MACPA Statement // July 2012

MACPA’S

July 2012 | Maryland Association of Certified Public Accountants, Inc.

UPDATE

MACPA’s 2012-13 Board of Directors PAGE 6

ANOOP MEHTA WANTS YOU TO MAKE A DIFFERENCE The new MACPA Chairman knows it takes everyone in the profession to conquer its complexity PAGE 4

WHAT’S INSIDE COSO updates internal control framework Page 10 Want to better serve your clients? Start by listening Page 24 What to look for in a software partner Page 26

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CONTENTS July 2012 | Maryland Association of Certified Public Accountants, Inc.

CHAIRâ&#x20AC;&#x2122;S COLUMN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 FEATURES Want to make a difference? It takes a profession. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 MACPA 2012-13 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 COSO updates internal control framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Want to better serve your clients? Start by listening . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 What to look for in a software partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . .26

DEPARTMENTS News & Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Business & Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Personal Financial Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Practice Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 High Tech Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Tax Corner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

MEMBER NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32 CLASSIFIEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 ADMINISTRATION

PRODUCT DEVELOPMENT

Amy Stumme amy@macpa.org

Akesha Brown akesha@macpa.org

TECHNOLOGY

Debbie Zizwarek debbie@macpa.org

Doug Shaner doug@macpa.org

TECHNICAL SERVICES

Michael Tobias mike@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 Day dee@macpa.org Pamela C. Devine pam@macpa.org

Donna Lewis donna@macpa.org Amy Puente amyp@macpa.org

Joselin R. Martin, CPA Amy Myers, CPA Robert Tarola, CPA

Paige Sawicki paige@macpa.org

Renee Winsky

Laura Dorsey-Shaner laura@macpa.org

MACPA EXECUTIVE DIRECTOR

Katoria Tinsley katoria@macpa.org

2012-2013 BOARD OF DIRECTORS OFFICERS

SENIOR STAFF J. Thomas Hood III, CPA tom@macpa.org MACPA DEPUTY EXECUTIVE DIRECTOR Jacqueline E. G. Brown jackie@macpa.org

Anoop Natwar Mehta, CPA, Chair DIRECTOR OF FINANCE AND ADMINISTRATION Byron Patrick, CPA.CITP, MCSE, Vice Chair Skip Falatko, CPA

Chris Dougherty chrisd@macpa.org

Marianela R. Del Pino-Rivera, CPA, skip@macpa.org Secretary / Treasurer

MEMBER SERVICES

MaryBeth Drusano marybethd@macpa.org

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

Julianne Part julianne@macpa.org

Joann Francavilla joann@macpa.org

DIRECTORS

Jeannie Richardson jeannie@macpa.org

Megan Gratz megan@macpa.org

Lisa Cines, CPA

Ashlee Stem ashlee@macpa.org

Emily Groncki emily@macpa.org

Michael Manspeaker, CPA

Laura Swann, CPA lauras@macpa.org

JULY 2012

Samantha Bowling, CPA Shane Grady, CPA

WE WANT TO HEAR FROM YOU! See below to submit content Bill Sheridan MACPA Dulaney Center II 901 Dulaney Valley Road Suite 710 Towson, MD 21204 For content submission: bill@macpa.org www.macpa.org/submit feedback@macpa.org P: 410.296.6250 F: 410.296.8713 Toll free: 800.782.2036

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 Ashley Stearns, Graphic Designer Amy Moran, Advertising Sales

CHAIR’S COLUMN BUILDING A BRIDGE ACROSS THE GENERATIONAL CHASMS BY ANOOP N. MEHTA, CPA, CGMA VICE PRESIDENT AND CFO, SCIENCE SYSTEMS AND APPLICATIONS, INC

Generational conversations have typically taken an us-vs.-them tone, haven’t they? • “You younger folks don’t understand what work is all about.” • “You old-timers don’t understand that we don’t work the way you do.” • “Kids these days want everything and haven’t earned anything.” • “The fossils in charge of this place won’t give us a chance to prove ourselves.” • “Those youngsters just don’t get it.” • “Those leaders just don’t get it.” The so-called experts want us to believe that this is what the generations think of one another. If you stop, lend an ear and really listen, though, you start to hear something very different.

It was revolutionary. There were no arguments or harsh words. Just conversation and (we hope) understanding. We’re seeing this more and more today. • The MACPA’s Leadership Academy is producing class after class of next-generation CPA leaders who are ready to put their visions of the future into play. • Groups like Jody Padar’s I C Opportunities are blazing new trails by embracing new technologies and bringing vendors into the discussion of how CPAs can better serve their clients. These are the conversations that will keep the profession relevant for years - make that decades - to come.

Instead, it turned into a lesson in generational curiosity and cooperation.

We’ve been talking for years now about the “leadership gap” - the shortfall of CPA leaders that presumably will follow the expected tsunami of baby boomer retirements. The conventional wisdom says there are not nearly enough Gen Xers to replace the retiring boomers one-for-one in the next few years, and that we’ll have to bring millennial leaders up to speed quickly if we want a seamless leadership transition.

Older (pardon me for putting it this way) CPAs “crashed” the session in search of CPE. What they got instead was a lesson in the issues that impact the profession’s youngest members, like flexibility, leadership and technology.

And now we’re hearing that, thanks to the struggling economy, many boomers might not be ready to retire just yet. If true, that would leave a generation of new leaders without leadership positions to embrace.

In turn, the young CPAs had the opportunity to hear what the older generation had to say about them.

In the meantime, the generations must figure out a way to iron out their differences and work produc-

Back in May, the MACPA held a town hall meeting for members of the association’s New / Young Professionals Network. The event was billed as an opportunity for the youngest members of the profession to learn more about the issues that directly impact them.

tively side by side. It can be done. Generational expert Cam Marston says each group has work to do. Millennials must learn to communicate effectively with their employers, co-workers and clients. Boomers must be willing to pass along “tribal knowledge” by mentoring and providing opportunities to the next generation of leaders. Gen Xers, a smaller group that tends to get lost between the much larger boomer and millennial generations, can drive positive change by engaging the two massive generations on either side of them. Last month, I had the opportunity to attend the MACPA Leadership Academy and spend some time with the new / young professionals and was not only impressed but also relieved that we are in good hands, provided we give them the opportunity. There’s enough work here to go around, and that makes this generational conversation more important than ever. Here at the MACPA, we think it’s time to take that conversation to the next level. We’re sowing the seeds for a generational conference later this year that will provide the resources and information that old and young CPAs alike will use to address many of these issues. It’s time, after all. Bridging the gaps that separate the generations is about more than workplace harmony. It’s about ensuring the CPA’s standing as “trusted business advisor” for years to come. All that’s at stake is the future of the profession itself. I’m honored to take the reins as chair of the MACPA’s 2012-13 Board of Directors, and I look forward to working with you on these and other important issues during the coming year. Thanks to the past and current MACPA leaders for giving me this wonderful opportunity. STATEMENT

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Want to make a Difference? It takes a profession

Conquering complexity requires input from ALL CPAs, says incoming MACPA Chair Anoop Mehta B Y B I L L S H E RIDA N , CA E If you’re like most MACPA members, you don’t do much with the association once your dues are paid. Anoop Mehta wants to change all of that. The incoming chair of the MACPA’s Board of Directors says the future of the association, maybe even the future of the profession, lies in what he calls “Connect 80” -- the notion of engaging more CPAs and connecting them to all that their state association does on their behalf. “We do a good job reaching out to about 20 percent of members,” said Mehta, vice president and CFO of Lanham-based Science Systems and Applications, Inc. “My goal is to try to engage the other 80 percent to the extent I can. If we don’t, our profession is in danger of falling behind.” That sense of urgency is a product of the changes and complexity that have knocked CPAs for a loop in recent years. Technology, globalization, the economy, legislation, regulation -- they’re presenting CPAs with countless challenges.

They’re offering just as many opportunities, and that’s Mehta’s concern: CPAs who don’t take the initiative and get involved now may miss some of those crucial opportunities. “The world is getting more complex and the boundaries are becoming blurry,” Mehta said. “Our traditional roles (of filing tax returns and conducting audits) are being redefined. As trusted business advisors, we’re being asked more and more to do a lot of other things. We need to make sure the 80 percent stays connected and takes advantage of all the MACPA has to offer.” Other issues have his attention as well, including: State fiscal matters: States from coast to coast are struggling to solve their budgetary puzzles, and Maryland is no exception. Does the answer lie in spending less or raising more revenue? The MACPA will offer the state the collective wisdom of its members by creating a tax force that will offer suggestions for how Maryland can best address its fiscal woes. Generational issues: The long-

held belief is that the coming wave of baby boomer retirements will create a leadership gap and offer younger workers the opportunity to step into leadership roles. That might not be the case, says Mehta. Economic and financial worries might force boomers to stay in the workforce -- and keep Gen Xers and millennials on the leadership sidelines -- longer than expected. “That could affect our ability to tranfer knowledge from one generation to the next,” Mehta said. Still, Mehta finds plenty to be optimistic about, particularly when it comes to (a) the profession’s evolving role as trusted business advisor, and (b) the people who make up profession itself. “These people show genuine care for others, conduct themselves with integrity and have respect for others. They’re the types of people who inspire me. Seeing what they’ve accomplished inspires me to try to do what they’ve done and enhance it.” That care for others extends well beyond the professional world, Mehta said. Bill Sheridan is chief communications officer with the MACPA. STATEMENT

“

I think it’s imperative that all of us in the profession give back to our communities,” he said. “We hear that all the time, but I truly subscribe to that idea. CPAs have so much to offer beyond our technical knowledge. Those intangibles really can make a difference.

“

MACPA’s 2012-13 Board of Directors

The MACPA’s 2012-13 slate of officers and directors was voted into place at the association’s Annual Meeting, held June 26 in Baltimore. Here’s a closer look at this year’s Board of Directors.

