January/February 2017

J A N U A R Y/ F E B R U A R Y 2 0 1 7

THE CHANGING PROFESSION: HOW TO ADAPT AND PROSPER Page 2 THE CPA EXAM IS CHANGING Page 4 THE CHANGING CPE LANDSCAPE

Page 6 FIVE STEPS TO EMBRACE AND LEVERAGE TECHNOLOGY Page 8 HOW CPAs CAN CAPITALIZE ON CHANGE

FULL PAGE AD BLEED

contents J A N U A R Y/ F E B R U A R Y 2 0 1 7

THE MAGAZINE OF THE NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS

RALPH ALBERT THOMAS, CGMA Chief Executive Officer & Executive Director rthomas@njcpa.org

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ELLEN C. McSHERRY, CGMA Chief Operating Officer emcsherry@njcpa.org DON MEYER Chief Marketing Officer dmeyer@njcpa.org RACHAEL BELL Managing Editor rbell@njcpa.org

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The CPA Exam Is Changing

With an emerging generation entering the changing world of accounting, the new CPA exam is designed to help them land on their feet and excel in the accounting profession.

The Changing CPE Landscape New models of education are changing the way in which we learn and consume CPE. Here’s how the AICPA and NASBA are approaching these changes.

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Five Steps to Embrace

and Leverage Technology

Until we stop seeing technology as an unnecessary disrupter of traditional processes, we won’t be able to fully leverage its potential. See how embracing technology can elevate your business.

How CPAs Can Capitalize on Change

ELIZABETH QUIÑONES Content Specialist equinones@njcpa.org MARC L. REIN Multimedia Specialist mrein@njcpa.org

THE NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS 425 EAGLE ROCK AVENUE SUITE 100, ROSELAND NJ 07068 973-226-4494 | NJCPA.ORG #NJCPAMAG READ NEW JERSEY CPA DIGITAL AT NJCPA.ORG/ NEWJERSEYCPA.

10 ACCOUNTING, AUDITING & ATTEST

15 FINANCIAL PLANNING SERVICES

19 PROFESSIONAL DEVELOPMENT

Nine Strategies to Increase Audit Quality

Non-GAAP Measures in Financial Planning

Six Steps to Sales Success

11 ADVOCACY & LEGISLATIVE ISSUES

16 FIRM & PRACTICE MANAGEMENT

Governor and Legislature Agree to TTF Funding and Tax Reform Compromise 12 BUSINESS ADVISORY SERVICES

Succession Planning for Business Clients 13 CORPORATE ACCOUNTING

Accounting for the Provisions of the ACA DESIGN/ P RODUC T I ON / A DVERTISING THE YGS GROUP 3650 WEST MARKET STREET YORK, PA 17404 Advertising Contact: JASON VRANICH, ACCOUNT EXECUTIVE 717-505-2357 jason.vranich@theygsgroup.com

Think beyond the typical functions of an accountant: See yourself as a trusted advisor. Add longevity to your career, and keep your firm thriving into the future.

20 TAX

Tax Return Due Date Changes Now in Effect

Aiming at Your Target Market

21 NJCPA NEWS

17 GOVERNMENTAL & NONPROFIT

23 CLASSIFIEDS

How to Better Communicate Not-for-Profit Financial Performance to Stakeholders

24 MEMBER STORY

P. Jeffrey Christakos, CPA

18 LAW & ETHICS

Codes of Conduct: More Than Just Rules

New Jersey CPA (ISSN 1534-6692) is published six times per year by the New Jersey Society of Certified Public Accountants, 425 Eagle Rock Avenue, Suite 100, Roseland, NJ 07068. Issue No. 61 Copyright © 2017 New Jersey Society of Certified Public Accountants.

Annual membership dues include $9 for a one-year subscription to New Jersey CPA magazine. Members may not deduct subscription price from dues.

Periodicals postage paid at Roseland, NJ, and at additional mailing office. POSTMASTER: Send address changes to New Jersey CPA, 425 Eagle Rock Avenue, Suite 100, Roseland, NJ 07068-1723.

The materials and information contained within New Jersey CPA are offered as information only and not as practice, financial, accounting, legal or other professional advice. The opinions expressed herein are those of the authors and not necessarily those of the New Jersey Society of CPAs. Publication of an advertisement in New Jersey CPA does not constitute an endorsement of the product or service by the New Jersey Society of CPAs.

THE CPA EXAM IS CHANGING

By STEPHEN F. McCARTHY, CPA

THE PRESIDENTS FORUM

The title of the 1964 Bob Dylan song “The Times They Are A-Changing” has never been more true than in today’s business world.

Advancing technology, changing business practices and mounting government regulations are rapidly reshaping the business environment. The accounting profession must change with the times.

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There is much talk among accountants about the difficulty of the CPA exam and the dichotomy that exists: How can the profession maintain high standards in a complex world but still get the desired number of quality accountants?

To adapt the CPA exam to today’s changing environment, the AICPA gathered input from a wide range of stakeholders who share an interest in preserving the strength and mission of the profession.

Their analysis showed that higher-order skills (such as critical thinking, problem solving, analysis, communication and professional skepticism) are increasingly essential to succeed in the CPA profession.

Thus, the AICPA has updated the CPA exam to place a greater emphasis on these skills. Beginning April 1, 2017, the test will include more real-world, task-based questions requiring practical knowledge.

Undoubtedly, the new exam will be even more complex to reflect the changing business environment.

The AICPA employed a comprehensive process to design a Uniform CPA Examination Blueprint. In the process, the AICPA identified approximately 600 specific tasks newly licensed CPAs are required to complete. These tasks were then mapped to the specific skills and knowledge required to successfully complete them.

The blueprint is intended to: yy Document the minimum level of knowledge and skills necessary for initial licensure. yy Assist candidates in preparing for the Exam. yy Apprise educators of the knowledge

JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

and skills needed to function as a newly licensed CPA. yy Guide the development of Exam questions.

It is significant that the skills were mapped to specific tasks and then organized in a methodical way, from lower-level basic skills to higher-order complex skills.

These skills, from lower to higher level, are: remembering and understanding, application, analysis, and evaluation. This thoughtful organization of the blueprint facilitates the development of effective tools for accounting graduates.

The AICPA has also created resources for candidates preparing for the exam. At aicpa.org/nextcpaexam, there are sample tests including the new Document Review Simulation (DRS) questions introduced on the July 2016 exam. These new questions present scenarios that add authenticity and real world experience. The requirements for the exam and licensure process are explained at ThisWayToCPA.com/examinfo.

The link also provides tools, study schedules and advice from CPAs who successfully passed the exam.

To foster success, the AICPA identified critical success factors to guide educators, employers and accounting graduates: EDUCATORS There are two roles educators must play in preparing students for the CPA exam: yy Educators should be supportive of the profession, discuss industry opportunities and provide relevant guest speakers to students. yy Accounting curricula should be en-

hanced by incorporating the higher-order skills noted above. Group projects, simulations, controls assessment and formal presentation of findings are techniques that faculty can use to emphasize the application of classroom learning to the real world.

EMPLOYERS Employers need to provide support and resources to candidates taking the exam.

New Jersey accounting firm Wilkin & Guttenplan provides a successful model for managing new accountants. Managing Shareholder Edward I. Guttenplan, CPA, explains that each new hire is assigned a performance coach who works with the new employee to identify goals, desired outcomes and the process to achieve them.

The coach also provides specific tools.

Guttenplan explains that expectations must be established in collaboration with each employee. Factors like commitment, ownership, career direction and focus, and a positive attitude are stressed for professional achievement. The coach helps make the connection between effort and success. The firm also has a supervisor who serves as a CPA exam coach for those who are CPA candidates. The CPA exam coach provides useful tips, monitors and encourages progress, facilitates study sessions, and reinforces the importance of passing the CPA exam. This culture has resulted in higher levels of performance for both the firm and employees and presents an effective model for assisting new hires in exam preparation.

ACCOUNTING GRADUATES Of course, much of the responsibility for passing the exam rests on the candidates.

The exam is rigorous and comprehensive and requires hundreds of hours of studying.

There are no shortcuts. The AICPA, colleges and employers all have important roles to play. But it is up to the candidates to take ownership. This ownership may include taking a CPA exam review course.

Roger Philipp, CPA, CGMA, CEO of Roger CPA Review, says that he and his team designed the review course with the same goal as the AICPA Exposure Draft.

He explains that the emphasis of the

updated course is to help students understand concepts and material, not merely memorize facts. Being “book smart” isn’t enough. In the exam, candidates must be prepared to apply the same knowledge they will eventually use as a newly licensed CPA. Philipp astutely points out that the new exam, while still highly academic in nature, will benefit those with practical experience. Under the old exams, candidates could memorize entire sections and do well on the exam yet have poor performance on the job. Clearly, the resources needed to pass the exam are available. It’s up to the candidates to take advantage of them.

Bob Dylan has even more wisdom for us. Later in “The Times They Are A-Changing,” he wrote, “You better start swimming or you’ll sink like a stone.” This bit of advice may be especially true for accountants in today’s changing environment. The profession now requires

accountants with enhanced skills to meet the demands of these changing times.

Sink or swim.

Stephen F. McCarthy, CPA, CGMA, M.B.A. is the owner of The Presidents Forum. He is a member of the New Jersey Society of CPAs. Contact him at stevemccarthy@thepresidentsforum.com

WATCH MORE CHANGES TO THE 2017 CPA EXAM

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NEW JERSEY CPA | JANUARY/FEBRUARY 2017

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THE CHANGING CPE LANDSCAPE

By KENNETH A. HEASLIP, CPA

LOSCALZO ASSOCIATES, LTD.

