May/June 2017 by New Jersey Society of CPAs

M AY/J U N E 2 0 1 7

STAYING COMPETITIVE:

A GAME PLAN FOR BUSINESS SUCCESS

Page 4 DEVELOPING BUSINESS

Page 6 RECRUITING NEW STAFF

Page 5 BEATING THE COMPETITION

Page 8 RETAINING TOP TALENT

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contents M AY/J U N E 2 0 1 7

THE MAGAZINE OF THE NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS

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

The right strategy can motivate players even after they lose a first half. Similarly, in today’s complex business climate, companies need to bring their “game face” if they want to grow their business.

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 KATHLEEN HOFFELDER Content Editor khoffelder@njcpa.org MARC L. REIN Multimedia Specialist mrein@njcpa.org

Playing the Game: Business Development for CPAs

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An Inexact Science

New dynamics are at play when it comes to hiring. See if your firm measures up as a place that employees will want to work.

8 Retaining Talent:

Beating the Competition: Differentiating Makes a Difference

Find out how firms use integrated solutions, nontraditional offerings and marketing to gain a leg up on the competition.

2 CLOSE UP

With Purpose and Direction

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

6 Recruiting the Team:

10 ACCOUNTING, AUDITING & ATTEST

Time Is Running Out to Comply with the New FASB Revenue Recognition Standard 12 ADVOCACY & LEGISLATIVE ISSUES

Legislation on the NJCPA’s Radar 13 BECOMING A CPA

Finding Balance as a Parent, Employee and CPA Candidate 14 BUSINESS ADVISORY SERVICES

Five Ways Outsourced CFO Services Can Benefit Your Business Clients

What Makes Employees Stay?

Having dress down Fridays, annual ping pong tournaments or a more formal route to partnership can boost morale and employee retention.

16 CORPORATE ACCOUNTING

Why I Became a CGMA 18 FIRM & PRACTICE MANAGEMENT

Defending Against a Succession Planning Crisis 19 FORENSIC ACCOUNTING, LITIGATION SERVICES & BUSINESS VALUATION

Virtual Currency: Forensic Accounting Challenges and Valuation Considerations 22 PROFESSIONAL DEVELOPMENT

Take Your Career Personally 23 TAX

Deciphering New Jersey’s Angel Investor Tax Credit

24 TECHNOLOGY & INFORMATION MANAGEMENT

Creating a Disaster Plan to Ensure Your Company’s Security 26 NJCPA NEWS

yy 2017/18 NJCPA Board of Trustees yy NJCPA Proposes Bylaws Changes yy 9 Reasons to Renew Your NJCPA Membership yy NJCPA Awards $400,000 in Scholarships yy Boost Your Career with an NJCPA Leadership Appointment 31 CLASSIFIEDS 32 MEMBER STORY

Diahann W. Lassus, CPA

CLOSE UP

With Purpose and Direction BY HEATHER WEDDLE, NJCPA BRAND & STRATEGY DIRECTOR

In the January/February 2017 issue of New Jersey CPA magazine, we provided a broad overview of the New Jersey Society of CPAs’ (NJCPA) new strategic plan. But a plan without action is just a dream, so below we provide more details on how the new strategic plan will be carried out. The four new directional initiatives of the plan, which include digital transformation, image evolution, the future of learning and membership 2.0, were designed to be agile, emergent and adaptive to the changing landscape of the accounting profession. The initiatives have strong overlap among the organization’s strategic pillars — provide membership community, support education, encourage high professional standards, and advocate for the CPA and public interests — while working together to drive membership recruitment, engagement and retention. DIGITAL TRANSFORMATION As the most expansive of the four initiatives, digital transformation underpins all operations within the organization as well as every customer experience. It is designed to update and further integrate our technology platforms, tools and processes with the most up-to-date best practices to better understand and serve our current and future customers. As the baby boomer generation exits the marketplace and the digital native generations age in, we will be graded more and more on the digital experiences we create for our members and customers. Among the projects that NJCPA staff will be exploring are a texting platform that will provide immediate delivery of in-