Officers ANOOP NATWAR MEHTA, CPA // CHAIR Employer: Science Systems and Applications, Inc. Title: Vice president and chief financial officer

An MACPA member since 1992. Serves on the MACPA’s Government Contractors Committee and chaired the committee from 2001-03. Serves as treasurer and member of the Board of Directors for the Maryland Space Business Roundtable. Also serves on the National Advisory Board of the Diversified Investment Advisors. Chaired Maryland’s Governor’s Workforce Investment Board (GWIB) Aerospace Industry Implementation Leadership Team (2006-09). Graduate of Leadership Howard County, class of 2010. A member of the AICPA, the National Contract Management Association and many other civic organizations. Has taught classes on various topics affecting government contractors. Has appeared on public television to discuss aerospace industry workforce issues in Maryland. A seventh-degree black belt in Tae Kwon.

BYRON PATRICK, CPA.CITP, MCSE // VICE CHAIR Employer: Simplified Innovations Inc. Title: Co-founder / CEO

An MACPA member since 1999. A member of the MACPA’s Structure and Governance Under 35 Task Force in 2000. A founding member and past chair of the MACPA’s New / Young Professionals Network (NYPN). Remains active as a NYPN advisor. Current member of the MAPCA’s Technology Committee. Has participated in a number of additional MACPA task forces, committees and is a frequent presenter on technology topics. Named one of CPA Practice Advisors’ “40 under 40” for each of the past three years. A member of the AICPA’s IT Executive Committee. Co-founded Simplified Innovations after five years as IT director at KAWG&F, where he helped the firm become the first to have virtual offices in Second Life.

MARIANELA R. DEL PINO-RIVERA, CPA // SECRETARY/ TREASURER Employer: Sole practitioner

An MACPA member since 1984. Also a member of the AICPA. Winner of the MACPA’s 2005 Public Service Award. Founder of Learning Power, Inc., a 501 C(3) corporation that operated a tutoring center for disadvantaged youth in Bowie. Named Woman of the Year in 2000 by the Bowie-Crofton chapter of the Business and Professional Women’s Association. Served as vice chair on the Governor’s Commission on Hispanic Affairs from January 2004 to January 2008. Currently serves on the Board of the Prince George’s Hospital Foundation and the Finance Council of St. Camillus Church.

STATEMENT

Officers Cont. ALLEN P. DELEON, CPA , PFS // IMMEDIATE PAST CHAIR Employer: DeLeon and Stang, CPAs Title: Partner and founder

An MACPA member since 2003. Chair of the MACPA’s Legislative Committee. A member of the MACPA’s Political Action Committee and Education and Career Task Force. Also a member of the AICPA, the AICPA’s governing Council, the GaithersburgGermantown Chamber of Commerce (where he serves as immediate past chair of the board), the Association of Certified Fraud Examiners and the Catholic Business Network of Washington D.C. Also a certified Personal Financial Specialist and a certified PIN security instructor. A member of the Maryland Chamber of Commerce and an avid golfer.

Directors SAMANTHA BOWLING, CPA Employer: Garbelman, Winslow, Benish, Deck, Grannell & Ewaski (GW) Title: Partner MACPA member since 1998. CPA licensed in Maryland, Virginia and the District of Columbia. Active member of the MACPA Southern Maryland Chapter Board since 1999, currently serving as treasurer. Has also served as president and / or secretary for the Southern Maryland Chapter Board. In July 2005, was the first woman partner admitted to GW. A 1993 magna cum laude graduate from Salisbury University. Member of the American Institute of Certified Public Accountants, the Greater Washington Society of Certified Public Accountants, the AICPA Employee Benefit Plan Audit Quality Center and the Maryland Chamber of Commerce. Team captain for the Avon Walk for Breast Cancer since 2005.

LISA CINES, CPA Employer: Dixon Hughes Goodman Title: Managing partner, Rockville office An MACPA member since 1983. Has 30 years of public accounting experience. Before joining Dixon Hughes Goodman, served as managing officer, chairman of the board, and partner in charge of business and corporate development for a nationally ranked regional accounting firm. Prior to that, spent 20 years working with federal government contractors providing audit, tax and consulting services for emerging and mid-market companies. A frequent speaker on matters related to accounting firm management and leadership development. An active participant in many industry and business organizations and community groups. Her efforts have been recognized by several media and industry outlets, and in 2005, she was named one of the Washington Business Journal’s “25 Women Who Mean Business.” A member of the AICPA Board of Examiners, the Junior Achievement Board of Directors, the Montgomery County Chamber of Commerce Board of Directors, the University of Maryland Accounting Department Advisory Board, Rockville Economic Development Board, the Montgomery County Chamber of Commerce Foundation Board, and the AICPA Board Task Force on FASAB Rule 203 Review. A former

JULY 2012

Directors Cont. SHANE GRADY, CPA Employer: Boal and Associates, CPAs Title: Manager An MACPA member since 1999. Experienced in accounting, financial planning, estate planning, taxation, technology and business consulting. A member of the AICPA, the Garrett County Chamber of Commerce, the Community Trust Foundation Board of Trustees. Chair of the Garrett County Chamber of Commerce Legislative Affairs Committee. Former member of the Maryland Chamber of Commerce Board of Directors and the Greater Oakland Business Association Board of Directors. Has previously served the MACPA as a member of the Nominations Committee and the Western Maryland Chapter Executive Committee.

MICHAEL MANSPEAKER, CPA Employer: Smith Elliott Kearns & Company, LLC Title: Member, director of accounting, audit and quality control An MACPA member since 1979. A former member of the Auditing Standards Board of the American Institute of Certified Public Accountants. Has served on several Auditing Standards Board task forces. Currently a member of the PKF North America Accounting and Auditing Committee, the Board of Directors of the MACPA and the MACPA Accounting Standards Task Force.

JOSELIN R. MARTIN, CPA Employer: Hayles and Howe, Inc. Title: Financial Manager An MACPA member since 2000. First became active with the Business and Industry Committee as a result of attending the MACPAâ&#x20AC;&#x2122;s Business and Industry Conference; now serves on the conference committee. Attended her first CPA Day as an industry member in 2008. Board member of Institute for Certified Construction Industry Financial Professionals since 2008. Member of the Accounting and Reporting Committee of Construction Financial Management Association since 2006.

AMY MYERS, CPA Employer: University of Maryland Medical System Title: Director of finance An MACPA member since 2005. Responsible for consolidated financial reporting and treasury operations for UMMS, a multi-hospital, not-for-profit healthcare system. Formerly an auditor and a state / local tax analyst at KPMG LLP. A graduate of Loyola University of Maryland. A member of the Healthcare Financial Management Association (HFMA) and a participant on the Membership, Sponsorship, and Community Service Committees of the Maryland Chapter of HFMA.

STATEMENT

Directors Cont. ROBERT TAROLA, CPA Employer: Right Advisory LLC Title: President An MACPA member since 1988. Former CFO of W.R. Grace & Co. and MedStar Health, Inc., multi-billion dollar businesses with complex multi-national operations. Currently CFO and chief administrative officer of The Howard University under a contractual arrangement with Right Advisory. Previously a partner with Price Waterhouse LLP. A director of public mutual funds sponsored by Legg Mason, Inc. A director of publicly traded TeleTech Holdings Inc., where he chairs the audit committee, and The American Kidney Fund. An audit committee financial expert. Former at-large member of the governing Council of the American Institute of CPAs and a past member of its Assurance Services Executive Committee. Holds licenses to practice accountancy in three states and the District of Columbia. Served on the Standing Advisory Group of the Public Company Accounting Oversight Board, and currently a member of to its Investors Advisory Group.

RENEE WINSKY Employer: Bay One Group, LLC Title: President and founder At-large member of the MACPA’s Board of Directors. Bay One Group provides consulting services in economic development, government and university relations, entrepreneurship, and technology commercialization. Among many volunteer positions, serves on the Board of the Chesapeake Innovation Center, Leadership Maryland, and UMBC Research Park Corporation.

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NEWS & VIEWS

Proposed update to COSO framework addresses changing business environment Since 1992, Internal Control – Integrated Framework has provided valuable guidance for companies when developing and assessing internal control systems. In fact, it became the most widely used internal control framework in the world. But with advances in technology and business operations, the time was right for the framework to be updated so it could remain relevant and useful. The Committee of Sponsoring Organizations of the Treadway Commission (COSO), which released the original document, has now issued an exposure draft for public comments through March 31. The proposed updated framework was revised in light of changing complexity and conditions to make it easier for companies to design and assess their internal control and, ultimately, gather reliable information for sound decisionmaking and achieve their objectives. Companies using the proposed updated framework should be better equipped to improve their agility, confidence and clarity. However, companies that have effective internal control systems will not experience additional responsibilities under the clarified framework.

BUILT ON EXISTING STRENGTHS COSO built on the strengths of

the original document by adding timely revisions to address the impact of significant subsequent developments. The final proposal is based on insights and perspective from a broad range of professionals in industry, as well as representatives and observers from academia, government agencies and not-for-profit organizations. While the revisions represent worthwhile enhancements to the guidance, companies should be aware of what the proposal will not change. The definition of internal control and the objectives of the framework, for example, remain the same. Internal control is still defined as a process intended to offer reasonable assurance of meeting three objectives: • Effective and efficient operations. • Reliable financial reporting. • Compliance with appropriate laws and regulations. The new proposal also retains the five components of a system of internal control: • Control environment. • Risk assessment. • Control activities. • Information and communications. • Monitoring. The new framework does not set a higher threshold for internal control system maintenance or design. It will, however, serve as a valuable internal control resource for all companies.

MAKING USEFUL UPDATES

One significant enhancement is the codification of internal control concepts introduced in the original framework into 17 principles and supporting attributes that companies can use in managing risk and improving performance in an increasingly complex and fastmoving environment. Additional enhancements help companies address: • New expectations on corporate governance; • The globalization of markets and company operations; • New business models; • Greater complexity of laws, regulations, standards and rules; • Expanded expectations for competencies and accountabilities; • New attitudes and expectations on the prevention and detection of corruption. With its principles-based approach, the proposed framework allows users to apply judgment in maintaining and improving internal control. It should offer managements and boards of directors the flexibility to expand the core framework’s use beyond financial reporting. It offers separate guidance on external reporting, addressing internal control over information not included in published financial statements. It should also allow users to apply internal control to a wide range of entities in different industries and at various organizational levels. STATEMENT

Companies using the framework should be in a better position to spot and analyze risks and create workable approaches to them. Details on comments and related resources: “The proposed framework is a significant enhancement to an important resource,” said Tom Hood, CPA, chief executive officer of the Maryland Association of CPAs. “Our members in business and industry and auditors should familiarize themselves with the proposal and offer COSO any comments they may have. In a rapidly changing environment, it’s beneficial to receive timely insights into necessary adjustments to or new perspectives on the internal control process.”