In August 2016, the American Institute of CPAs (AICPA) and National Association of State Boards of Accountancy (NASBA) jointly revised and issued the Statement on Standards for Continuing Professional Education Programs. The most significant changes to the standards pertain to blended learning and nano courses.

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The standards provide a framework for the development, presentation, measurement and reporting of CPE programs, and they apply to all AICPA members. It is important to note that while the New Jersey State Board of Accountancy (NJBOA) recognizes the AICPA standards, some New Jersey regulations differ from the AICPA standards.

New Jersey licensees are required to follow New Jersey’s rules.

HIGHLIGHTS OF THE NEW STANDARDS The new standards incorporate many new learning methods and focus on learning outcomes. For example, it is now required that programs have at least one element of engagement for each credit of CPE. This requirement can be met by a group discussion, polling question, instructor-posed questions with time for participant reflection, or a case study. Different elements should be used throughout the course.

One of the more controversial aspects of the standards is the inclusion of nano courses. A nano course is defined as “a tutorial program designed to permit a participant to learn a given subject in a

JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

10-minute timeframe through the use of electronic media.” Nano courses grant 0.2 CPE credits and require the CPA to watch a 10-minute video tutorial and correctly answer two questions on the course content. Currently, New Jersey does not allow nano courses.

A REVIEW OF THE CURRENT NEW JERSEY REQUIREMENTS The current New Jersey triennial period is January 1, 2015, through December 31, 2017. Licensees must earn a total of 120 CPE credits with a minimum of 20 credits each calendar year. Here’s a refresher on New Jersey’s requirements: yy CPE program developers must be registered with NASBA or the NJBOA. Accredited universities and colleges, national and state professional organizations, and state government agencies do not need to be registered. yy There is no limitation on self-study programs. The only course that must be taken live is New Jersey Law and Ethics, which must be presented by a developer approved to present the course. yy Anyone who takes courses at accredited colleges or universities, either through

live classes or online for credit, will receive 15 CPE credits for each semester hour. Proof of satisfactory completion is necessary by providing a certified transcript. For courses not offering credits, you can earn one CPE credit for each 50 minutes of class time. In those cases, obtain a signed statement from the instructor specifying how many hours of class you attended. yy Licensees who wish to get credits for hours of instruction, instructional prep time or publications can request them by completing a form that is available on the NJBOA website (njconsumeraffairs.gov/acc). Similarly, you can request credits for courses that are offered by developers that are not registered with NASBA or the NJBOA by completing a form. yy The 120 credits of CPE must include at least 72 credits in technical subjects.

Technical subjects include accounting, auditing, SSARS, business law, computer science, economics, finance, management advisory services, mathematics or statistics, SEC practice, taxation, and professional ethics. In order to address the needs of CPAs in industry, they also include industry-related subjects.

Courses are acceptable as long as the licensee can demonstrate that the subject contributes to the maintenance of the licensee’s professional competence. yy Topics that are not technical, also known as soft topics, can fill the remaining CPE requirement. Topics that

qualify include practice management, human resources, speaking, leadership and management. However, courses that relate to practice development or marketing will not qualify.

There are a couple of commonly-asked questions regarding New Jersey’s 20-credit annual minimum: yy If a licensee has more than 100 credits after the second year and therefore requires less than 20 credits in the final year, does the annual minimum rule apply? The answer is yes. You must earn 20 credits in the third year even if this would mean total credits will exceed 120. yy If a licensee is planning on putting his/ her license in inactive status at the end of the triennial period, do they still have to earn 20 credits per year? The answer is yes. The requirement applies to all licensees who have a currently active license.

WILL NEW JERSEY’S REQUIREMENTS CHANGE? The NJBOA is currently reviewing all regulations under the state’s sunset provisions.

Those provisions require that the board reaffirm the need for the regulations. Historically, the board has used this opportunity to revise the regulations. The incorporation of the new standards is expected to be discussed as part of the review but the board has not yet commented on which, if any, of the standards will be ultimately adopted. Updates will be available at njcpa.org/ NJBOA.

HOW CAN THE NJCPA HELP? In order to address members’ needs, the NJCPA offers CPE in multiple formats and venues. They have expanded their offerings beyond the traditional live programs. Members can join interest groups such as federal taxation, state taxation, accounting and auditing, and nonprofit, and earn credits free of charge by attending and participating in meetings (njcpa. org/groups). In addition, the NJCPA has partnered with several developers that offer self-study (njcpa.org/self-study) and web-based programs (njcpa.org/webinars).

And the NJCPA’s CPE Tracker (njcpa.org/ cpetracker) helps members manage all of their CPE credits, including those earned by other providers, in one place.

Kenneth A. Heaslip, CPA, CGMA, is director of operations for Loscalzo Associates, Ltd. He is a member of the NJCPA State Taxation, Federal Taxation, Nonprofit, Governmental Accounting & Auditing, and Accounting & Auditing Standards interest groups as well as the Student Programs & Scholarships and Professional Conduct committees.

He can be reached at kennh@njcpafirm.com.

READ MORE CPE REQUIREMENTS

njcpa.org/cpe/about NEW JERSEY STATE BOARD OF ACCOUNTANCY UPDATES

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NEW JERSEY CPA | JANUARY/FEBRUARY 2017

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FIVE STEPS TO EMBRACE AND LEVERAGE TECHNOLOGY

By MICHAEL L. ZOLA, CPA

ZOLA GRACE, CPAs, LLC

Over the past 35 years, I’ve had a front-row seat to the most remarkable advances in business technology.

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I started my career in a small regional CPA firm in the early 1980s. It was just around the time ADP started offering automated payroll services. In the early 1990s, as controller for a multi-national public relations agency, my department was the first to utilize personal computers, primarily to run Lotus 123 on a DOS operating system. The computer revolution had begun, and it seemed like overnight every employee worked on a PC running Windows. Not long afterwards, I was responsible for implementing cutting-edge ERP software across the entire organization for that same company.

Along the way, whether working in a corporate environment or practicing public accounting, embracing new technology was key to the value proposition I offered employers and clients. I’m sure many of you feel the same. Adapting business processes to emerging technologies fueled the computer revolution. We marveled as technology took hold. We prided ourselves on being ahead of the curve, and companies counted on us to explain to others how it all worked and the benefits provided by adapting business processes.

It was easy for accountants to leverage technology and the applications that were designed to take advantage of it, and for good reason. Much of the technology was designed to aid us. Efficiencies in capturing business transactions, data storage and the ability to access and report on information

JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

helped us to be better at our jobs. It wasn’t difficult to embrace and leverage technology when it made us smarter, more efficient and valuable.

However, the focus of technology has shifted, and the pace of change has increased. Today, technology has become outward looking. The benefits of adapting are not always clear. For some, the learning curve has become more difficult as understanding how to leverage technology has gotten fuzzy.

New business applications often are less about improving work products like spreadsheets or tax returns and are more about mobility, practice management and interaction with clients and employees.

These newer applications now focus on internal business processes and the way our firms are managed. The speed of change has accelerated, leaving many of us feeling hopelessly behind.

How do we keep pace? The following five suggestions are based on my experience adapting a small CPA tax practice to new technologies that have helped us stay competitive now and will give us every opportunity to stay competitive into the future.

1. START FROM THE INSIDE OUT Implement applications designed to help you organize your processes and work product. A practice management solution is a good place to start. There are applications that integrate customer relationship

management (CRM), project management, document management, time and billing, client portals, and more. Embracing these applications and the digital storage capabilities they offer enables us to do more with fewer mistakes.

2. FIND A GOOD IT RESOURCE It is important to have an IT consultant on your team who can help with the transition and take ownership of the technology infrastructure. Your focus should be on learning how to use and leverage the applications you deploy. Seek out an IT firm that has experience working with accounting firms, understands workflow and processes, and can deliver a computing environment utilizing new technologies in a secure environment.

3. SET YOUR SIGHTS OUTWARD A good practice management platform is the foundation that allows a practitioner to move from paper to digital storage of client information and documents. This transformation can be leveraged to take advantage of today’s outward looking technologies. Clients want to interact online and receive financial documents electronically in a secure environment via email and the internet.

A cloud-based practice management tool will allow you to deliver resources to employees regardless of where they want or are able to work. The platform

should enable you to provide a seamless mobile work environment with all of the tools and documents employees need.

Today’s best and brightest accountants are looking for a sophisticated mobile work environment that provides access to new technologies and work flexibility. Having this technology will allow you to attract and retain employees.

4. STEP UP YOUR CLIENT COMMUNICATIONS Businesses of all types are carving out a presence on social media, so be sure to have a presence on at least one social site.

Use your practice management software to harvest email addresses for newsletters.

Provide targeted information to existing clients from attributes stored in your CRM. Drive clients and prospects to your website, LinkedIn page, Twitter feed and Facebook page.

5. TAKE THE PLUNGE CPAs are trained to be detailed oriented.

Our profession demands that we have a complete understanding of all the facts.

However, this approach doesn’t always work when considering new technologies. Sometimes you need to embrace a “launch and learn” mindset to become more efficient and attractive to clients and employees.

Our survival depends on embracing the direction technology is heading. Today’s technology is no longer just about im-

proving the work product. It’s also about our clients and employees. The ways we sell our services, communicate our expertise, share documents and resources, and allow access to work products has changed. Technology that allows us to create an interactive experience between our clients and employees has replaced the focus on technology improving how we prepare tax returns, spreadsheets and work papers. We must embrace new technology and learn how to leverage it.