formation; polling software that will allow us to get a quick reading of our members; an event app that empowers meeting participants; and a license management app that delivers real-time, intuitive, frictionless management of the CPA license. IMAGE EVOLUTION The NJCPA and its members are a source of unbiased facts and analysis for policymakers, legislators and business leaders in New Jersey, and our contributions to tax policy and the state budget are helping strengthen the state’s business climate. The image evolution initiative will build the political strength of the NJCPA and its members by positioning the organization with local media and lawmakers as a resource on issues beyond regulatory to include general business, tax, management, accounting, financial planning and technology. The NJCPA is conducting media training with NJCPA leaders followed by a series of introductory sit-downs with state reporters and legislators. And our advocacy priorities are available at njcpa.org/advocacy outlining issues we are focused on and the challenges associated with them. THE FUTURE OF LEARNING The shift from compliance-based to competency-based learning for CPAs in New Jersey will begin in 2018. With this shift will come new formats and new opportunities for earning CPE in smaller increments as well as new measurement and tracking of CPE. The future of learning initiative is focused on studying, planning and retooling CPE products and services

to ensure that the NJCPA remains a highly valued provider of CPE for CPAs in New Jersey. Projects in development include expanding web-based learning, strengthening relationships with education alliances, and developing a new model for NJCPA chapters that blends member engagement and CPE delivery effectively and efficiently. MEMBERSHIP 2.0 Disruptive technologies in the consumer sector are reshaping customer expectations for professional organizations. The membership 2.0 initiative will seek to understand the needs of the next generation of members and customers. The onesize-fits-all membership model is proving less attractive to today’s professionals. They expect fast, intuitive technology and more choice of products and services. To start, the NJCPA is developing an alternate membership model for firms, corporations and individuals; an expanded membership category for non-CPAs; and the option to auto renew. As we set our course for the future, these four directional initiatives provide a clear direction with purpose.

READ MORE NJCPA STRATEGIC PLAN WEB PAGE njcpa.org/strategicplan

WATCH MORE NJCPA STRATEGIC PLAN VIDEO bit.ly/StratPlanVideo

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. 63 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.

MAY/JUNE 2017 | NEW JERSEY CPA

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STAYING COMPETITIVE: A GAME PLAN FOR BUSINESS SUCCESS By KATHLEEN HOFFELDER

NJCPA CONTENT EDITOR

If accounting professionals have learned anything in this post-recessionary economy, it’s that size does not always matter. In today’s business climate, a large, multinational company can lose market share by the power of one tweet or inappropriate photo posted on social media. On the other hand, the public’s perception, a successful ad or a simple celebrity endorsement can make a small, niche company an overnight success. Competing in today’s complex business environment presents unique challenges for CPAs and their clients. Growing business, staying one step ahead of the competition, and attracting and retaining staff have become top priorities.

BUSINESS DEVELOPMENT

Growing a CPA firm or corporate accounting department today involves a lot more

CONTRIBUTORS

In order of appearance

than just expanding geographically; it involves a strategic plan that’s implemented across the entire firm. And relationship building is a key part of that. “The ability to build and maintain key business relationships is a team effort,” says Kurt Simmons, CPA, audit senior manager at Grant Thornton LLP. “We encourage people to try to develop relationships throughout the organization at all levels. More contacts, and the right ones, provide a better opportunity for success in the marketplace.” Growing relationships through external networking events, seminars, workshops and community service, for example, is an important way that CPAs can contribute to growth in their firms. Though there are various ways to approach the use of networking to build a client list, some have chosen a novel approach. Take John Murphy, head of business development at Sax LLP. His firm has de-