Download the document and provide comments through ic.coso.org. Release of the final framework is expected in fall of 2012. The AICPA is providing a number of resources to help CPAs understand the proposed update. Visit aicpa.org/COSO for additional information and tools on the updated framework. COSO consists of five organizations and provides thought leadership and guidance on internal control, enterprise risk management and fraud deterrence. The AICPA is a member of COSO.

RELATED CPE The MACPA is offering the following programs related to COSO’s proposed framework: Sept. 24: COSO Internal Control: One Size Does Fit All http://cpa.tc/10e | Event ID: 111208 Dec. 4: IT: Risks and Controls in Traditional and Emerging Environments http://cpa.tc/10f | Event ID: 111126 A

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NEWS & VIEWS

Debt: The new equity – and a major economic dislocation B Y C O L . F R A NK RYA N , CPA

IN 2008 THE FINANCIAL WORLD, AS WE KNEW IT, CHANGED. Many of the principles we were taught were invalidated, it seemed. “Save for retirement and live happily ever after” was the conventional wisdom. Then the market crashed. In his book The Age of Turbulence, Alan Greenspan discusses the importance of the rule of law in a healthy economy. Dr. Greenspan notes that the vast majority of business transactions go through normally because of trust and the “rule of law.” But what if the rule of law changes such that the circumstances under which normal commerce is undertaken becomes disrupted? In his book, The Big Short: Inside the Doomsday Machine, Michael Lewis effectively questions the very assumptions under which businesses evaluated risk, particularly credit default swaps. Yet the sudden increases in debt forgiveness, starting with the GM bankruptcy, have wreaked havoc with the traditional understanding of debt versus equity, of stocks versus bonds.

Students had been taught that debt was a cheaper form of financing for a corporation than equity capital. Quite simply, interest was tax deductible, dividends were not.

decimated.

Traditionally, financial advisors advised clients that as one was closer to retirement, you should consider shifting some of your investment funds into bonds (debt of the issuer) rather than equity. Bonds were considered less risky than equity investments. The principle portion of debt was considered safer than equity because of debts preference in bankruptcy.

Bondholders of other Euro Zone debt must be equally concerned about the solvency of the various European sovereign debt. Even the United States’s debt rating has been downgraded.

Investment managers were advised, by legal counsel, that it was prudent for a trustee to invest funds in a “balanced portfolio” of debt and equity that reduced overall portfolio risk. A fiduciary’s responsibilities under ERISA are very clear and specific and include a “prudent man” rule such that an advisor must act with care, skill, prudence and diligence under the circumstances. Then came 2008, and the next bubble burst. The General Motors bankruptcy saw massive debt forgiveness as a result of the bankruptcy and the value of GM bonds were

In 2012, a write-down of Greek debt occurred that allowed Greece to avoid default. Over €100 billion were written off in this transaction.

To further exacerbate the debt fiasco, more than $2 trillion of toxic assets are still held by the Federal Reserve, Fannie Mae and Freddie Mac. The conventional wisdom in academia and in business has been that bonds are a cheaper and safer form of investment than equity for the investor. When a bond only has the ability to earn an interest rate with no upside earnings potential, are bonds a “prudent” investment? If the principal of the bond is not assured and given priority claim over other debts and equity, the very valuation models for the bond instrument become invalidated. The Greek settlement was no better. Nor was the Fannie Mae and Freddie Mac settlements any STATEMENT

better for the long-term survival of our economy. All that has been done is to undermine the very foundation of the “rule of law” that Dr. Greenspan describes in his book as being essential to the normal functioning of an economy.

The risk of default and inflation as well as the lack of security of the underlying bond, when impaired, make a bond potentially a negligent form of investment for a fiduciary under the circumstances we have in today’s markets.

In reviewing the number of publicly traded companies that pay dividends in excess of a 3 percent yield (more than 1,000 companies) when yields on “safer” federalbond issues are far less, one must question whether or not a fiduciary is being responsible by investing in a bond, let alone a government bond. I would think that the fiduciary is being prudent should the bond repayment be relatively assured. However, when the value of the bond is undermined by the courts or government, then the soundness of a bond must be questioned.

Third, the ability of governments to raise debt financing may become impaired when the principles of commerce are undermined. In that event, the economies of the world will become severely deleveraged immediately as investors scramble to the “safety of equity” markets.

The implications of the undermining of the value proposition of the bond and the “rule of law” are severe. First, for the investor, the value of investing in bonds will have been severely degraded. Second, for the fiduciary in considering an asset allocation, for which bonds are included in the portfolio, may no longer be truly “prudent” when dividend yields on equities are so much higher than fixed income yields. With an equity investment, there is downside potential, but there is also upside potential. With the bond, there is only downside risk. JULY 2012

traded and non-profit organizations. He can be reached at FRYAN1951@aol.com Col. Frank Ryan, CPA

The only issue that is preventing continued massive deleveraging of our economy and a depression from occurring is that no one knows where they can invest safely. If our nation is serious about stabilizing this economy, we must work together to re-establish the rule of law that permits debtors and creditors to engage in commerce with the rights of both groups protected and respected. When people or institutions are vilified because they have lent money, they will stop lending. Perhaps this is why our economy has not yet recovered. Our economy will not recover until we, as CPAs, reaffirm the mutual rights and responsibilities of both debtors and creditors and re-establish a stable, balanced rule of commerce. Col. Frank Ryan, CPA, is a retired Marine Reserve colonel who served in Iraq and, briefly, in Afghanistan. He specializes in corporate restructuring and lectures on ethics for the state CPA societies. He has served on numerous boards of publicly

BUSINESS & INDUSTRY

Seven tips for better cash flow forecasts B Y MA RY E L L E N BIE RY Cash flow forecasts, the vital estimates of how much cash your business will have to continuing operating, are notoriously tricky because the many variables involved. Even so, accountants and other financial experts say there are several steps you can take to improve their accuracy.

1. BE CONSERVATIVE. Be skeptical about your managers’ and your own forecasts, especially when it comes to sales and expenses. “One incorrect assumption can have a large effect on your cash flow,” says Paula Griffo, chief financial officer of VoIP Supply, an Amherst, N.Y., provider of VoIP (voice over Internet protocol) solutions. “I always underestimate cash inflows and overestimate cash outflows to be on the safe side.”

2. BE AWARE OF COMMON PITFALLS. For example, since you know accounts receivable is an area that can quickly ruin your cash flow forecast, improve your AR processes. David Douglass, a partner with Atlanta-based professional services firm Tatum, recommends that as customers go past 30 or 60 days, start calling, and set and enforce penalties. “If you are the CEO, send a message to the management team that invoicing customers as soon as possible, cash collections and cost controls are the lifeblood of any business, (and) are therefore

‘everyone’s concern,’” he says. “If the CEO doesn’t take cash forecasting very seriously, nobody else will.”

3. UPDATE REGULARLY. Perform and update cash flow forecasts frequently enough that you’re not surprised by the updated forecast and, as a result, caught with insufficient time to response.

4. LEARN FROM MISTAKES. Strive to improve accuracy by comparing your actuals to your forecast so that you can learn from the process.

5. HOLD OTHERS ACCOUNTABLE. Several experts say that while the CFO is ultimately responsible for developing and updating a cash flow forecast, sales, manufacturing, shipping, accounting and other parts of the business should be held accountable for their roles in helping to achieve the forecast. Business owners and managers can structure performance quotas to meet a cash flow forecast and manage workers to those quotas.

a matter of sitting down, looking at what you have and some whatif scenarios, and saying ‘I’m going to try that.’” Don’t be afraid to ask your accountant for help; he or she would probably welcome the opportunity to be more of an advisor for your business. “It’s a thought process, and someone has to walk you through it,” Prosser says.

7. SEEK AUTOMATED HELP. Cash flow forecasts are typically a standard part of budgeting or business modeling applications. “If you are considering an upgrade to your business modeling / forecasting processes, be sure that any applications being considered provide an integrated cash flow forecast that ties to the income statement and balance sheet,” says Douglass. Mary Ellen Biery is a research specialist at Sageworks, a financial information company and maker of the ProfitCents suite of financial analysis applications. She is a veteran financial reporter whose works have appeared in The Wall Street Journal and on Dow Jones Newswires, CNN.com, MarketWatch.com, CNBC.com, and other sites. She received her undergraduate degree from Wake Forest University, where she graduated cum laude, and her master’s degree from the University of North Carolina at Chapel Hill.

6. SEEK ADVICE. “Everybody wonders, ‘What’s the secret to cash flows?’ and there isn’t one,” says Lauren Prosser, manager of advisory services at Sageworks. “There’s never a black-and-white answer. It’s always STATEMENT

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PERSONAL FINANCIAL PLANNING

Estate planning for same-sex couples and domestic partners B Y STE VE N E . SH A N E While few people enjoy talking about death or disability, basic estate planning documents such as a will and power of attorney are essential documents to have, especially for those who meet the definition of a “domestic partner.”