If we do not, we will have a hard time demonstrating our value in comparison to others who have adapted. Eventually firms that do not adapt will be less desirable to clients and employees.

Michael L. Zola, CPA, is the managing partner of Zola Grace, CPAs, LLC. He is a member of the NJCPA State Taxation and Nonprofit interest groups. Michael can be reached at MZola@ ZolaGraceCPA.com.

READ MORE

TECHNOLOGY ARTICLES AND RESOURCES

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LEARN MORE Apr. 20, 2017, Webcast TECHNOLOGY TOOLS FOR TODAY’S CPA

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NEW JERSEY CPA | JANUARY/FEBRUARY 2017

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HOW CPAs CAN CAPITALIZE ON CHANGE

By JOSEPH PASQUINO, CPA

SMOLIN LUPIN & CO., P.A.

The article might be better titled “Looking Beyond Tax and Audit.” In essence, this is what CPAs must do in order to adapt in today’s accounting profession.

Relying solely on traditional core services may not provide the monetary security or the competitive advantage it once did. So where might the profession go? Can we really overcome all the challenges of tomorrow? Fortunately, we are in a position to win.

When discussing the many changes occurring within the profession, there tends to be plenty of noise, and we see some foggy weather ahead. However, it is time for us to be optimistic and shore up our footing. CPAs need to strive to become the most trusted advisor, a task that is both difficult and rewarding. How each firm or CPA chooses to achieve this status will be a testament to their own creativity and determination. To become the most trusted advisor, firms and individuals will need to build skills and knowledge outside of the profession’s traditional services.

THE CHALLENGES

Professional Hurdles

The most seasoned and experienced members of the accounting profession are set to retire in the coming years, maybe taking their knowledge with them.

Mounting fee pressure, compression of deadlines and difficulties in cultivating future leaders all present unique obstacles for us to better serve our clients. As CPAs, we need to find creative solutions to overcome these issues while managing the usual changes to the tax code and accounting standards.

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JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

Technological Threats

What will CPAs need to do if the traditional tax, accounting and assurance services are not enough? Contemplate a world where advanced technology, such as a super computer or a robot, is able to perform most of the profession’s traditional work.

This world is not so far-fetched anymore.

Firms and CPAs ought to be discussing the threat of external technological advances to their practices. Just look at how traditional yellow cabs have been impacted by Uber. Fortunately, there probably is still some time before computers truly master the tax code and GAAP. Nevertheless, the possibility increases each year.

THE OPPORTUNITIES

Value-Added Services

Computers will most likely not come equipped with empathy any time soon.

Focusing on building a strong relationship and accomplishing our clients’ goals will remain a key differentiator. Providing timely feedback and advocating for our clients can further assist with our positioning.

Clients already entrust us with some of their most sensitive and valuable information. Firms and CPAs can use this information and insight to provide value-added services such as asset protection, disaster planning, data security and wealth advisory. For example, while preparing the tax return, you may need to analyze the activity of the client’s brokerage account and report it correctly. Why not take advantage of

this opportunity to assess the client’s asset allocation? This conversation could spill over into other areas such as life insurance and wills.

While performing the many tasks required for our clients to comply with the IRS or GAAP, think about how else the information we have at our fingertips effects our clients’ businesses and overall wealth pictures. If the audit team needs to review the company’s insurance contracts, instructing the team to bring these contracts to individuals with the ability and experience to evaluate them could prove to be very beneficial. For example, we can add value by determining if the company’s inventory insurance policy is up to date and has enough coverage for the current levels. Going the extra mile for our clients, when applicable, could limit fee disputes and create customer loyalty.

Improved Communication

A common theme we all hear is accountants are good with numbers. Imagine a

day when people say that accountants are good at communicating! Newer forms of communication, including Facebook, text messaging, WhatsApp and LinkedIn, will need to be part of the future CPA’s communication arsenal. These forms of communication have the ability to assist us with learning and understanding our clients better, but the tricky part will be determining which methods to use with each client.

Regardless of method, communicating effectively and timely will be paramount.

Keep in mind that an old-fashioned phone call or face-to-face meeting may still be the most effective. Digital communication methods are missing the facial expressions and body language that could be crucial to fostering a strong relationship.

The opportunity to broaden our skill base is becoming more significant with each passing day. Using our core services as a springboard to provide valuable feedback, expand our services and advocate for our clients can assist CPAs and firms with adapting and thriving in this changing profession. Re-

gardless of technological advances and other changes to the profession, the struggle for the title of most trusted advisor will continue.

Joseph Pasquino, CPA, is a manager with Smolin Lupin. He is a member of the NJCPA and serves on the Essex Chapter board as a director. He can be reached at jpasquino@smolin.com.

READ MORE AN INTEGRATED APPROACH TO DECISION MAKING

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9

ACCOUNTING, AUDITING & ATTEST

Nine Strategies to Increase Audit Quality

BY SALVATORE A. COLLEMI, CPA, COLLEMI CONSULTING & ADVISORY SERVICES, LLC

In today’s challenging economic environment, external auditors — from sole proprietors to the largest international CPA firms — are under a microscope to ensure they are achieving high-quality auditing of financial reporting. CPA firms have recently been in the crossfire of negative results reported by standard setters and regulatory agencies. So how can you ensure your practice does not become the next statistic or, even worse, get sued by an audit client or face a regulatory enforcement action?

One way to steer your ship clear is to increase audit quality across your attest practice. When external auditors, regulators and investors refer to the term “audit quality,” most tend to focus on the credibility of the audited financial statements. In other words, did the auditor deliver an appropriate professional opinion that was supported by sufficient evidence and objective judgements? In order to answer that question, we must first identify the key ingredients that drive audit quality: yy Leadership and culture of a firm. yy The skills and personal traits of audit partners and professional staff. yy The effectiveness of a firm’s audit process, methodologies, policies and tools. yy The reliability and usefulness of audit reporting. yy The business and regulatory environment in which the CPA firm and their clients operate. yy Independence and ethics. yy Market placement and specialization. yy Engagement performance, professional skepticism and judgement. yy Quality control and consultation. yy The delivery of consistent results.

The following are nine recommendations for boosting the quality of your audit practice: 1. STRENGTHEN THE “TONE AT THE TOP” Firm leadership should: yy Ensure that all staff have sufficient time and resources to solve engagement issues.

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yy Demonstrate a track record of consistency on standards-based decisions. yy Establish and regularly communicate a formal code of conduct. yy Challenge unethical behavior and address instances of non-compliance with the firm’s code of conduct through swift disciplinary actions. yy Provide a copy of the firm’s quality control document to all professionals. yy Hire, compensate, promote and reward professionals who possess and exhibit high levels of integrity and demonstrate a commitment to quality.

2. ENHANCE YOUR CLIENT ACCEPTANCE AND CONTINUANCE PROCESS yy Perform sufficient client background checks. yy Only associate with highly ethical clients.

3. HIRE OR ALIGN WITH EXPERTS, SPECIALISTS AND CONSULTANTS Have sufficient technical personnel on hand at your firm or have access to external experts, specialists and consultants who can provide you with the appropriate advice when facing challenging issues.

4. OFFER QUALITY CONTINUING EDUCATION AND TRAINING Offer a blended training package to increase competency from a technical and soft-skills standpoint. Focus on topics such as: yy Independence and ethics. yy Applying professional judgment, skepticism and objectivity. yy Firm policies and procedures.

5. ESTABLISH A QUALITY CONTROL DEPARTMENT Consider investing in a quality control department that will: yy Develop accounting and auditing guidance as well as industry-specific guidance. yy Perform engagement quality control reviews of high-risk engagements.

JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

yy Monitor and evaluate the firm’s quality control policies and procedures. yy Provide technical consultation to personnel. yy Monitor the firm’s accounting and auditing training programs. yy Develop assurance policies and procedures. yy Participate in a dialogue with regulators and standard-setters when new accounting and auditing standards are being developed.

6. STREAMLINE YOUR AUDIT PROCESS Ensure all engagement teams consistently apply and streamline your audit approach so they can focus on areas of high risk and audit execution.

7. INCREASE SPECIALIZATION Consider specializing in a specific industry or niche so that you can focus your attention and build efficiencies to increase realization.

8. ROTATE KEY PROFESSIONALS ON ENGAGEMENTS Rotate partners, managers and engagement quality control reviewers on a periodic basis to add fresh and new perspectives to your high-risk engagements.

9. JOIN AN ACCOUNTING NETWORK OR ALLIANCE Consider joining a reputable accounting network or alliance program to collaborate and share with other CPA firms.

Salvatore A. Collemi, CPA, is the managing member of Collemi Consulting & Advisory Services, LLC. He is a member of the NJCPA Content Advisory Board and can be reached at salvatore@collemiconsulting. com or 732-972-1098.

READ MORE AUDITING NEWS AND ARTICLES

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ADVOCACY & LEGISLATIVE ISSUES

Governor and Legislature Agree to TTF Funding and Tax Reform Compromise

BY JEFFREY KASZERMAN, NJCPA GOVERNMENT RELATIONS DIRECTOR

After two years of wrangling, Governor Chris Christie and the New Jersey Legislature came to an agreement and enacted major legislation that renews funding for the bankrupt New Jersey Transportation Trust Fund (TTF), phases out the estate tax, cuts retirement income taxes, reduces the sales tax, provides an exemption for veterans, and increases the earned income tax credit for low-income workers. It was an historic achievement that included a great deal of bipartisan compromise over issues that have been ignored by lawmakers for years.

