOARD Activities / Professional development chair: Stephen Hohne, Hertzbach & Company: shohne@hertzbach.com Public relations / outreach chair: Jennie Hammett, Gorfine, Schiller & Gardyn: jhammett@gsg-cpa.com At-large member: Eric Nigro, GSE Systems, Inc. : Eric.Nigro@gses.com At-large member: Barrett Young, The Green Abacus : barrett@thegreenabacuscom

JANUARY 2013

CLASSIFIEDS mergers & acquisitions PRACTICES FOR SALE:

Baltimore-Washington Corridor CPA Practice gross revenues $190K - profitable practice serving a high-quality client base and exceptionally strong fee structure. Turn-key opportunity with knowledgeable staff in place to assist in transition. For more information call 1.800.397.0249 or visit www.accountingpracticesales.com to see listing descriptions, inquire for details and register for free email updates.

QUALITY CPA FIRM WISHES TO ACQUIRE PRACTICE OR ACCOUNTS in Baltimore/

Washington/Annapolis area, or possible association with retirement-minded practitioner. “Top Dollar Paid.” Reply in strictest confidence to 410.539.7100, or File No. 63-87.

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 needed to help you find the right fit for your firm and to negotiate the best price and terms. To learn about our risk-free and confidential services, call Bradley Holmes at 1.800.397.0249 or email bradley@accountingpracticesales.com.

PEER REVIEWED ROCKVILLE, MD CPA FIRM interested in acquiring practice or accounts

in Washington metropolitan area, from retirementminded sole practitioner. Reply in confidence to File no. 28-91.

peer review Do you need an Engagement, System, or Pre/Post Issuance Peer Review? We are experienced and up-to-date on the latest regulations. Call us today to perform your review professionally and efficiently. Charles Coker, CPA. 703.931.3290 x 108 or email Charles.coker@cpa-coker.com.

office space TOWSON: 2,087 square feet of second floor office space available for lease at 660 Kenilworth Drive (directly across from Towson BMW). Landlord will build out to suit tenant’s needs. Lease rate includes full utility and janitorial service. Attractive two-story professional building with convenient and ample free parking. On-site ownership by progressive mid-sized CPA firm offering possible collaboration with the right firm. Excellent access to I-695, I-83, Timonium and downtown Baltimore. To discuss or see, call David Miller at 410.321.9558.

EXECUTIVE OFFICE SPACE AVAILABLE

with multiple amenities and free parking. Our business center provides a professional environment, features well-appointed reception areas, offices and conference facilities. Enhanced communication and administrative support services are also available. For terms and availability, please call us at 301.263.8519 or e-mail Steeley.Associates@gmail.com. Location zip is 20817.

WANT TO SUBMIT A CLASSIFIED AD? To submit a classified ad, please visit http://www. macpa.org/classifieds/public/search.aspx, or contact Amy Moran at 443.632.2319, or by email amym@macpa.org.

CONFIDENTIAL ADS: Replies to confidential ads will be addressed to the file number in care of: Amy Moran MACPA 901 Dulaney Valley Road, Suite 710 Towson, MD 21204 Properly addressed replies will be forwarded to the advertiser unopened. Replies that are not properly addressed will be opened only to determine contents and then forwarded to the advertiser.

STATEMENT

USS

UNIVERSAL SOFTWARE SOLUTIONS, INC. TEL: (410) 358-8851

P. O. BOX 5866

www.ussi-md.com

BALTIMORE MD 21282-5866

MARYLAND PERSONAL PROPERTY SOFTWARE 2013 EDITION

Prepares and Prints Maryland Personal Property Tax Returns Features:       

             

 

Multi-User-Network Compatible.

Easy installation. Full screen editing and Pull-Down menus make data entry simple and efficient. Data files can be stored on any drive/folder. Error checking routines prevent common mistakes. On screen totals - Updated with each entry. Prints government approved returns on plain paper: Form 1—Corporations, LLC’s, LLP, etc.; AT3-51— Partnerships and Sole Proprietorships; AT3-75— Bank, Saving & Loans and Trust Companies. Multiple location capability for all entities. Assessment calculations with user adjustable tax rates and assessments. On screen print preview. Print from print menu or Preview screen. Print options - Entire return, Batched returns, single and multiple pages. Prepares and prints a collated signature ready return. Prints Extensions-Selected Client(s) or all Unfiled Returns. Prints client lists - All clients, filed returns and unfiled returns. Information saved and updated annually. Easy to use Multi-Featured word processor or link to MS Word for full feature processing. Word processor can be used for Form letters, Transmittals, Filing Instructions, Billing, etc. User friendly - Screens simulate actual return. Unlimited number of clients. Concise, easy-to-read user’s manual. Automatic Internet updates. Free unlimited support.

SPECIAL 50% DISCOUNT FOR FIRST TIME USERS:    

$125.00 PLUS 6% Md sales tax. This is a full working edition except it does not convert prior year data. Enjoy the time saving and ease of use. Print professional looking returns.

For more information call : 410-358-8851

2013 Edition — $250.00 plus 6% MD Sales Tax.

Please send one copy of MD “TPP” - 2013 edition to:

N a m e _____________________________________________________________________________________________ C o m p a n y _________________________________________________________________________________________ Ad d r e s s__________________________________________________________________________________________ C i t y / S t a t e / Z i p __________________________________________________Telephone_________________________

Md residents: Add 6% sales tax. Please enclose full payment with order.

Credit card payments—Please call 410-358-8851

MARYLAND ASSOCIATION OF CERTIFIED PUBLIC ACCOUNTANTS

Dulaney Center II 901 Dulaney Valley Road, Suite 710 Towson, MD 21204 | www.macpa.org 410. 296.6250 | Fax: 410.296.8713

SAVE 2013

THE

DATE

Upcoming Events

CPA DAY Jan 16 // Governor Calvert House // Event ID: 181000 // macpa.org/cpaday

QUARTERLY FINANCIAL LEADERSHIP SERIES Feb 28 // MACPA Towson Center // Event ID: 171040 // cpa.tc/QFLF

2013 BUSINESS AND INDUSTRY CONFERENCE Apr 19 // Turf Valley Resort & Conference // Event ID: 121011 // macpa.org/businessindustry2013

2013 GOVERNMENT AND NOT FOR PROFIT CONFERENCE Apr 26 // Martin’s West, Baltimore // Event ID: 121000 // macpa.org/GNFP2013

EMPLOYEE BENEFIT PLAN CONFERENCE May 6 // Sheraton Columbia Hotel // Event ID: 121012 // macpa.org/employeebenefit2013

2013 MACPA LEADERSHIP ACADEMY May 6 - 8 // Crowne Plaza, Timonium // Event ID: 371001 // macpa.org/leadershipacademy

2013 BUSINESS VALUATION CONFERENCE MAY 2013 // Linthicum // Event ID: 121013 // macpa.org/businssvaluation2013

QUARTERLY FINANCIAL LEADERSHIP SERIES May 14 // MACPA Towson Center // Event ID: 171039 // cpa.tc/QFLF

2013 INNOVATION SUMMIT May 17 // Martin’s West, Baltimore // Event ID: 191008 // macpa.org/2013summit

BEACH RETREAT

Jul 2 - 5 // Ocean City, MD - Clarion Hotel Fontainbleau // macpa.org/beachreatreat2013