THE LEGAL ENVIRONMENT The relationships of married couples are closely regulated by each state’s family law rules. By contrast, except in a few states, lesbian and gay couples cannot legally marry. The relationships of same-sex partners, like many heterosexual unmarried partners, are governed generally by contract law. Most state laws do not recognize the status of same-sex couples no matter how committed they are to their relationship. Currently, there are eight jurisdictions that recognize full marriage equality for same-sex couples. These states are Massachusetts (2004), Connecticut (2008), Iowa (2009), Vermont (2009), New Hampshire (2009), Washington D.C. (2010) and New York (2011). Maryland recently became the eighth state to allow same-sex marriage. Even though several states do not permit same-sex marriage, there are a few states that do recognize valid same-sex marriages entered into from other states (e.g., New Mexico, New Jersey (limited) and California). These states have created a legal relationship that provides financial and other

rights similar to marriage (e.g., civil union or registered domestic partnership). However, most states still have bans on same-sex marriages and still prohibit civil unions or domestic partnerships. Under the Defense of Marriage Act (“DOMA”), marriage is defined as a heterosexual relationship and none of the Internal Revenue Code provisions that specifically reference “spouses” or “marriage” apply to same-sex couples. Also, any state may refuse to recognize a marriage or comparable legal relationship between persons of the same sex, even if the partnership was valid in another state. Where the legislatures have declined to pass a DOMA law, voter initiatives have attempted to put a similar law on the books. More than 40 states have statutes in place that define marriage as between a man and a woman exclusively, while 30 state constitutions expressly prohibit same-sex marriage. This puts same-sex partnerships in a disfavored position not only with respect to the many tax provisions as applied to gift tax, estate tax, and income tax, but also with respect to family law provisions such as alimony and child support. According to a survey conducted by PNC Wealth Management, there are 1,138 rights afforded to married couples by the federal government (e.g., Social Security,

veteran benefits, estate and gift taxes, etc.). Because of the confusing patchwork of rights afforded to same-sex couples across different state lines, having a comprehensive plan in place covering all aspects (including death and disability) is vital, regardless of how the relationship is recognized.

ESTATE PLANNING Estate planning is the process of compiling a list of assets, obligations (i.e., the “estate”) and making decisions about how the estate will be distributed after death. If an individual does not have a will, living trust or other legal designations for transferring property, his property will be distributed under the state’s intestacy laws. State laws generally require that property pass to certain specified family members, such as a spouse, children or parents. In order to protect each other, couples (legally married or partnered) should properly plan for death and disability. Lack of proper planning could result in an individual’s partner being evicted from their home, denied access to shared possessions or having to wage legal battle against relatives. Also, if the relationship is not recognized by the law, the partners are not related to each other and intestacy rules will not apply. STATEMENT

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PERSONAL FINANCIAL PLANNING ESTATE AND GIFT TAX PLANNING When one partner dies, the devise of his or her estate to their partner often results in a higher gift, inheritance and estate taxes on transfers than a similar married (opposite-sex) couple because such transfers are not transfer tax exempt. Therefore, it is important to plan for the potential imposition of estate or inheritance tax at the death of the first to die.

place: • In Bakersfield, Calif., a couple rushed their child with a high fever to the emergency room. The female couple were previously registered as domestic partners. However, the hospital permitted only the biological mother to accompany the child. Normally, hospital policy allows both parents to stay with a child during his or her treatment, but the second parent was forced to stay in the waiting room.

Under federal law, a married couple enjoys the benefits of the unlimited gift and estate tax marital deductions. A married person can transfer unlimited assets to his or her spouse by gift during their lifetime or by bequest at death with no federal gift or estate tax consequences. The same federal gift and estate tax deductions are not available to same-sex couples. With the passage of the same sex marriage bill, the state of Maryland will soon offer the same protections from Maryland estate taxes for same-sex married couples (though it may be too soon for anything to happen if this bill goes to referendum).

• A woman from the state of Washington collapsed while on vacation in Florida. The woman’s partner apparently had documentation of their relationship and a power of attorney. However, the woman claimed hospital officials told her she was not considered a family member under Florida law. After spending hours trying to persuade hospital personnel to allow her visitation, her partner’s condition had deteriorated and she eventually died soon after convincing the hospital to allow her visitation.

POWERS OF ATTORNEY FOR FINANCIAL MATTERS

Many opposite-sex couples already have written agreements known as pre-marital agreements, or “pre-nups.” A same-sex couple often has similar concerns about whether to enter into such an agreement as an opposite-sex couple.

A financial power of attorney requires that the person choose an agent to make decisions regarding finances and property. The following two examples from a 2009 New York Times article, “How Hospitals Treat Same Sex Couples” by Tara Parker-Pope, demonstrates the importance for same-sex couples or domestic partners to have documents in

WHY A LIVING-TOGETHER AGREEMENT?

pre-determined agreement, the parties could opt for another form of dispute resolution and stay out of court. A living together contract can be comprehensive, covering all aspects of the relationship, or specific, such as a specific purchase (e.g., a vacation home).

CONCLUSION It is important for unmarried partners to have legal documents such as wills and powers of attorney in place. Without these documents, partners may not be able take care of one another in the event of illness and the survivor may be left with nothing at the first partner’s death. Estate planning is often an uncomfortable topic to discuss with clients or loved ones. However, properly preparing for such contingencies will bring peace of mind to your clients and their families. Steven E. Shane, is a principal at Offit Kurman and a member of the Estates and Trusts practice. He provides strategic counseling to clients with estate planning, charitable giving, and business continuity planning while minimizing estate, gift and generation-skipping transfer tax exposure. If you would like to speak with Mr. Shane regarding the contents of this article, estate planning for domestic partners and married couples, please contact him at (301) 575-0313 or sshane@offitkurman. com.

By having an agreement in place, the court should not need to decide whether the marriage is valid in order to interpret a valid contract. Alternatively, with a STATEMENT

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NOTES

PRACTICE MANAGEMENT

Strong demand expected for forensic, valuation services F RO M T H E A I C PA Forensic and valuation services have long been considered hot practice areas, and there is now convincing evidence to support this idea. A new study of professionals working in this niche conducted by the AICPA Forensic and Valuation Services Section has found strong demand for these services. The vast majority of survey participants expected that demand to remain robust during the coming two to five years, along with an increase in litigation and regulatory enforcement. The study also identified the greatest challenges facing this niche in the near future and provided valuable insights into trends in different segments of this practice area.

A PRACTICE AREA AND ITS CHALLENGES When they provide forensic accounting services, CPAs use specialized knowledge and investigative skills to collect, analyze, and evaluate evidence and interpret and communicate findings in the courtroom, boardroom or other legal / administrative venue. Clients are typically attorneys and businesses in a broad range of industries.

TRENDS IN FVS SEGMENTS Forensic accounting is a multifaceted field that encompasses many different kinds of engagements. The survey offered numerous insights on

trends in various segments of this niche, including the following: • Computer forensic investigations were a robust area, with 83 percent expecting greater demand in the next two to five years, with the mean anticipated increase at 20 percent • Among those who handled divorce cases, roughly half had seen a spike in demand in the past year. • Fifty-three percent expected more pre-packaged bankruptcies in the next two to five years. • Among economic damages engagements, the greatest demand was expected in cases involving breaches of contract, business torts and intellectual property. • When it came to financial statement misrepresentation, respondents expected a strong focus in engagements on revenue recognition and valuation of assets carried at fair value. • Slightly more than half foresaw rising demand for outside consultants versus in-house staff in the next two to five years from companies looking to prevent or detect fraud. The most commonly reported frauds included false payment requests, check and credit card fraud and employee theft. They tended to occur in operations, accounts payable and

sales, as well as marketing, among others. • For valuation professionals, the areas with greatest peaks in demand within the past year included shareholder / partner disputes, contractual disputes, family law, and gift and estate issues. In the next two to five years, respondents expected higher demand for a variety of services, including shareholder/partner disputes, family law, contractual disputes and bankruptcy, insolvency and reorganization.

KEEPING TALENT ON TAP Given the robust need for forensic and valuation services, it’s clear that staffing, the top challenge identified by survey participants, will remain a key issue in this field. In the survey, roughly onequarter said they had hired more professionals recently and many planned to do more hiring in the next two to five years in a variety of areas. Approximately one-half of those who participated in the study said they devoted more time to forensic work during the past year, with an impressive average increase of 20 percent. The majority of business and industry professionals studied in a companion survey said they used outside valuation experts, underscoring the demand for these services.

STATEMENT

As a result, it’s fair to assume that the recruitment, retention, and continuing education of FVS professionals will be an ongoing priority. While this scramble for talent may pose challenges for firms in this field, it also attests to the likelihood of strong employment

TECHNOLOGY CHALLENGES Another top issue on the top five list is technology. Practitioners may also confront problems in staying current with advances in technology that can significantly alter and improve the way they conduct research or approach other areas of their practice. “For smaller FVS firms, there are increasing challenges in keeping up with the evolving technologies necessary to respond to client needs,” says Ronald Seigneur, CPA, ABV, CFF, ASA CVA, of Seigneur Gustafson LLP in Denver. When it came to the use of technology in this area, 81 percent thought computer-based controls would bring significant improvements in fraud detection. At the same time, respondents believed that the greatest technology-related threats to organizations in the coming two to five years included: • Use of mobile devices (28 percent).

• Malicious insiders (19 percent) and remote access (19 percent).

• Social networking (18 percent). • Malware (10 percent).

In addition to the study of CPA forensic accounting professionals, the AICPA FVS Section also surveyed professionals in business and industry (B&I) to gather their feedback on working with forensic accountants.

In this study, 54 percent said that in the next two to five years, their companies’ efforts to prevent or detect fraud would heighten their use of outside consultants versus in-house personnel. With more clients turning to them for help, the B&I survey results provide valuable information for FVS members on the trends affecting their clients, how they are responding to them and which services they may need from outside experts, including details on approaches to preventing and detecting fraud, experiences with economic damages and financial statement representations cases and shareholder disputes.

A WEALTH OF PRACTICE OPPORTUNITIES Forensic and valuation services are clearly a thriving field, one in which a main challenge going forward will be maintaining adequate staffing to handle a wealth of practice opportunities. Access and read the full AICPA FVS Trend Survey Whitepaper on the AICPA’s website. Those seeking more information on this niche should look into the many resources available through the AICPA Forensic and Valuation Services Section.