The NJCPA, as well as most of the other major business groups in the state, had been advocating for such a compromise package for a long time. While it appeared that a similar measure was set to be passed at the end of June, the Governor at the last minute insisted on cutting the sales tax by a penny instead of phasing out the estate tax, and the package stalled. The impasse came to an end at the beginning of October when the parties hammered out their differences and included a smaller cut to the sales tax and put back in the phase out of the estate tax.

NJCPA CEO and Executive Director Ralph Albert Thomas, CGMA, says: “While no one likes to see any kind of taxes raised, the reality is that a hike in the state’s gas tax is the only long-term viable option for ensuring that our roads, bridges and rail systems are repaired and maintained in safe operating conditions. We believe that this eight-year bipartisan plan is a fiscally responsible investment in our state’s infrastructure and brings much needed tax relief.”

Below is an outline of the package. To see the full text of the laws, go to njleg. state.nj.us.

PHASING OUT THE ESTATE TAX The Garden State is one of only two states that has an estate tax and an inheritance tax, and it has the lowest exclusion threshold for the estate tax at $675,000. The agreement includes a two-step phase out of the estate tax.

TABLE 1 — NEW RETIREMENT INCOME EXCLUSIONS FILE TYPE Joint

2016

2017

2018

2019

2020

$20,000

$40,000

$60,000

$80,000

$100,000

Individual

15,000

30,000

50,000

60,000

75,000

Separate

10,000

20,000

30,000

40,000

50,000

yy On January 1, 2017, the exclusion threshold was raised to $2 million. yy On January 1, 2018, the estate tax will be completely eliminated.

The agreement also excludes estate taxes for nonresident decedents who own New Jersey property. There are no changes to the inheritance tax.

INCREASING RETIREMENT INCOME EXCLUSIONS The agreement increases the New Jersey gross income tax pension and retirement income exclusions over the next four years for New Jersey taxpayers who are at least 62 years old, retired and have gross income of $100,000 or less. See Table 1.

DECREASING THE SALES AND USE TAX New Jersey’s sales and use tax will decrease over the next two years: yy On January 1, 2017, the tax decreased from 7 percent to 6.875 percent. yy On January 1, 2018, it will further decrease to 6.625 percent.

credit. The previous NJ EITC benefit was equal to 30 percent of the federal EITC. For taxable years beginning on or after January 1, 2016, it increased to 35 percent.

INCREASING THE GAS TAX The TTF, which was bankrupt as of June 2016, will be replenished by $2 billion a year. To accomplish this, the gas tax increased by 23 cents on November 1, 2016, bringing the total gas tax to 37.5 cents per gallon. The diesel tax increased 27 cents to a total of 44 cents per gallon. There is a provision in the bill which allows the State Treasurer to adjust the gas tax annually if the $2 billion target is not met or is exceeded. So the tax can increase or decrease each year depending on revenues collected.

Thanks to a ballot question approved by New Jerseyans in November, all of the gas tax revenue is constitutionally dedicated to the TTF, providing much-needed support for repair and upgrades to the state’s infrastructure.

ADDING A NEW PERSONAL EXEMPTION FOR VETERANS Beginning in tax year 2016, eligible New Jersey veterans will receive an additional annual personal exemption of $3,000.

READ MORE LEGISLATIVE NEWS AND UPDATES

njcpa.org/advocacy

INCREASING THE NJ EITC BENEFIT Lower-income residents benefit from an increase in the New Jersey earned income tax

NEW JERSEY CPA | JANUARY/FEBRUARY 2017

11

BUSINESS ADVISORY SERVICES

Succession Planning for Business Clients

BY P. JEFFREY CHRISTAKOS, CPA, AND DOUGLAS STIVES, CPA, MONMOUTH UNIVERSITY

As the CPA profession continues to evolve, consulting engagements offer a new way to help you serve clients and improve your bottom line. CPAs can assist business clients with determining how potential risks and threats will impact the future of the business and how to safeguard against those potential risks with succession and continuity plans. As a testament to the importance of succession planning, the Securities and Exchange Commission (SEC) in June 2016 proposed a new rule under the Investment Advisers Act of 1940. The proposed rule would require SEC-registered investment advisers to adopt and implement written business continuity and transition plans. These plans would need to be reasonably designed to address operational and other risks related to a significant disruption in the investment adviser’s operations.

Timing is critical when determining when is the right time to start a business, and it is equally important to know when to get out. Objective thinking is crucial, and CPAs can be critical resources to help their clients decide when it’s the right time to put a succession plan in place. Often times, it may be difficult for business owners to be objective. CPAs can analyze business trends and offer knowledgeable solutions to help business owners make the best decision. CPAs can determine if the business is going in the right direction and what needs to be done to plan for the future.

When clients decide they need succession planning, the CPA can help determine how to effectively monetize their invest-

12

ment in the company. For many business owners, this stage offers an opportunity to create financial capital. For some, they’ll need capital to fund pension retirement obligations. This is especially true for those who have primarily focused on investing in their own businesses instead of planning for their retirement. Some business owners may find that they have created a concentrated investment risk. CPAs who specialize in personal financial planning can help their clients diversify and build a financial foundation. When business owners are less reliant on business monetization, they can make more intelligent decisions regarding the timing of their succession plan.

SUCCESSOR DEVELOPMENT One obvious place that business owners look for successors is within the company. The skills that once were an asset for business founders might not be able to drive the company forward into the future. Finding the ideal successor depends on the stage of the company’s development. Early-stage companies tend to need people with entrepreneurial expertise and drive while more-developed companies may need people with better management skills. Family businesses often select successors by birthright and not through objective analysis. The appropriate personnel have to be identified and trained to meet the challenge, and CPAs with business advisory skills can aid in the selection and training process.

BUSINESS TRANSFER ISSUES CPAs who specialize in business valuations can guide the pricing of their clients’ busi-

JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

nesses and can also help them maximize the value of the business. CPAs with tax expertise can develop a transfer strategy that will be the most tax efficient. Estate and income tax issues need to be reviewed and incorporated. Personal financial planning experts may guide the client in the use of self-canceling installment notes or private annuities to receive payments for the sale.

You might suggest an employee stock ownership plan if the owner is interested in including the employee base in the transfer.

CPAs who specialize in merger and acquisition transactions can be brought in if the case warrants.

HOW TO GET STARTED If you are interested in helping your clients plan for their future, there are various programs available to help you gain the necessary expertise. AICPA programs and specialty credentials are available in the personal financial planning and business valuation areas. Visit aicpa.org to learn more. NJCPA has relevant interest groups that coordinate conferences and regular discussions on various topics including succession planning issues. Visit njcpa.org to learn more.

P. Jeffrey Christakos, CPA, CFP, is a partner with Christakos & Co., PC, and a specialist professor of accounting at Monmouth University. He is a member of the NJCPA Content Advisory Board and the Accounting & Auditing Standards Interest Group. He can be reached at jeff@christakoscpa.com. Douglas Stives, CPA, is a specialist professor of accounting at Monmouth University. He is a past president of the NJCPA and can be reached at dstives@monmouth.edu.

READ MORE SUCCESSION PLANNING RESOURCES

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BUSINESS ADVISORY SERVICES RESOURCES

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CORPORATE ACCOUNTING

Accounting for the Provisions of the ACA

BY JENNIFER SHIMEK AND ERIC LOWY, KPMG LLP

The Patient Protection and Affordable Care Act (ACA) and its regulations have had a sweeping impact on health insurance issuers’ traditional financial reporting protocols and regulatory compliance functions given the introduction of federal subsidies through ACA plans.

Lack of appropriate scrutiny of reported information may result in downstream impacts from potential misstatements and potential re-payment of federal subsidies collected attributed to the underlying enrollment and claims discrepancies.

ENROLLMENT REPORTING A critical step in being able to appropriately account for programs contained within the ACA is the ability to reconcile and match enrollment data received from the Health Insurance Marketplace to government fees and payment disbursements for User Fees, Federal APTC and CSR subsidies. One source of potential discrepancy relates to the handling of the ACA’s 30-day grace period prior to termination for non-subsidy-eligible members

and 90-day grace period for subsidy-eligible members. Although a new enrollment reconciliation process is underway, CPAs should perform a month-to-month true up and hindsight analysis to help confirm the accuracy of enrollment reconciliations to date.

ACA SUBSIDY AND RISK MITIGATION PROGRAMS PROGRAM TYPE

PROGRAM BASE

REPORTING BASE

Advanced Premium Tax Credit (APTC)

Premium Subsidy

Enrollment

Issuer Reporting

Cost Share Reduction (CSR)

Claim Subsidy

Enrollment & Claims

Issuer Reporting

Risk Adjustment

Enrollee Risk Redistribution

Enrollment & Claims

EDGE Server

Reinsurance (2014-2016)

High Cost (Claim)

Enrollment & Claims

EDGE Server

Risk Corridors (2014-2016)

Premium (Limits gains/losses)

Claims & General Ledger

Issuer Reporting

High Risk Pool (2017-2018)

High Cost (Claim)

Enrollment & Claims

Issuer Reporting

ACA PROGRAM

COST SHARE REDUCTION CALCULATION AND RECONCILIATION For eligible members, a claim subsidy is paid upfront based on enrollment, held as a current liability and then recognized as claims are incurred subject to the application of the “Standard Methodology.” In benefit year 2017, issuers are mandated to use the Standard Methodology to calculate the amount of claim subsidy incurred on a claim basis, thus requiring dual adjudication of eligible claims. The CSR subsidy is the difference between a claim with subsidy and a claim without subsidy with the net amount being the CSR paid by the government.