KURT SIMMONS, CPA Audit Senior Manager Grant Thornton LLP

MAY/JUNE 2017 | NEW JERSEY CPA

JOHN MURPHY Head of Business Development Sax LLP

veloped a culture that promotes activities to help the firm attract new clients. “We leverage monthly contests to keep business development fun, engaging and supportive for all levels. Points are awarded for activities completed not business won,” he says. That means attending a networking event or joining a nonprofit board all add up to points. “We feel if we reward activities, we’ll get better participation from the entire firm, especially inexperienced team members who aren’t quite sure where to start when looking to build their book of business. These activities are designed to show the necessary steps needed to bring on a new client,” he explains. Internal staff activities, such as transitioning clients to work with younger employees, can also help a firm grow, or, at the very least, ward off potential client losses. For example, it may be a challenge for both the older and younger genera-

JOSEPH TARASCO President Accountants Advisory Group LLC

EILEEN MONESSON, CPC Founder PRCounts

tions to work together while transitioning in the younger staff members on an account. But Joseph Tarasco, president of the Accountants Advisory Group LLC, notes that this process of enabling a client who may have only worked with a more senior contact in the past get used to younger staff can help a firm ease through any retirement challenges that come along. “A client transition plan is not a process that should take place a few years before client service partners are about to retire. It should be an ongoing, daily occurrence that takes into account transition planning and holding partners accountable for implementing transition plans and compensating them accordingly,” says Tarasco. To make that process even more seamless, two partners, if possible, he explains, should be assigned to each major client so that future transitioning of the client relationship and trusted advisor role continues. And that process should involve accountability, he adds. “Each year, senior partners should prepare a list of clients that can be transitioned to more junior partners (or senior managers designated to be partners in the short-term) and they should be accountable for transitioning clients within an agreed-upon time frame regardless of retirement dates.” Though approaching business development as a team has its advantages, CPAs should still know how to effectively follow up on a lead or make an individual call by themselves. As Grant Thornton’s Simmons puts it, “business development is always evolving. Today, there is a larger focus on building one’s individual brand. Understanding a few basic yet effective

RANDALL PAULIKENS, CPA Partner, Forensic, Litigation and Valuation Services Group Friedman LLP

techniques to conduct business development is critical.” MARKETING AND SOCIAL MEDIA’S DOMINANCE Marketing, in all forms, has taken on a more prominent role in obtaining new accounting clients, whether it is used to highlight a unique service offered or bring attention to a well-regarded partner. As Eileen Monesson, CPC, founder of PRCounts, notes, “while marketing services might be outside of the scope of a traditional consulting engagement, it should be considered as a viable option to grow your practice, gain clients, cross-sell services and improve a client’s lifetime value.” Randall Paulikens, CPA, a partner in the Forensic, Litigation and Valuation Services Group at Friedman LLP, agrees that marketing is necessary to set individual services apart. In his specialty of litigation support, “there is far more competition now than there was even five years ago. Many times, more than half of the vendors at networking events are accounting firms offering various type of services.” When is the best time to engage employees in marketing? When they are young, he explains. Since employees tend to embrace the use of marketing when networking to gain new business, Paulikens suggests the younger generation may benefit the most from starting early. “We try to get our younger staff involved in marketing as soon as possible since developing long-term relationships is the key to being successful at marketing,” he says. And failing to use marketing effectively can have dire repercussions. A 2016 InvestmentNews research study1 showed that 54 percent of the 222