A LOOK AT BUSINESS AND INDUSTRY JULY 2012

PRACTICE MANAGEMENT

Serving government contractor clients? These resources might help As the clock struck midnight on Sept. 15, 2011, the transition period of the United States Army’s Base Realignment and Closure (BRAC) passed into history. The consolidation of some military resources to three of Maryland’s Army installations was complete. Maryland’s Fort Meade, Fort Dietrick, the Aberdeen Proving Ground, and surrounding communities were the recipients of an influx of hundreds of government contractors along with tens of thousands of civilian and contractor jobs. What does this mean for the Maryland CPA? For starters, if you’re not currently serving government contractor (GovCon) clients, it’s just a matter of time before you are. A quick poll of members of the MACPA’s Government Contractor’s Committee produced a list of resources that will get you under way. Without further ado, here is a review of some resources, with a description from the resource itself if available:

BOOKS • CCH Guide to Government Contracting (bit.ly/I6vRtd): This guide provides a layman’s explanation of the contracting process without the full text of laws and regulations, so you

don’t need to spend time wading through more cumbersome references. • DCAA Contract Audit Manual (1.usa.gov/IaG06U): The purpose of this manual is to create a centralized one-stop-shop for guidance on all aspects of defense contracts. • Cost Accounting Standards Board Rules and Procedures (bit. ly/JBHIgd): This product contains the Cost Accounting Standards regulations, standards, and preambles as well as the related Federal Acquisition Regulation (FAR) Part 30 administrative requirements. The preambles set forth the legislative background, intent, and purpose of regulations promulgated by the Cost Accounting Standards Board, saving hours of research time in locating this hard-to-find information. • Accounting Guide for Government Contracts, by Paul M. Trueger: Although out of print, this tried-and-true guide gets rave reviews from seasoned practicing CPAs and has been known to turn up on Amazon.com. • Contracting with the Federal Government, by Margaret Worthington and Louis Goldsman: Like Trueger’s guide, this book is out of print but available on Amazon.com. • AICPA Audit and Accounting

Guide: Federal Government Contractors: This guide is also out of print but available through Thomson Reuters’ PPC website.

ONLINE SUBSCRIPTIONS • CCH Government Contracts Reporter (bit.ly/JPVTLX): Now you can research the full body of law and news relating to government contracts in a few clicks of the mouse. The CCH Government Contracts Reporter delivers unmatched electronic search capabilities to help you instantly pinpoint the information needed for your contract. You get full text of all pertinent federal government contracting laws and regulations, including the current Federal Acquisition Regulation (FAR) and its supplements. Detailed, fully annotated explanations help you interpret these official documents, which reflect more than 35,000 decisions from various federal courts, administrative boards, and the Government Accountability Office.

WEBSITES • Acquisition Central (www. acquisition.gov): Acquisition.gov is an e-government initiative that aggregates federal acquisition content by providing one website for regulations, systems, resources, opportunities, and training. This website was designed to create an easily navigable resource to share the efforts to achieve its vision of more efficient and transparent STATEMENT

practices through better use of information, people, processes and technology. The full text of the FAR is also available here. • Regulations.gov (www. regulations.gov): This is your source for U.S. government regulations and related documents. • Defense Acquisition University’s Ask a Professor (1.usa.gov/ Jt0uIG): This website is a Department of Defense resource for asking acquisition and logistics questions concerning policies and practices. • Center for Development Excellence (www.cderesources. com): This website helps local development practitioners, organizations and governments bid on, win, and implement social and economic development projects while sharing knowledge, ideas, and tools that strengthen local institutions and networks committed to development.

JULY 2012

• U.S. General Services Administration (www.gsa.gov): This has several useful resources for vendors seeking to do business with GSA. • GAO FDSY (1.usa.gov/uIPEA): Featured collections are displayed to the right of the page. • The Library of Congress (1.usa.gov/iZaESp): The “More Legislative Information” provides a place to search for public laws relating to a particular contract or grant.

• The MACPA (www.macpa. org): Most instructional courses are available to all accountants. The Government Contractor’s committee is available only to member CPAs. • The Greater Baltimore Committee (www.gbc.org) Government Contracting Committee. • The AFCEA—Aberdeen, Md., chapter (www.afcea-aberdeen. org).

• Defense Contract Audit Agency (www.dcaa.mil).

• The AFCEA—Frederick, Md., chapter (www.afceafrederick. org).

GROUPS AND ORGANIZATIONS

• Fort Dietrick Alliance (www. fortdetrickalliance.org).

The following groups and organizations provide contexts for CPA advisors to build relationships with other GovCon professionals for the sake of sharing expertise, making inquiries, and giving and receiving referrals.

• Fort Meade Alliance (www. ftmeadealliance.org). This list of GovCon resources is certainly not exhaustive, but robust enough to get CPAs started in providing advisory services to GovCon clients.

PRACTICE MANAGEMENT

Want to better serve your clients? Start by listening. B Y A N D R E W ROSE Chris Perrino of Barnes Dennig presciently notes, “No one ever listened their way out of a sale, but plenty have talked their way out of one.” Significant parts of our time should be spent listening. We should listen to our prospects, our audience and our staff. We can learn from our referral channels. It is easy to recall that we are given two ears and one mouth for a reason. At times, though, it appears there is a disconnect between our innate, attentive listening skills and the reality of the moment. After seeing more than one prospect become turned off by a CPA so enthralled that someone would stand still and pretend to take an interest in the intricate world of taxation, I decided to reach out to my peers for help. On a forum dedicated to accounting marketing professionals, I asked for feedback for their best practices on instilling listening skills in their accountants. It appears that a nerve was jangled given the amount of e-mail this generated. As I suspected, this is a larger issue that needs some massaging. Dana Bottorff, the marketing and business development manager for the respected firm G.T. Reilly & Company, puts it this way: “Listening begins with asking the right questions. Don’t use

questions to show how smart you are. Ask questions that get to the heart of what you need to learn. Ask questions that actually elicit the information you want. Don’t work solely from a canned list of questions.” Don’t be afraid to take notes and ask clarifying questions. Make eye contact and tilt your head slightly to give the non-verbal cue that you are attentively listening. Don’t assume that this is a natural behavior for many accountants. Their comfort zone begins with processing a tax return or performing an audit. If they are moved to the adjoining concentric circle of talking about these services to a prospect, things get shaky. Ask them to cross-sell other services and they react like a possum confronted by a speeding car (as Bob Lewis of Visionary Marketing so cleverly observes). One marketer (who shall remain anonymous) shares a couple pet peeves: The accountant who doesn’t press the “do not disturb” button on the phone when meeting a prospect in their office. How would it look if I took a casual call from my spouse in the middle of a partner meeting? Don’t look at your cell phone unless you have a reason to suspect that the mothership is ready to beam you up. Then there are the other electronic distractions. One of our partners is so wedded to his device that he’d

rather stare at it than your shoes. Another marketer has a humorous name for them. “Tech turds are what I lovingly call cell phones that are placed on the table during meetings. It’s a ‘I’m listening to you but as soon as something more important comes along, I’m going to pay attention to that instead.’” Sigh. Leave it up to Lisa Tierney to have some salient points. She instructs: • Quiet internal dialog and mindchatter. Fight the temptation that you know what they are going to say.

• Create internal images or a movie of what they are describing. This will help you to stay in the present. • Backtrack what you are hearing to get agreement and support clarity. It might help to reiterate, “So, what I hear you saying is …” • Listen for limiting beliefs or pre-suppositions woven into the content of conversation that your client may not be aware of consciously. These clues come around words like “always” or “shouldn’t.”

• Imagine yourself as a good detective: patient, curious, logical, looking for clues. This perspective will help you to stay unemotional about the outcome; detached views are more beneficial for conflict resolution.

• Pay attention to non-verbal cues STATEMENT

such as tone, gestures, and facial expressions. Eyes looking up to the left mean remembering, as opposed to the upper right, which represents imagining.

• Carefully determine when to insert an appropriate question that will guide them to discovery. If you remain truly present without your own agenda, this should come instinctively.

“Catch accountants at a time of day that works for them (not you), so if Digby is a morning guy, be in the office at 7 a.m. if you need to get his listening ears,” Sarah says. “If Emmaline is a late-night gal, stay late and ask her for 10 minutes at the end of the day. I believe that they really do want to listen, but sometimes it’s all in the art of timing.”

Sarah Milans, marketing coordinator with Reston, Va.-based RyanSharkey, LLP, understands that occasionally it is a diurnal issue.

It may also be the case that the poor listener is simply buried with work and doesn’t have the time to digest what is being said. Sarah utilizes what she calls the three-pronged approach when speaking to her accountants: “Tell them what the issue / problem / question is, why they need to care, and what you recommend. I find this to be extra helpful because

• Three to four seconds vs. seven to eight seconds. When you ask a question, let more time elapse than is normally comfortable to you, to allow that moment of discovery.

{

My number is… 100

it’s a strategic approach and when people don’t have much time to listen (or aren’t good listeners), if you can tell them why they need to care and how you’ll solve it for them, they tend to listen better.” By consciously focusing on listening skills, the benefits both internally and externally will only improve. Now if all of this fails, one witty marketer encourages the use of shock collars to reinforce the listening rules.

Andrew Rose, is director of marketing and business development for Naden/ Lean, a Maryland-based CPA firm. Andrew can be reached at arose@nlgroup.com or on Twitter at @nadenlean.

}

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HIGH-TECH SOLUTIONS

What to look for in a software partner B Y C H R I S TI N A P. H A ISS, CPA , M CP, CIT P If you use a software package like Microsoft Dynamics GP, Microsoft Dynamics CRM, Sage Accpac*, Sage MAS90* / MAS200* or ComputerEase in your business, you’ve probably had some experiences working with software partners (also known as VARs, or value added resellers). Whether you are looking for a partner to implement a new software system for your business or to provide ongoing support or customization for an existing system, one thing remains true: Not all software partners are created equal.

HOW WELL DOES YOUR SOFTWARE PARTNER KNOW YOU? Whether your big goal is compliance, to strengthen operations to keep your bottom line healthy despite increasing costs, or to restructure your processes to handle increased transaction volume, your software partner needs to know you very well – and be regularly engaged with you and your business – to bring continuing value How well does your software partner keep up with changes in your business? Does your software partner respond with viable solutions to meet your changing needs?