At year end, a settlement is necessary with CMS to true up the CSR payments to the amount incurred and recognized.

Therefore, a rigorous reconciliation is necessary to determine the balance to/ from the government’s policy. For enrollments that are not confirmed by CMS, the member’s CSR claims would not be eligible for CSR reimbursement. As a result, in 2014 many issuers did not receive the full amount of CSR accrued and/or may experience further repayments under desk audits.

NEW JERSEY CPA | JANUARY/FEBRUARY 2017

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CORPORATE ACCOUNTING

ACCOUNTING FOR THE THREE Rs: REINSURANCE, RISK ADJUSTMENT, RISK CORRIDORS The ACA “three Rs” programs were developed to protect issuers against market instability resulting from a large number of previously uninsured members obtaining coverage. yy Reinsurance is a budget-neutral program funded by a user fee per member. Reinsurance is applied based on funding when a member’s total eligible claims fall between an attachment point (ex. $45,000) and reinsurance cap (ex. $250,000). Therefore, recognition of reinsurance earned can be performed with some precision. To appropriately estimate a reinsurance payment, issuers should prioritize the review of high-dollar claims that were initially rejected as part of preliminary EDGE Server submissions. yy Conversely, accounting for Risk Adjustment is difficult, as risk scores are dependent upon issuers relative to their competitors, and therefore, requires an understanding of market-wide claims experience. Moving forward, there are plans to recalibrate the risk adjustment model based upon enrollee experience to date including pharmacy experience. yy The budget-neutral Risk Corridors program, aligned closely with medical loss ratio, provided protection at the plan level by limiting the loss (and gain) for issuers caused by the uncertainty in the underlying population. Since funding for the risk corridors program is still uncertain, large deviations in financial statement receivables may be realized if accruals for 2014 are greater than 12.6 percent, or any accruals for 2015 and 2016 were established.

The challenges associated with accounting for the various ACA programs have never been greater. To help confirm the accuracy of downstream financial reporting, CPAs should:

14

yy Work closely with internal upstream processes to understand key assumptions and decision points in an effort to better estimate year-end payables/receivables. yy Coordinate internal audit and model audit rule (MAR) to obtain comfort in underlying processes. yy Understand the number of EDGE Server enrollment and claim discrepancies and implications on accruals and reserves. yy Consider the uncertainty of the Risk Adjustment and Risk Corridors programs funding given the conclusion of Reinsurance and Risk Corridors programs after 2016.

Jennifer Shimek is a principal and Eric Lowy is a director in the advisory services practice at KPMG LLP. Ryan Cichy and Divya Moolchandani, senior associates at KPMG, also contributed to this article.

READ MORE CORPORATE ACCOUNTING RESOURCES

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LEARN MORE Apr. 26, 2017, Edison BUSINESS AND INDUSTRY CONFERENCE

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To read a more in-depth version

of this article, visit njcpa.org/ newjerseycpa/janfeb17.

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FINANCIAL PLANNING SERVICES

Non-GAAP Measures in Financial Planning

BY SEAN STEIN SMITH, CPA, RUTGERS SCHOOL OF BUSINESS

Financial information can be confusing for both professionals who work with it every day and for people attempting to analyze information for their personal financial plans. The sheer volume of data alone can complicate the decision-making process from an organizational and financial planning perspective.

Complicating this further is the reporting of non-GAAP information by companies, which is increasingly common for many U.S. based organizations.

According to a FASB report1, the 25 largest non-financial U.S. based companies are now reporting non-GAAP information to shareholders. But what exactly is nonGAAP information, and why does it matter to accountants and individuals building their personal financial plan?

While non-GAAP earnings obviously cannot be included in the financial statements filed by publicly traded organizations, the inclusion of such information can be present in the Management Discussion & Analysis (MD&A) section of the information that is filed with the SEC. Non-GAAP financial results, metrics and other information can be presented in different ways. One organization might not include stock-based compensation that is incentive in nature. Another might emphasize revenue growth, cash flow or other non-income-based metrics. Another tactic is the classification of certain information as “one-off ” or “one-time” items. At first glance, this might not seem like an issue worthy of further discussion. Companies, after all, often highlight specific data points that make their organizations look best.

The spread and increasing use of nonGAAP information, however, represents a significant shift in how information is communicated to shareholders, CPA practitioners and investors.

PITFALLS OF NON-GAAP DATA Although non-GAAP simply is the presentation of certain data points over

other pieces of information, it can present several pitfalls for individuals seeking to allocate capital, invest in equities or simply start planning for retirement. The true downside is that this information, which is not regulated by the CPA profession, is included and presented in the same breath as GAAP metrics such as revenue, income and earnings per share. A specific principle in the Common Sense governance principles2, supported by larger institutions and institutional investors, addresses this matter by reinforcing the secondary nature of non-GAAP information for communication purposes. Such a combination of information does appear to be a coincidence. Management teams are continuously looking to outperform investor expectations, and non-GAAP information may provide the leverage necessary to fulfill these obligations. For financial planning professionals seeking to advise investors and clients, this presents both a challenge and an opportunity.

ADDING VALUE AND INTERPRETING INFORMATION Establishing a financial plan appropriate for clients requires that both the financial professional and the individual client understand the information that is presented to them. Non-GAAP metrics muddy the waters and can make this process more difficult, depending on where the financial plan is focused. Fortunately, there are two important ways that CPAs and Certified Financial Planners (CFPs) can deliver value to the financial planning process. First, explaining what exactly is being described or communicated is clearly a role applicable to the financial planning process.

Especially pertinent in light of the spread of non-GAAP communication, this role and value-added process has taken on increasing importance. Second, and building on the first point, pertains to linking non-GAAP and GAAP information, i.e., establishing a relationship between the

non-GAAP information reported by the organization and GAAP information more familiar to financial professionals and investors.

Simply put, managing the financial planning process is a multi-faceted and rapidly changing area for accounting professionals. While you can use nonGAAP data to help explain results, it should not overshadow the GAAP results reported to both the SEC and shareholders. Management teams desire to present their organizations in the most favorable light possible, and it remains with CPAs and CFPs to ensure that the information provided to clients is accurate.

1 fasb.org/jsp/FASB/Page/Section Page&cid=1176164442130 2 governanceprinciples.org

Sean Stein Smith, CPA, DBA, M.S., M.B.A., CMA, CGMA, is an assistant professor at Rutgers School of Business, Camden. He is a member of the NJCPA Content Advisory Board, Student Programs & Scholarship Committee, Young CPAs Council, Nonprofit Interest Group and Accounting & Auditing Standards Interest Group. He can be reached at drseansteinsmith@gmail.com.

READ MORE

FINANCIAL PLANNING SERVICES RESOURCES

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LEARN MORE May 25, 2017, Linwood FINANCIAL PLANNING

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NEW JERSEY CPA | JANUARY/FEBRUARY 2017

15

FIRM & PRACTICE MANAGEMENT

Aiming at Your Target Market

BY JOSEPH A. TARASCO, CPA, ACCOUNTANTS ADVISORY GROUP

When combined with contemporary, focused and consistent marketing activities, target marketing is far more likely to succeed than a one-size-fits-all approach of indiscriminate and “shot-gun type” strategies. Determining a firm’s ideal target market is one of the most critical factors in achieving higher rates of qualified lead generation and closing prospective clients.

Many firms feel that by targeting a specific segment of the marketplace, they will forego other revenue growth opportunities. But, in fact, quite the opposite is true.

Targeting enables partners to attract a more captivated audience for the firm’s services.

SEGMENTATION TARGETING For most small to medium-size CPA firms, marketing campaigns produce disappointing results. Although there are many reasons for low marketing ROI, one significant reason is the failed strategy of trying to “be everything to everyone.”

Segmenting will provide more opportunities for the firm to focus on a specific market and clientele and will yield a higher success rate than a general approach. For example, the construction industry segment can be further sub-segmented into commercial and residential. Both can be further segmented into the types of commercial (retail stores, warehousing, office buildings), residential (single-family homes, apartment buildings, condominiums), and trades (electricians, plumbers, carpenters).

Market segmentation divides existing and prospective clients into subsets that have common needs, desires and fee sensitivities.

Marketing strategies can then be designed specifically for each sub-segment to promote the benefits of working with the firm’s partners and professional staff. This approach is more cost effective and time efficient, delivering more specific and focused messages.

THE GOALS OF TARGET MARKETING The goals of target marketing are to: yy Implement more successful lead generation and increase the closing ratio.

16

yy Position partners and staff to be more successful at business development. yy Increase realizations and client engagement profitability by targeting the best qualified client prospects. yy Shape the firm’s future for consistent growth and succession planning. yy Employ a more cost and time effective approach to practice development.

TARGET MARKET CLIENT PROFILE Once you identify segments and sub-segments, establish a list of client prospect characteristics to conduct research based upon predetermined criteria, such as the following: yy Size of the prospect based on factors like revenue and employees yy Geographic area and number of locations yy Competition yy Number of potential targets yy Investment of time and money yy Estimated ROI yy The need to train partners and staff or to acquire the required talent to provide services yy The ability of the firm’s referral sources to make introductions yy Fee sensitivity yy Risk yy Consulting and advisory services yy Net worth and/or family size and types of services (e.g., family office, personal financial business management, divorce, LGBT, wealth management) The prospective client profile should not be too narrow, or it will limit lead generation potential. However, an approach that is too broad could also hinder leads.

The key is to determine a proper mix and balance.