EVALUATE YOUR RELATIONSHIP WITH YOUR SOFTWARE PARTNER When your business is considering a new initiative or changes to internal processes, do you include

your software partner in those discussions? If not, why? Have they not executed well in the past? Does your partner have a high turnover rate and not retain its best employees? Perhaps your partner is qualified to help but there is little or no communication. The true value of a good client / software partner relationship comes from ongoing friendly, candid conversations. The relationship works best if it’s been developed over time and not when there is a crisis in the business or with the software. Susan Moore, Pandora Jewelry’s business systems administrator, reflects on what it’s like to work with a software partner that is not a good fit. “You want to be able to build a relationship with your software implementation specialist,” Moore says. “Larger software partners often have staff rotations in place so you can’t get too attached to your favorite consultant. Larger firms often have many levels of consultants, making it a challenge to keep everyone on the same page, and making it hard to know who to call for different problems.” If you and your software partner have nurtured a good relationship over time, you can expect to be understood quickly and easily when there is a need for them to help with a change in your business. A really good software partner will often recommend a change before you even know

about the need for the change.

An excellent software partner will be engaged with numerous customers, skilled in the latest tools, knowledgeable about accounting regulations and functions, and maintain their own sphere of business partners that add value. And they obviously must execute … not just talk the talk. Phillip Kennedy, IT manager at Pandora Jewelry North America, shares what he enjoys about his software partner: “They are always willing to roll up their sleeves and dive into problems. They see things through and give solid technology and business advice along the way. Their willingness to get really involved in our business – which is not a trait of every consultant out there – is what keeps us a happy customer.”

SOFTWARE CREDENTIALS MATTER, BUT PEOPLE MATTER MORE People run and impact your business. Software is merely a tool to help you run your business. Remember, people are behind your software. Your software partner should be familiar with the dynamics of your team and their capabilities. You’ll get much more out of your software partner when you allow them to interact with your people, beyond the chief financial officer or chief information officer.

WHAT YOUR SOFTWARE PARTNER NEEDS FROM YOU STATEMENT

We often suggest to our customers that they develop their employees’ technical skills in order to use the software better. Not only do we love having a “resource” inside your business, but it is often more cost efficient to use your own people, as opposed to us, for certain things. A responsible software partner will tell you when it’s beneficial to you to use your own people for things, as opposed to calling in help from the outside. Let your software partner have an outside, objective viewpoint. Let your partner help evaluate and suggest the skills that your people should have. With a fresh outside perspective, we often see underlying motivations, such as personal objectives, as well as potential obstacles when it comes to an employee’s potential to effectively using the software you’ve invested in. We believe our job is to help you think more broadly, uncover information, resources, and the potential to do things more efficiently, and to execute the best plan. When making operational changes, don’t believe that one discussion should culminate in a final plan to execute. An outstanding consultant is one who can say, “We all need to step back and process what we’ve discussed, and we will come up with a smart solution.”

FINDING THE RIGHT SOFTWARE PARTNER There is a sea of software vendors to choose from, and evaluating them can be overwhelming. Software manufacturers might JULY 2012

recommend a vendor to you. But beware – manufacturers often reward vendors who have reached their sales quotas by recommending them to companies looking for a new partner. The vendor they recommend may or may not be the best fit for you. “I’d rather do business with a firm that has a very high ratio of revenue from service, rather than one that has very high sales numbers,” says Moore. “This lets me know they’re working for their customers instead of just selling software.” This might be an obvious point, but beware of a software partner who tries to sell you a specific software package before learning all about your needs. There is not a single software package that is the best fit for every business need.

Does the software partner show a genuine interest in wanting to know about changes in their business, processes, personnel and operations? *Notes: Sage Accpac is now called Sage 300 ERP. Sage MAS 90 is now called Sage 100 Standard ERP, while Sage MAS 200 is now called Sage 100 Advanced ERP. Christina P. Haiss, CPA, MCP, CITP, is a member of Gross Mendelsohn’s Technology Solutions Group. She helps businesses use technology to improve and track profitability, improve efficiency, and address financial reporting needs. Contact Chris at (410) 685-5512 or chaiss@gmacpa.com.

MORE ON TECHNOLOGY Tech-related news, articles and resources are available on our website: www.macpa.org/Technology

Do your own homework. Check a software partner’s website. Make sure they have the relevant certifications. But remember, certifications should be a given. Dig deeper to make sure the software partner has a proven reputation of building great and long-lasting relationships with customers, and delivering what’s needed. The best way to evaluate a software partner before you hire them is to talk with their customers. In addition to asking about their implementation process, ask what happened after the implementation. Was the software partner available for questions and adjustments? Does the software partner keep in touch and provide training and helpful support to users?

TAX CORNER

Five things your clients need to know about sales tax B Y R AY B I G L EY A N D JE N N IFE R WARAWA Sales taxes are an increasingly important source of revenue for states seeking to make up for revenue shortfalls. Yet, because sales tax is a pass-through tax, accounting professionals and business owners may disregard it compared to the state and federal income tax landscape. The risks associated with the failure to comply with sales tax laws should not be underestimated. Sales taxes typically represent more than one-third of a state’s revenue. In many states, the percentage is much higher. In Maryland, for example, 24.7 percent of state revenue was derived from sales tax in fiscal year 2010, according to the Federal Tax Administration. More than likely, your clients are filing returns and paying their fair share, but are you completely certain they are complying in the most efficient manner possible? As an accounting professional, it makes sense to fully educate yourself on sales tax, learn about the areas where your clients might have exposure, and help them understand the implications for their business. Chances are your clients stand to benefit, but they may be unaware they even have a need. There are five key points your clients should know about sales tax. Armed with this information,

they will be in a better position to reduce the risk of penalty and audit and improve their accounting practices.

1. BOUNDARIES AND RULES EXIST An understanding of sales tax compliance would not be complete without looking at several factors. Nexus: In the arena of sales tax collection, one important principle always takes center stage: nexus. In the legal sense, nexus describes the connection between two or more participants, interests or concepts. In the world of sales tax, nexus refers to the connection a company has with a state. Nexus is the legal connection that empowers a state to demand collection and remittance of a business sales tax. If your clients have business in more than one state, nexus laws affect them. Origin vs. destination: Maryland has a destination-based local tax versus an origin-based local tax. If a sale is taxable, the company must determine which jurisdiction is imposing the tax so it can apply the correct rate, which means the company must first understand the distinction between originand destination-based sourcing rules. In origin-based states, any transactions originating and terminating within the state are sourced to the origin jurisdiction,

so the sale is subject to the local tax rate imposed by the jurisdiction where the sale originated (retail location or ship-from location). Transactions crossing state boundaries are usually sourced to the “destination” regardless of the state’s sourcing rule. Streamlined sales tax: Maryland has not adopted the Streamlined Sales and Use Tax Agreement (SSUTA). In an effort to simplify sales and use tax collection and administration by retailers and states, 44 states, the District of Columbia, local governments and the business community signed on in 2000 to support the SSUTA. The agreement minimizes costs and administrative burdens on retailers that collect sales tax, particularly those operating in multiple states. The SSUTA encourages “remote sellers” selling over the Internet and by mail order to collect tax on sales to customers living in the Streamlined states, and levels the playing field so that local brickand-mortar stores and remote sellers operate under the same rules. This agreement ensures that all retailers can conduct their business in a fair, competitive environment. To date, 24 of the 44 states have passed legislation to conform to the SSUTA, yet most of the large states – California, Illinois, New York, Pennsylvania and Texas – have not adopted the Streamlined STATEMENT

Sales and Use Tax Agreement. Recently, states have developed and tested legal theories in order to push the boundaries of nexus. Some have met with success and some have not. Most disconcerting, however, is that some theories are still being vetted in state and federal courthouses. Attributional affiliate nexus (Amazon laws): If you have clients selling over the Internet, you’ll want to know about the “Amazon law,” an affiliate concept currently being pushed by several states. The “Amazon law” opens the door for states to require sales tax collection in situations where a company has only limited commercial activities within a state. Amazon.com, for example, is already collecting sales taxes in several states, including Kansas, Kentucky, New York, North Dakota and Washington state, but has yet to enter into an agreement with Maryland. As Internet marketing becomes more complex and entangled, there are more opportunities for otherwise remote activities to trigger sales tax nexus in a given state.

2: REPORTING CAN BE COMPLEX Understanding the complex calculation and returns and remittance data that can exist for reporting sales and use tax will go a long way in a company’s preparation of its sales tax reports and payments. Calculation: Rules for taxability and calculation vary from state to state and, in some states, by locality. Keeping up with different sales vs. seller’s use tax rates for the exact same jurisdiction — and determining applications to a specific sale — can be complicated. Automated tax calculation solutions that maintain the data for all the JULY 2012

rates and rules are a necessity for businesses that operate in multiple states. Returns and remittance: Once a business decides who it owes taxes to, it must file state and local returns with various taxing authorities. A listing of basic sales and use tax state and local returns for a business can exceed 450 forms. For a multi-location company in multiple states, it’s not uncommon to file more than 100 sales / use tax returns per month, while nationwide retailers can easily file more than 1,000 sales / use tax returns every single month. As a result, companies doing business in multiple states with limited resources have no choice but to find an automated returns solution.

3: TECHNOLOGY TO THE RESCUE Automation is one option a company has for preparing its sales tax reports and payments, but others exist as well. Manual: In a manual calculation environment, clients load state, county, city, and local tax rates into their accounting software, manually updating the tax tables for rate changes every time they occur in each jurisdiction in which the company ﬁles. Hybrid: Clients subscribe to a rate table update service that populates the tax rates in their accounting software for all jurisdictions in which they ﬁle. Individual item taxability and customer exemption status are manually updated. Manual and hybrid solutions are cumbersome and mistakes easily occur if work is not checked and double-checked. In addition, these solutions generally cannot determine when to apply seller’s use tax instead of sales tax, and do

not allow for accurate calculation of tiered tax rates. Fully automated: Locally loaded solutions and hosted, cloud-based solutions allow for more accurate calculation, offering automated tax return preparation, or returns prepared and filed through a service provider. Locally loaded solutions are typically two-tiered: (1) The application that actually calculates the sales tax when sales are made, and (2) data is used from the first tier to automatically prepare sales tax returns. Automated solutions should be SSUTA-certified in order to ensure complete compliance.

4: CLOUD SOLUTIONS PROVIDE TOTAL AUTOMATION, EFFORTLESSLY Hosted solutions for sales tax preparation leverage significant advantages of the cloud. These solutions are ideally suited to handle the constant rate and jurisdiction changes that are the norm in sales tax compliance. Many solutions also offer turn-key sales tax compliance. Here, taxes are not only calculated by the hosted provider, but the returns and payments can all be made by the same provider without the need to transfer data from one system to the other. All changes are tracked and applied by a central service accessed through the cloud. There is no need to load software, perform monthly updates, or provide hardware to run a cloud solution; all of this is done by the service provider. As with locally loaded solutions for sales tax calculations, hosted solutions require setting a company’s nexus, product taxability, and customer or usebased exemptions within the system, and ensuring that they

TAX CORNER are properly connected to the business’s accounting software at the appropriate points. When done properly, the client receives effortless consistency and accuracy with every sales tax calculation.

5: COMMUNICATION AND INFORMATION ARE KEY Open communication and information are vital and affect all parties involved in any sales tax relationship. CPAs and their staffs should be aware of sales and use tax collection obligations, but in some cases, there may never have been a conversation on that

topic between the advisor and the client. Why? In general, many CPAs are not focused on sales tax because they might think their clients are handling sales tax reporting and compliance on their own. Conversely, from a client’s perspective, there may be a presumption that because their CPA is a tax professional, reporting and compliance will be done as simply another component of a typical tax engagement. As a CPA who is educated in sales tax laws, compliance and reporting, you will be able to

transfer your knowledge to your clients. By establishing and maintaining an open dialogue with your clients, you help arm them with the ability to address compliance, reporting and technology issues that may arise — and keep them out of tax trouble. Ray Bigley is vice president of Business Development for Avalara. 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.

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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!

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MEMBER NOTES / FIRM NOTES

Member Notes

elected for another term as treasurer of the Jewish Museum of Maryland.

Faw Casson is excited to announce the promotion of four individuals to the position of Partner. Please join us in extending congratulations to James E. Arthur, CPA, Lauren Harper, CPA, CFE, Brian J. Stetina, CPA, and Chad T. Vent, CPA. The firm looks forward to their continued professional growth at Faw Casson and development as industry and community leaders.

Steven J. Kurinsky, an MACPA CPA Candidate Member and a staff accountant and Certified QuickBooks ProAdvisor for DeLeon & Stang, has obtained his QuickBooks 2012 certification.

Gross, Mendelsohn & Associates, P.A. is pleased to announce that Diana Boyd DeWitt, CPA, a manager in the audit and accounting department at the firm, has been appointed chairperson of MACPA’s Technology Committee. Scott N. Drake, CPA, Member of the Smith Elliott Kearns & Company, LLC, serves on the Steering Committee of the Financial Institutions Community of Practice. Communities of Practice (COPs) provide a platform for PFK NA members to come together with others of similar interests to share vital niche-related information and resources. Gross, Mendelsohn & Associates, P.A. is pleased to announce that Chaim A. Fine, CPA, a senior tax accountant in the firm’s tax department, earned the Certified Financial Planner (CFP) designation. The designation, issued by the Certified Financial Planner Board of Standards, Inc., is earned by individuals who meet education, examination, experience and ethics requirements to be financial planners. Gross, Mendelsohn & Associates, P.A. is pleased to announce that Andrea Grissinger, CPA, a supervisor in the firm’s audit department, has earned the CPA designation. Gross, Mendelsohn & Associates, P.A. is pleased to announce that Barry G. Isaac, CPA, a principal in the firm, received the President’s Award from The Edward A. Myerberg Senior Center on October 25, 2011 in recognition of his valuable contributions to the organization. Isaac has served as Myerberg Senior Center’s past president, treasurer, vice president, and chairman and as a member of various committees. Barry G. Isaac, CPA, was also just

Steven Manekin, CPA, Director in the Audit, Accounting, and Consulting Department at Ellin & Tucker, Chartered, Alan Brickel, CPA, and Kim Fusco, CPA, both Managers in the firm’s Audit, Accounting, and Consulting Department, and Susan Keller, CPA, a Principal in Ellin & Tucker’s Tax Department, were recently featured speakers at the D.C. Bar Association’s Business Law Training Series held at the offices of Arnold & Porter in Washington, D.C. Their program entitled “Not-for-Profit Accounting: The Form 990, the Audit Process, and Internal Controls” was presented to approximately 35 business executives involved in the not-for-profit arena. BlueRidge Bank, a commercial bank headquartered in Frederick, announced the appointment of Leonard J. Miller, CPA, president and founder of Leonard J. Miller & Associates, to the Bank’s Board of Directors. Scot E. Orndorff, CPA, Member of Smith Elliott Kearns & Company, LLC, was appointed to the Accounting & Auditing Committee. He specializes in providing services to local governmental entities, and nonprofit organizations, and also specializes in single audits and program audits of federal and state grant recipients. Ernest Paszkiewicz, CPA, a Partner at Gross Mendelsohn & Associates, presented “How to prevent and detect fraud in your organization” in May at Gross Mendelsohn’s Baltimore office. Paszkiewicz offered attendees ideas for simple internal controls every organization should have in place to prevent fraud, as well as how to spot red flags before fraud is committed. Reznick Group announced that Ivan Silverman, CPA, co-founding principal of the firm, has been awarded the 2012 Hymen Goldman Humanitarian Award by the Hebrew Home of Greater Washington. STATEMENT

Silverman received this prominent award during the organization’s annual meeting held at the Wasserman residence. Michael R. Smith, CPA, has been appointed Chief Financial Officer and Vice President Finance for Europe, Middle East and Africa (EMEA) of McCormick and Company, Inc. Smith will serve as a member of the Board of Directors and will have responsibility for all financial activities for EMEA. Richard J. Taylor, CPA, CFE, has joined the USAID OIG as Deputy Assistant Inspector General for the Millennium Challenge Corporation.

FIRM NOTES Edwin R. Brake, Managing Director of Ellin & Tucker, Chartered, a leading regional certified public accounting and business consulting firm headquartered in Baltimore, is pleased to announce the firm has recently received its 10th unqualified Peer Review Report which verifies the quality standards maintained by Ellin & Tucker are the same as those maintained by the largest national and international accounting firms. The firm is a member of the American Institute of Certified Public Accountants’ Center for Audit Quality and has sustained this high level of standards for a period of 30 years. Gross, Mendelsohn & Associates, a CPA and consulting firm in Baltimore, has been recognized by Accounting Today as one of the leading accounting firms in the capital region, encompassing Delaware, Maryland, Virginia, Washington, DC, and West Virginia. One of only three Baltimore-based CPA firms to make this list, Gross Mendelsohn was recognized for its growth by Accounting Today, one of the accounting profession’s leading publishers of business news. Haines & Lagerquist, CPAs, LLC has been selected for the 2011 Best of Bowie Award in the Accounting Services category by the U.S. Commerce Association (USCA). Each year, the USCA “Best of Local Business” Award Program recognizes outstanding local businesses throughout the country.

Reznick Group’s 6th Annual Community Outreach Day. Held on May 11, 2012, participants were involved in seven different volunteer events around the greater Baltimore area. Employees assisted those less fortunate, participated in cleanup activities, and helped care for animals, among other philanthropic activities. Smith Elliott Kearns & Company, LLC is pleased to announce it will be represented in 2012 on PKF North America (PKF NA) national committees. PKF NA is a membership association comprised of 99 independent accounting and consulting firms in North America who share resources such as education, client service, best practices, marketing and various ranges of expertise. Smith Elliott Kearns & Company, LLC was recently notified by the Peer Review Committee of the American Institute of Certified Public Accountants (AICPA) that it has successfully completed an independent peer review of its accounting and auditing practice. Peer reviews are required for membership in the AICPA and by the state of Maryland Board of Public Accountancy and are conducted every three years. They are especially relevant with the ongoing scrutiny of the quality of audit work conducted by the accounting profession Partners, CPAs, Accountants, and Administrative staff from Weyrich, Cronin & Sorra spent some time during tax season tapping into their creative side and relieving stress by painting murals that are being donated to local hospitals. Both the Lutherville and Bel Air offices are participating in this “art therapy” tax season event that involves working with a team to paint child friendly pictures on large canvas boards.

IN MEMORIAM Edward C. Linz, Jr., CPA, passed away on February 3, 2012 at age 66. He was a founder and president of Linz and Wright, P.A.

Thomas W. Matthews, III, CPA, died on April 23, 2012 at age 56. He was a partner at Grandizio, Wilkins, Little & Matthew, LLP and was on the Board of Directors of Chesapeake Bank of Maryland.