RESEARCHING AND FINDING TARGETED PROSPECTS There are many techniques and resources used to identify targeted prospects, including: yy LinkedIn Sales Navigator and social media sites yy Purchased company listings such as

JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

Hoovers D&B yy Attendee lists at conferences and association mailings yy Internet search engines yy Referral sources and existing clients and business contacts yy Industry and association member directories yy Other public accounting firms’ partner LinkedIn pages Also, don’t rule out existing clients for new and creative services. Targeting existing clients provides the opportunity to acknowledge that you value your relationship and their needs. When targeting existing clients, the messaging must be more customized with what you know about them, such as their industry and their “buying” cycles.

The CPA firm marketplace is changing rapidly. The consolidation of the profession is creating larger firms with greater resources, and the competition for quality clients has reached an all-time high. All of these dynamic market forces are changing the way firms will compete in the near future. It’s critical for firms of all sizes to properly position themselves in the marketplace, and target the best new clients in the appropriate segments to gain a competitive edge and sustain high levels of growth each year.

Joseph A. Tarasco, CPA, is the president of Accountants Advisory Group, LLP. He is a member of the NJCPA Content Advisory Board. He can be reached at joe@accountantsadvisory.com.

READ MORE MEASURING MARKETING: DETERMINING THE SUCCESS OF YOUR FIRM’S MARKETING EFFORTS

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CONVERTING PROSPECTS TO

WINS: GETTING A HOME RUN

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GOVERNMENTAL & NONPROFIT

How to Better Communicate Not-for-Profit Financial Performance to Stakeholders

BY DENNIS MORRONE, CPA, GRANT THORNTON LLP

The guidance in the Financial Accounting Standards Board’s (FASB) recently issued ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities, is intended to improve how organizations classify net assets in financial statements. New guidance is also provided for presenting information about liquidity and availability of resources, expenses and investment performance, and cash flows.

NET ASSET CLASSIFICATION The new guidance replaces the three classes of net assets — unrestricted, temporarily restricted and permanently restricted — currently on the statement of financial position.

It creates two new classes based on the presence or absence of donor-imposed restrictions. In the statement of activities, nonprofits must present changes in each of these two new classes: net assets with donor restrictions and net assets without donor restrictions.

The new guidance also: yy Changes the net asset classification of, and enhances quantitative and qualitative disclosures about, donor-restricted underwater endowment funds — that is, when the fair value is less than either the original gift amount or the amount required to be maintained by the donor or by law. Accordingly, if a donor-restricted endowment fund is underwater, the accumulated losses will now be included together with that fund in net assets with donor restrictions. yy Eliminates, in the absence of explicit donor stipulations on capital gifts, the option to release over the estimated life of the acquired asset the donor-imposed restrictions on gifts of cash or other assets to be used to acquire or construct a long-lived asset (the overtime approach). It now requires a nonprofit to release these donor restrictions when the assets are placed in service (the placed-in-service approach), resulting in greater comparability and consistency across the industry.

yy Requires additional disclosures with respect to board-designated net assets to include the amount, purpose and type of designations.

For nonprofits that utilize an operating measure and show governing board designations, appropriations and similar actions included in the measure, these types of transfers must now be reported with appropriate disaggregation and description by type, either broadly on the face of the statement of activities or in the notes to the financial statements.

LIQUIDITY AND AVAILABILITY OF RESOURCES The ASU includes specific disclosure requirements intended to improve a financial statement user’s ability to assess a nonprofit’s available financial resources, along with its management of liquidity and liquidity risk.

The requirements address availability of financial assets and the management of liquid resources as follows: yy Quantitative and qualitative information about the availability of the nonprofit’s financial assets to meet cash needs for general expenditures within one year of the reporting date, including factors that may affect the financial assets’ availability. yy Qualitative information in the notes to the financial statements that is useful in assessing the nonprofit’s liquidity and communicates how the nonprofit manages its liquid resources to meet cash needs for general expenditures within one year of the reporting date EXPENSE REPORTING AND INVESTMENT PERFORMANCE ASU 2016-14 requires a nonprofit to present expenses by both their natural and functional classification in a single location in the financial statements. This information can be presented on the statement of activities, as a separate statement or in the notes to the financial statements. Nonprofits must also

describe the methods used to allocate costs among program and support functions.

The new guidance also requires nonprofits to present investment performance for the reporting period net of related external and direct internal investment expenses. Direct internal investment expenses pertain to the direct conduct or direct supervision of the strategic and tactical activities related to generating investment returns. The new guidance further eliminates the current requirement to disclose the amount of netted expenses.

OPERATING CASH FLOWS Nonprofits continue to have the option to present cash flows using either the direct method or the indirect method. Those choosing to apply the direct method, however, are no longer required to present or disclose the indirect method reconciliation.

EFFECTIVE DATE, TRANSITION AND OTHER MATTERS The new guidance is effective for annual financial statements for fiscal years beginning after Dec. 15, 2017, and for interim periods within fiscal years beginning after Dec. 15, 2018. Nonprofits may early adopt ASU 2016-14 but may initially adopt it only for an annual period or for the first interim period within the fiscal year of adoption.

Use a retrospective approach to adopt the new guidance. Nonprofits may early adopt but may initially adopt only for an annual period or for the first interim period within the fiscal year of adoption.

In the adoption period, a nonprofit is required to disclose the nature of any reclassifications or restatements, including effects on changes in the net asset classes for each period presented.

Dennis Morrone, CPA, is the partner-in-charge of the not-for-profit audit practice at Grant Thornton LLP. He is a member of the NJCPA and can be reached at dennis.morrone@us.gt.com.

NEW JERSEY CPA | JANUARY/FEBRUARY 2017

17

LAW & ETHICS

Codes of Conduct: More Than Just Rules

BY DR. JAMES J. CARROLL, CPA, GEORGIAN COURT UNIVERSITY

As CPAs encounter ever-more-detailed professional codes, it’s tempting to think of them as a mere technical rulebook. But I see those codes as a badge of honor.

As licensed CPAs, we have not only mastered complex knowledge and skills, but we are entrusted with the authority to use them appropriately. Our work is more than calculations and rule application — it is exercising judgment in an environment of right and wrong.

Why is this distinction important? There are five reasons: 1. PROFESSIONAL ETHICS TURN AN OCCUPATION INTO A RESPECTED PROFESSION Professional ethics create a duty that must be respected by the members of a profession.

Our values and moral code are expressed in the rules that we set through licensing bodies and professional organizations.

The restrictions those rules impose are a major source of strength. When you assert the rules think of the phrase, “As a CPA, I am not allowed to do that.” We are not only acting ethically, but assuring our clients and the public that our reputation as moral actors is well-earned.

Ethics do not limit the CPA. Instead they empower CPAs through the credibility that they provide.

2. OUR JUDGMENTS HAVE IMPACT CPAs make judgments that move markets. Our work influences merger decisions, tax strategy, government and corporate plans, and investment decisions. And based on professional ethics, CPAs are well positioned to accept that responsibility. Our judgments are respected as accurate and sound.

Our judgments are grounded in intense technical skills, but also the understanding of their potential impact on a single transaction and society as a whole. Professional ethics root the values of CPAs in the values of our society — values that encourage and reward individual success, but within the bounds of our society.

18

3. OUR WORK RELIES ON TRUST CPAs are often considered to be “trusted advisors.” The roots of that trust are in our competencies. However, our skills need to be directed and limited to goals that are respected by our society. Professional ethics provide that direction.

Imagine our country’s 664,532 actively licensed CPAs (NASBA, April 2016), without the limits and direction of ethics.

Accounting would have no limits; our judgments could be made in the service of destructive values. Without professional ethics, “creative accounting” would be rampant, and society as we know it would quickly be destroyed.

4. CPAs REPORT TO A HIGHER AUTHORITY, NOT THE BOSS Professional ethics create an important buffer for CPAs: They allow and require us to withstand organizational pressures to serve an immediate party’s interest.

Instead, we follow our code to ensure fairness for society in general. The CPA reports to and has a direct responsibility to an outside authority — a higher power, so to speak, that exists independently of any level in an organization.

This strikes a balance on all sides. CPAs may intimidate dictatorial bosses, and that is terrific. Yet those dictatorial bosses need CPAs to have credibility in our society.

There is always a strong demand for employees who demonstrate a duty to a strong set of ethics.

5. A UNIQUE STRENGTH: INDEPENDENCE The cornerstone of the AICPA Code of Professional Conduct is independence.

Independence guarantees our integrity and objectivity in making judgments that influence client interests.

This can be challenging for clients who may be used to engaging experts as advocates, not neutral advisors. The legal roots of our society are in a court system that embraces individual advocacy. However, the professional ethics of a

JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

CPA preclude advocacy when it comes to professional judgments. So if a CPA is asked, “Which side are you on?” he or she must answer, “I cannot be on a side. I cannot be an advocate.”

This difference becomes clear when we consider the true users and beneficiaries of our work. Our clients are not the essential users of our services; instead, we support and serve the interests of society in general.

Our professional ethics define that responsibility and relationship.

Be proud of your badge of honor. Be competent. Act ethically. You are a CPA and you answer to a higher authority.

Dr. James J. Carroll, CPA, CMA, CFE, CFM, CFF, CGMA, is a professor of business administration in Georgian Court University’s School of Business & Digital Media. He is a long-standing member of the NJCPA Professional Conduct Committee and can be reached at drjamesjcarrollcpa@yahoo.com.

LAW AND ETHICS ARTICLES

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PROFESSIONAL DEVELOPMENT

Six Steps to Sales Success

BY EILEEN MONESSON, CPC, PRCOUNTS, LLC

Just like any business discipline, sales is a process that requires a strategic and disciplined approach. Accountants who invest the time to establish goals, identify target market(s), define a market-dominating position, communicate frequently with contacts, discover what prospects value and provide value-based solutions will achieve a greater level of sales success.

1. ESTABLISH GOALS Decide how much revenue you want to generate from new clients to reach your revenue goal and what needs to be done. If you want to earn $100,000 from new clients in 2017 and your typical engagement is $20,000, you will need at least five new clients to reach your goal. Determine what you will have to do to get five clients. Typically, accountants develop leads by attending networking events, nurturing referral relationships, presenting seminars, attending trade shows, writing articles/blogs and participating on social media. Decide which of these activities produces the greatest number of leads that convert to sales meetings. Calculate how much time you will need to invest in each activity, how many sales meetings you can expect from each activity and how many meetings you need to win five new clients based on your success ratio.

2. IDENTIFY YOUR TARGET MARKET(S) Some say that the “riches are in niches.”

Identify a service that appeals to businesses in your area. Ensure that there are enough companies for you to serve that are the right fit for your firm. You want to make sure that you can make money, so choose an industry niche or service area with a lot of growth potential.

Become an expert and thought leader in your niche. Know everything there is to know by subscribing to industry publications and e-newsletters, following key influencers, reading market research and talking to your clients. Then share the information you learn with prospects on a regular basis.

3. DEFINE YOUR MARKETDOMINATING POSITION It is not enough to say you are a certified public accountant who provides great service, takes a proactive approach and cares about your clients. Every accountant says the same thing. You need to define your unique position to dominate the market.

A “market-dominating position” is any value-added, client-perceived benefit, or a combination of benefits, that differentiates you from your competitors.

Prospects don’t buy based on price — they buy based on the value they receive for the price they pay. The key to adding value is determining what your clients and target market perceive as valuable.

4. COMMUNICATE FREQUENTLY WITH CONTACTS Consider developing a “drip campaign” to keep in touch with contacts over time. Base the campaign on your market-dominating position, niche expertise and the value you deliver to your clients. Make sure that prospects “opt in” or agree to receive electronic communications. Stand out from the competition by incorporating print media into the campaign.

5. DISCOVER WHAT PROSPECTS VALUE Sales meetings should focus on discovering what prospects value. Get prospects to open up, and recognize their needs, wants and pains by asking probing ques-

tion to identify emotional hot buttons.

People buy on emotions. If they don’t recognize pain or clearly know what they want, they won’t buy. The sales process is not about articulating your service offering — it’s about uncovering what the prospect values.

6. PROVIDE VALUE-BASED SOLUTIONS Focus your solution on what the prospect values. Use their words to highlight how what you offer is right for them.

Tell stories based on client experiences so they can visualize the value you can bring to the relationship. Make the decision easy for the prospect by eliminating any objections before attempting to close the deal.

Finally, a positive mindset will influence your success. The bottom line is that you have to have the right attitude and believe in the “ask” to get the sale.

Eileen Monesson, CPC, principal with PRCounts, is a strategic marketer and coach. PRCounts, a NJCPA member benefit provider, creates market dominating brands. She can be reached at 848-4593130 or emonesson@PRCounts.com.

READ MORE SELL ISN’T A FOUR-LETTER WORD

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NEW JERSEY CPA | JANUARY/FEBRUARY 2017

19

TAX

Tax Return Due Date Changes Now in Effect

BY NEIL BECOURTNEY, CPA, COHNREZNICK LLP

On July 31, 2015, President Obama signed into law the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. The main purpose of this legislation was to provide a temporary extension of federal highway and transportation spending.

Included in this legislation were various tax provisions including the following: yy Modified mortgage interest reporting yy Clarification of the six-year statute of limitations in the case of overstatement of basis yy Required consistency between estate tax value and income tax basis of assets acquired from a decedent yy Changes to the filing deadlines for various tax returns The due date changes, which are projected to raise $314 million of revenue over ten years, have taken effect for tax years beginning after December 31, 2015 (2016 tax year forward). Table 1 summarizes the new due dates for various taxpayers.

HIGHLIGHTS OF THE CHANGES yy Partnership income tax returns will be due one month earlier than in the past, by the 15th day of the third month following the close of the tax year. The extension period has been increased from five months to six months, so the extended due date will remain the same: September 15 for calendar-year partnerships. yy The extension period for trusts has been extended to 5½ months to September 30 for a calendar-year trust. This will provide some lead time for estates and trusts that receive K-1s from partnerships and S corporations. yy There are no changes to the due date for S corporation tax returns. yy For C corporations, the original due date is pushed back by one month to the 15th day of the fourth month following the close of the tax year except for June 30 fiscal year filers where the filing deadline will remain at September 15. An automatic six-month extension will be available for C corporations

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TABLE 1 — NEW DUE DATES TYPE

FORM

ORIGINAL DUE DATE

EXTENDED DUE DATE

Partnerships

1065

3/15

9/15

C Corporations

1120

4/15

9/15

Trusts and Estates

1041

4/15

9/30

Employee Benefit Plans

5500

7/31

10/15

Nonprofit

990

5/15

11/15

FBAR

FinCen 114

4/15

10/15

through 2025, except for calendar-year C corporations. yy Tax-exempt organizations will only need to file one extension request to obtain a six-month extension for 2016 and future years. yy Due date changes have also been enacted for Forms 3520, 3520-A, 4720, 5227 and 6069. yy There are no changes to the due date for individual income taxes. yy The due date for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), has been moved up to April 15. However, a six-month extension can be requested until October 15.

Many states and localities have been slow to announce whether they will implement these due date changes at the state and local level. Some states and localities historically have had due dates different from the Federal due date. New Jersey corporate tax returns have always been due one month later than the Federal due date.

Virginia personal income tax returns have always been due May 1 instead of April 15.

If all these changes were not confusing enough, Emancipation Day will again push back the April 15 filing deadline in 2017. The due date for any tax returns or tax payments normally due April 15

JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

(Saturday) — tax returns, extension requests, balances due and estimated tax payments — will be Tuesday, April 18, 2017.

Neil B. Becourtney, CPA, is a tax partner at CohnReznick LLP. He is a member of the NJCPA Federal Taxation and State Taxation interest groups and the Content Advisory Board. He can be reached at neil.becourtney@cohnreznick.com.

FEDERAL TAX NEWS AND ARTICLES

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LEARN MORE Jan. 19, Voorhees GETTING READY FOR BUSY SEASON: A GUIDE TO NEW FORMS, FILING ISSUES AND OTHER CRITICAL DEVELOPMENTS Jan 27, West Windsor TAX UPDATE Feb. 9, Paramus TAX UPDATE

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NJCPA NEWS

Designing a Vision for the Future

BY DON MEYER, NJCPA CHIEF MARKETING OFFICER

We are living in a time of rapid change and amplified complexity. The accounting profession remains proudly connected to its traditional foundation, but to ensure that tradition does not become an anchor, we must not only plan; we must also update and monitor our plans and proactively respond to the issues that affect our members.

During the past two years, the NJCPA Board of Trustees, Strategic Planning Committee and staff reviewed the Society’s strategic plan to ensure that it is agile, emergent and adaptive to ensure the NJCPA remains the professional home of New Jersey CPAs. STRATEGIC PRIORITIES After careful review, the Strategic Planning Committee affirmed that the mission and strategic pillars developed nearly a decade ago remain relevant. The previous initiatives were replaced with four directional initiatives that have strong overlap among the pillars.

“The Strategic Planning Committee is excited about the development of the NJCPA’s new strategic plan, which was designed to maximize the organization’s impact in core areas such as education, advocacy and member service, while stretching our thinking to ensure that the organization attracts and engages the next generation of professionals,” said Justin O’Horo, CPA, chair of the Strategic Planning Committee.

Below are details of the NJCPA’s new strategic plan approved by the Board of Trustees on December 2, 2016.

MISSION The NJCPA’s mission is to serve the needs of its members. The organization will: yy Promote and maintain high professional and ethical standards of public accountancy in the state of New Jersey. yy Develop and improve accountancy education. yy Protect the interests of the public and the members of the Society.

STRATEGIC PILLARS Four strategic pillars support our mission:

1. Provide membership community — Serving our members’ individual needs and providing opportunities for member engagement within the Society.

2. Support education — Serving our members’ and their staffs’ professional education needs and providing support for accounting students.

3. Encourage high professional standards — Supporting our profession’s commitment to high professional standards, competency and ethics.

4. Advocate for the CPA and public interests — Providing support for ongoing advocacy for all CPA licensing/ professional issues within the government/regulatory environment and being active participants in supporting issues that we believe are good for business and the public interests.

better understand and serve our current and future customers. yy Image Evolution — Leverage and capitalize on first-hand expertise of NJCPA members to shape policy issues that are important to CPAs and their clients. yy The Future of Learning — Study, plan and retool NJCPA CPE products and services for anticipated changes in the continuing professional education landscape to remain a leading provider of learning and expertise for CPAs in New Jersey. yy Membership 2.0 — Evaluate and set a course to improve our value proposition to remain relevant and competitive.

For more information, visit njcpa.org/strategicplan.

DIRECTIONAL INITIATIVES yy Digital Transformation — Update and further integrate our technologies to

NEW JERSEY CPA | JANUARY/FEBRUARY 2017

21

NJCPA NEWS

Help Others During Tax Season The NJCPA partners with media outlets such as the Asbury Park Press and News 12 New Jersey to provide tax assistance to Garden State residents. Members answer phone calls from the public in March and April to assist them with basic income tax preparation questions.