Reznick Group, a top 20 national CPA firm, announced that more than 150 employees from the Baltimore office volunteered their time during JULY 2012

MEMBER SERVICES WELCOME, NEW & REINSTATED MACPA MEMBERS! Anne Arundel County

David Huppert, CPA

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Donna J. Miranda, CPA, MBA Michael Rossbach, CPA Lisa M. Shaw, CPA Joan B. Stefun, CPA Sheri Turk, CPA Thad C. Ulrich, CPA MBA, CRC Sandra A. Valenti, CPA Xu Rong Wang, CPA David J. Wilson, CPA Fei Ye, CPA Michael P. Zink II, CPA Capital Area Chapter Aderonke O. Adewuyi, CPA

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Christina Schmiedel, CPA Brian T. Simpson, CPA Lori A. Smith, CPA Joseph E. Spinella Jr, CPA Carroll D. Stanley, CPA

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John C. Etoh, CPA

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Macon M. Ware III, CPA Mark G. Way, CPA Mark White, CPA Sally X. Zheng, CPA Central Maryland Chapter Lee A. Ahern, CPA Gregory P. Anselmi, CPA

Derek Hardesty, CPA Robert K. Hollasch, CPA Kenneth F. Huber, CPA Timothy J. Hurley, CPA Thomas C. Hurst, CPA Brian K. Israel, CPA, MBA Hazel L. Johnson, CPA James E. Kemmerer, CPA Patricia L. King, CPA Brandon G. Lancer, CPA William L. Lang, CPA

Lanette D. McClurkin, CPA

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Mark F. Dâ&#x20AC;&#x2122;Addato, CPA

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Kenneth W. Morris, CPA Bradley L. Muser, CPA Howard L. Nilson III, CPA Moshe I. Pelberg, CPA Michelle T. Pencek, CPA Ray J. Plummer, CPA

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Maryland

Zachary C. Reichenbach, CPA David Rice, CPA Kristen E. Ricktor, CPA Aviva Rosenberg, CPA Tiffany Schoonyoung, CPA Patrick A. Seitz, CPA Ryan J. Sheckler, CPA Maryna M. Simpson, CPA Erica Skrabacz, CPA Luke Smith, CPA Elizabeth C. Sparr, CPA Matthew Stangroom, CPA Alexander B. Strate, CPA Jonathan D. Strauss, CPA

Patricia A. Supik, CPA

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Cynthia W. Taylor, CPA Todd C. Taylor, CPA Alison M. Teuber, CPA

Victor J. Williams, CPA Jenelle P. Wilson, CPA Michael R. Woizesko II, CPA Lisa Wright, CPA Scott J. Wuenschell, CPA Stacey Zerner, CPA Matthew Zinner, CPA eastern shore Holly L. Bryan, CPA Elizabeth A. Campbell, CPA

western Jamie M. Echefu, CPA Out of state Riddhini K. Alexander, CPA Steven D. Beaulieu, CPA Shaun Bladow, CPA John T. Caldwell, CPA Carmon K. Choice, CPA Edward J. Gilhooly, CPA Ann R. Keel, CPA Anthony C. Latino, CPA Nadine A. Massih, CPA

Ginger A. Heatwole, CPA

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Kris Nammalwar

Tenilla Jones

Alina Y. Kasprik

Nicholas Grueninger

Eastern Shore

Out-of-State

Edward S. Keough

Michael T. Lacey

Brian P. Hellman

Joshua R. Hignutt

John P. Baker

Christopher M. Kupstas

Jordan L. McCarthy

Taperia S. Jackson

Mid-Maryland Chapter

Karman Chan

B. Summer Raza

Solomon H. Metaferia

Marc Lewin

Lindsey Close

Lauri A. Funk

Capital Area Chapter

Jason W. Papanikolas

Rose Piedmont

Kristina M. Dahabura

Colette M. Kolanko CFP

Farmehr Assadi

Peter D. Torrieri

Alissa E. Raney

Southern Maryland

Tsehay Michael

Maxine L. Burris

John P. Treanor

Suganthy Siva

Tracey G. Cole

William J. Del Pino

Central

Melissa A. Tarkett

Toni A. Lovings

STATEMENT

CLASSIFIEDS mergers & acquisitions

employment

SALISBURY, MD ACCOUNTING PRACTICE FOR SALE

Hunt Valley CPA firm with national reputation as Dental CPAs, seeks client services consultant, who will work substantially with dental clients. Five or more years’ experience with small business/ professional clients, prior dental/healthcare client experience a plus, hands on management of client services, accounting, tax & planning, income projections, client meetings & consulting. Email resume, with cover letter to dbodnar@nlgroup.com.

THINKING OF SELLING YOUR PRACTICE?

Experienced CPA with diversified tax and accounting experience wishing to relocate to Metro Baltimore seeks Tax Manager/Senior Tax Manager position in a quality CPA practice or in private industry in Downtown Baltimore, Pikesville, Towson, Timonium, Owings Mills, Reisterstown or Cockeysville. Please reply to questionmark27@verizon.net.

Well-established, quality practice with gross revenues of $420K. The client base is composed of 1,000 individual returns and 125 businesses, including tax, bookkeeping and some payroll. The revenues yield year round income and good cash flow to owner. 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. 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. Relocating CPA with strong tax background seeks to purchase a well established, quality, transferable tax/ accounting practice grossing $250k – 325k in Pikesville, Owings Mills, Towson, Timonium, Reisterstown. Would also consider short association leading to partnership in a quality $350k and up practice. Reply to schwartzLFS@gmx.com.

TIME TO EXPAND?

Acquire these clients who include a combination of small businesses using QB and 1040 clients. Approx. 1,200 billable hours including Tax, accounting, Compilation, Review, management consulting. Must be prepared to provide a high level of personalized service, and handle all tax requirements: 1120, 1065, 1040, 941, W2, 1099, Sales tax, etc. (Montgomery and Howard County). Reply to: contactcpahere12@gmail.com or File no: 07-01 (see directions below on how to reply to a File No.).

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.

office space OFFICE SHARING AND MORE

I have excess office space with parking. Would like a practitioner(s) that is interested in using the space. My office also has meeting rooms, computers, accounting software (CSA), copiers, etc. that makes this a turnkey operation. There are many other benefits available for a qualified accountant including succession planning. Not interested in large firm take over and this is not an offer to sell my practice. Reply your interest to cpafirm@msn.com. Location zip is 21221.

TOWSON OFFICE SPACE

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.

SAVE

THE

For 2012

DATE Fall Programs

GOVERNMENT CONTRACTORS’ CONFERENCE 9.7 // Gaithersburg Hilton, Gaithersburg // Event ID: 121008

43RD ANNUAL CHESAPEAKE TAX CONFERENCE 9.20 - 9.21 // Martin’s West, Baltimore // Event ID: 221000

2012 TECHNOLOGY CONFERENCE

10.4 // Hilton Baltimore BWI Airport, Linthicum // Event ID: 121009

2012 PRACTITIONERS’ CONFERENCE

10.23 // Martin’s West, Baltimore // Event ID: 121010

27TH ANNUAL ADVANCED PERSONAL FINANCIAL PLANNING CONFERENCE 10.26 // Martin’s West, Baltimore // Event ID: 121007

CELEBRATE THE PROFESSION - NEW CPA SWEARING IN CEREMONY 11.1 // Hilton Baltimore BWI Airport, Linthicum

DON FARMER’S 2012 CORPORATE/BUSINESS INCOME TAX WORKSHOP 11.2 // Martin’s West, Baltimore // Event ID: 111000

2012 ADVANCED TAX INSTITUTE 11.5 - 11.9 (Day 1 & Day 2 have been combined for 2012) // Martin’s West, Baltimore

DON FARMER’S 2012 INDIVIDUAL INCOME TAX WORKSHOP 11.15 - 11.16 // Martin’s West, Baltimore // Event ID: 211000

4 FOR FALL

11.27 - 11.28 // Doubletree Hotel, Columbia

MACPA’S 1040 FAST TRACK - A COMPREHENSIVE INDIVIDUAL TAX SEMINAR 12.5 - 12.6 // Turf Valley Country Club, Ellicott City // Event ID: 211001

DON FARMER’S 2012 TAX UPDATE

12.7 // Martin’s West, Baltimore // Event ID: 111001

MACPA’S 1040 FAST TRACK - A COMPREHENSIVE INDIVIDUAL TAX SEMINAR 1.8 - 1.9.2013 // Marriott Hunt Valley Inn, Hunt Valley // Event ID: 211003

CPA DAY

1.16.2013 // Governor Calvert House, Annapolis // Event ID: 181000

nypn news // The MACPA’s New / Young Professionals Network had a busy month filled with exciting events. On May 1, we held our first NYPN Town Hall Meeting at Turf Valley. Tom Hood led a panel discussion on the issues and opportunities facing young CPAs. We’d like to thank the panel, which included Brandon Gretz, Diana Scatliffe, Brenda Little, and Barrett Young. Photos of the event have been placed on the NYPN Facebook page --Facebook.com/macpaNYPN. In early May, a group of young CPAs attended the MACPA’s Leadership Academy. Over the course of two and a half days, attendees learned about their unique leadership strengths and how to apply these to their careers and lives. An announcement will be made when a date is set for the fall Leadership Academy. Check out the CPA Success blog, www. cpasuccess.com, for blog posts detailing more about this innovative experience. On May 15, MACPA NYPNs partnered with Junior

you’re invited // UPCOMING EVENTS

NYPN SUMMER HAPPY HOUR

When: Thursday, July 19 Where: Nick’s Fish House 2600 Insulator Drive, Baltimore NYPN SUMMER HAPPY HOUR –BETHESDA When: Thursday, August 2 Where: 4901 Fairmont Ave, Bethesda We are in the process of scheduling future events. Stay tuned for updates on future events and opportunities by joining the NYPN Committee and going to MACPA’s NYPN page at www.macpa.org/NYPN. You may also contact nypn@macpa.org with questions or suggestions for events. Please: No recruiting at NYPN events.

Achievement of Central Maryland at BizTown. Ten NYPN volunteers were on hand to help assist fifth- and sixth-grade students through various activities to learn about navigating the demands of a career and personal finances. The program’s goal is to further the financial literacy of our local youth in an entertaining and exciting way. Thank you to our volunteers: Sara Baumer, Liz Converse, Cara Farrell, Warren Gofstein, Jeff Klima, Ben Leatherman, Diana Scatliffe, Tara Stradling, Amanda Terzigni, and Tim Walter. We’d also like to thank the AICPA for supplying gift bags for the students to take home. Photos of the day can be found on NYPN’S Facebook page, Facebook.com/macpaNYPN. For more information on JA BizTown, please see JA’s website, www.jamaryland.org. NYPN is on Facebook, Twitter, and Linkedin. Check us out today!

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 150hour 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 we’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@reznickgroup.com NYPN LEADERSHIP BOARD Activities // Professional development chair: Stephen Hohne, Hertzbach & Company: Stephen.Hohne@gmail.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

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