Christopher M. Arunkumar, CPA, has been answering calls since 2013. He says, “The questions I received show that taxpayers need CPA guidance. I realized I can make a difference.” Patsy J. Pepe, CPA,

agrees: “The general public, for the most part, does not have any working knowledge of our tax laws and how they can have detrimental effects on their finances while they are working as well as when they are retired.

I get to share my skills and help others.”

“I have learned that we need to put ourselves in other people’s shoes,” says John Apisa, CPA. “We deal with taxes and the IRS on a daily basis, but for most people it’s once a year. For non-CPAs, taxes can be very frightening. They don’t want to make

a mistake because they feel they will be heavily fined or jailed. I just try to put their minds at ease and tell them the worst-case scenario is to do an amended tax return.”

If you would like to participate in our 2017 call-in program, add “Tax-Call-In Program” to your volunteer profile (njcpa. org/volunteer), and we will send dates to you.

Save Time and Money With the NJCPA Member Benefits Marketplace

NJCPA membership adds sustainable value to your career, demonstrates a professional commitment to your employer and opens doors to knowledge and industry contacts. It also provides tangible savings through our Member Benefits Marketplace.

The marketplace is a mix of providers who offer services and discounted rates to NJCPA members such as:

22

BANKING/FINANCIAL SERVICES yy Affinity® Federal Credit Union yy Credible – Student debt refinancing

CPA EXAM PREP yy Becker Professional Education yy Roger CPA Review

BUSINESS PRODUCTS AND SERVICES yy ADP – Payroll yy Wolters Kluwer – CCH publications yy Energy Plus – Cash back on electricity yy IVDesk – IT solutions yy Merchant Advocate – Helps lower credit card processing fees yy PRCounts – Marketing/branding yy UPS – Discounted shipping

INSURANCE yy USI Affinity – Life, disability, long-term care yy CAMICO – Professional liability yy Plymouth Rock Assurance – Car insurance yy Arthur J. Gallagher & Co. – Dental, vision, group legal and identity theft coverage

BUYING POWER yy Buyer’s Edge – Lower prices on cars, appliances and more yy PerkSpot – Deals on everything from household essentials to vacations CAREER SERVICES yy NJCPA Job Bank yy Transition Advisors – Succession planning and mergers and acquisitions

JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

SPORTS AND ENTERTAINMENT yy Brooklyn Nets yy Morey’s Piers & Beachfront Waterparks TRAVEL yy Air Brook Limousine yy Avis Car Rental Make it your New Year’s resolution to keep money in your pocket. Learn more about how the Member Benefits Marketplace can help. Visit njcpa.org/marketplace.

CLASSIFIEDS

ADVERTISERS INDEX 14 ACCOUNTING PRACTICE SALES accountingpracticesales.com 9 CAPSTAN TAX capstantax.com C2 NEXT GENERATION TRUST SERVICES nextgenerationtrust.com C4 RUTGERS UNIVERSITY business.rutgers.edu/finmaccy

at our office location. Retiring partner will remain during transition period. Interested candidates should reply to essexcpa@ gmail.com.

MERGERS/ACQUISITIONS

Seize a merger acquisition opportunity with benefits for you. We are looking for firms ranging from $300,000 to $5,000,000 eager to combine forces as we continue to grow across Northern NJ, Westchester and the Hudson Valley region. Goldstein Lieberman & Company is ideally situated to service all types of industries. Visit www.glcpas. com; email me, Phillip Goldstein, CPA, managing partner, philg@glcpas.com; or call me at 800-839-5767 to have a confidential conversation.

background. Small existing client base is a plus. Excellent opportunity. Reply to File No. 1270 Traphagen & Traphagen CPAs, a well-established firm in Bergen County with diverse client base and credentialed support staff is seeking small firms and sole practitioners for acquisition or merger. We are looking for firms ranging in size from $300K to $700K. This is an opportunity to align with a quality peer reviewed firm, while continuing to provide your clients with exceptional service. To confidentially discuss this opportunity please email us at carolynn@tfgllc.com.

Passaic County peer-reviewed firm seeking to associate with compatible firm for future buy-out of principal. Principal will remain for up to one and half-years during transition to support and sustain client base; $400-450K. Reply to File No. 1269

Northern Passaic County tax firm seeks a CPA with a book of business for a future partnership opportunity. Partner retiring in 2-3 years. Contact njcpafirm1000@ gmail.com.

Retirement-minded Bergen County CPA, looking for a CPA to take over my firm.

Gross $750K+. Must have strong tax

Essex County retirement-minded CPA seeks CPA to assume his partnership interest and continue with remaining partner

CLASSIFIED ADVERTISING

Morris County peer-reviewed firm seeking sole practitioner able to take on per diem work from us and office sublet.

Affiliation or partnership will be considered. Great opportunity for motivated person. Email contact info to rvoorman@ gorvcpa.com to discuss.

New Jersey practices for sale gross revenues shown: S. NJ/DE Valley Area CPA 1.3M; Mercer Co. CPA 485K; Egg Harbor Twp. CPA $290K; Nutley CPA $206K. For more information, call 800-397-0249 or visit www.accountingpracticesales.com.

OFFICE PRODUCTS/EQUIPMENT

Beautiful large bowed antique solid oak desk, only $250; filing cabinets: black, white, beige; $25 each and more, downsizing my office. Reply to harveysrich@ harveyrichco.com or 908-614-8333.

Replies to ads with files numbers should be sent to: File_____, New Jersey CPA Classifieds, 425 Eagle Rock, Suite 100, Roseland, NJ 07068. To see additional classified listings or to place an ad, visit njcpa.org/classifieds.

NEW JERSEY CPA | JANUARY/FEBRUARY 2017

23

MEMBER STORY

People cheer on runners — even those who are putting in their miles in the middle of the night.

Jeff ’s first ultramarathon was a six-hour running event; he ran more than 30 miles.

In a subsequent ultramarathon, he ran 56 miles. Last he and May, Andrew ran in a 24-hour event and completed 70 miles.

And in May 2017, father and son will together attempt a 48-hour ultramarathon.

Jeff Christakos (left)

After Jeff had run numerous marathons and half marathons, his son, Andrew, who also works at Westfield Wealth Management, decided to join him. “He wanted to start exercising and thought that running would be a great start,” says Jeff. “I would put on my running shoes with my suit pants and run with him around the park.”

THE SCIENCE OF ULTRAMARATHON RUNNING “Running is about mind over matter and seeing what your body can do,” says Jeff.

He abides by the three Ts of ultramarathon running: yy Technique — Jeff utilizes chi running.

The idea is to keep the body straight, chest ahead of feet, and make a falling motion when moving forward so that the runner doesn’t rely on leg muscles to push off of. Runners swing their elbows to create a pendulum motion to propel forward when running up hills. Jeff uses a 90-beats-per-minute cadence with light foot bounces. “If I’m ‘falling’ for 24 hours, running for that time period isn’t that difficult,” says Jeff. yy Training — Jeff has a 12-minute-mile pace and runs three times a week. He’ll run 10 miles twice a week and up to 20 miles on a longer run, depending on the race he’s training for. yy Temperament — Although running can come with all sorts of challenges, Jeff says having a sense of humor is important — especially while running with blistering toes or in harsh weather.

TAKING ON AN ULTRAMARATHON With six marathons under his belt, Jeff decided to try an ultramarathon. “It’s a one-mile loop that’s mostly asphalt,” explains Jeff. “You have access to an open kitchen, and there are people who cook all day and all night for runners. You can have all the food you want. You can place an order, run another mile and then pick it up.” The goal isn’t to compete against time, but to run for as long as the body allows. Participants run and/or walk until exhausted and take breaks in between.

TAKING IT TO THE CLASSROOM AND THE BOARD ROOM “Whenever I have a challenging task, I know that I can press through because I’ve been able to accomplish things I thought I could never do with my body,” says Jeff.

The same strategy that helps him endure ultramarathons helps him solve problems as a business owner and professor. Jeff likes to inspire his students who might feel overwhelmed by school work. He tells them, “If an old guy can run 56 miles, you can do an extra problem or two.”

na, and son, Andrew.

with his daughter, An

Running a Business, a Classroom — and Ultramarathons

BY ELIZABETH QUIÑONES, CONTENT SPECIALIST

P. Jeffrey Christakos, CPA, wouldn’t consider himself a natural-born athlete. As a matter of fact, this Monmouth University professor and partner at Christakos & Co. and Westfield Wealth Management says he couldn’t even run a mile in high school.

But it’s definitely clear that today he has the physical and mental stamina of an athlete. Jeff has not only run eight marathons, he has completed four ultramarathons.

GETTING STARTED When Jeff was 26 years old and his career was taking off, he needed to find a way to manage work-related stress. “I would work out my anxieties on a treadmill,” says Jeff.

After realizing how much he enjoyed running, he did it more frequently. “I would run before work, during lunch and after work,” he says. He signed up for his first marathon, running from Asbury Park to Sandy Hook and back.

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JANUARY/FEBRUARY 2017 | NEW JERSEY CPA

End of Triennial* Checklist: y y y

120 CPE credits New Jersey Law and Ethics Course Annual 20 CPE Credit Minimum

Track your credits at njcpa.org/cpetracker. *The New Jersey triennial ends December 31, 2017.

REGISTER FOR COURSES AT NJCPA.ORG/EVENTS.

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