SEAN STEIN SMITH, CPA Assistant Professor Rutgers School of Business

PAUL PETERSON, CPA Managing Partner Wiss LLP

corporations surveyed failed to meet their growth goals, which it attributed to poor marketing and sales methods. More than 60 percent of the companies in the study said they do not track the leads they generate: “They do not know how many leads they had last year, nor from where those leads came.” Social media, in particular, has become a necessity in building a source or contact list. From informal event photos to professional industry blogs, social media has come into its own as a way to nurture and increase a CPA’s business prospects. “Leveraging technology to maintain communication with one’s contacts helps relationships grow,” adds Grant Thornton’s Simmons. Sean Stein Smith, CPA, assistant professor at Rutgers School of Business, also sees the benefits of social media for CPAs. “Especially for Millennials, and even more so for Gen-Z, if a company or person is not on social media, and is not using it at least semi-frequently, the organization seems dated, behind the times and not an ideal fit for these growth-oriented individuals.” According to “Branding in the Age of Social Media2,” a 2016 Harvard Business Review article, social media is what binds communities that were once geographically isolated together, “greatly increasing the pace and intensity of collaboration.” It explains, “now that these once-remote communities are densely networked, their cultural influence has become direct and substantial.”

BEATING THE COMPETITION

Exemplary client service. What is it? How does a CPA achieve it? And how does it

EDWARD GUTTENPLAN, CPA Managing Shareholder Wilkin & Guttenplan, P.C.

DEBORAH NORWICKE, CPA Shareholder Wilkin & Guttenplan, P.C.

NEW JERSEY CPA | MAY/JUNE 2017

make a firm stand out from the pack? The answers vary by size, commitment, the kind of plan that is put into place and what method is chosen to implement those plans. To beat the competition, some firms focus on enhancing services offered and others look to expand the overall quantity. Whichever path is chosen, one thread is common to both — the customer has to come first. INTEGRATED CLIENT SOLUTIONS Many CPA firms compete on revenue, number of clients, size of the firm, geographic locations, the number of partners, or the amount of CPAs versed in a particular specialty, such as tax or audit, for example. Others compete on non-technical advisory services such as divorce consultation, financial and retirement services, or running family businesses. But surviving and thriving in a world of consolidation and challenging economic times means bringing a cohesive set of service offerings to the client’s table. “Delivering quality compliance-type services is no longer enough to be considered a firm that provides quality service. Clients and the marketplace are demanding much more. They want their accounting firm to be an integrated solution services provider,” says Accountants Advisory Group’s Tarasco. And firms that don’t adapt, he says, could end up buried in volumes of low-profit work. NONTRADITIONAL OFFERINGS Agile may not be the first word that comes to mind when describing staff at a CPA firm or accounting department but it does best describe the trait that employees should have in competing for new business today. Offering a new or unique service to clients can revive a practice or help it to shine brightly amid a sea of other firms. “What better way to differentiate a firm in its marketplace than to be at the leading edge of a new and appealing service that integrates with current services and is value added?” asks Tarasco. While small and mid-size CPA firms may not be embracing every new trend just yet, they are increasingly looking towards nontraditional areas of service to compete. Cloud consulting, human resource compliance, eldercare solutions, retirement preparation and family business planning are all services that are now offered on a

MAY/JUNE 2017 | NEW JERSEY CPA

regular basis at CPA firms. Sax LLP, for one, saw the value in expanding into family office services that help manage daily financial activities for high-net-worth families. Last July, Sax expanded its team to include experienced family office staff from HMK Associates in Morristown. In another innovative offering, Geltrude & Company has a dedicated practice area for the LGBT community. The Geltrude LGBT Community Practice Group was established so that same-sex married couples would be able to take advantage of many of the benefits previously available only to heterosexual married couples. It provides services to LGBT individuals who are single, married, registered domestic partners, cohabitated or divorced. MARKETING AS A DIFFERENTIATOR Marketing those new services remains a big part of helping firms stay competitive. Monesson of PRCounts says it’s imperative for marketers to present the unique value their firm can bring to a relationship or they have to fall back on price. “Since accounting and tax services are considered a commodity, most firms compete on price instead of value. Unless you can truly differentiate your firm from the competition, a prospect or client may not see how they will benefit from working with you and therefore decide on price,” she says. The Big Four, for example, have been at the forefront of navigating the competitive landscape due to their sheer size and amount of resources. By offering to expand advertising and marketing services by purchasing creative firms and digital consultancies, they have upped the bar on service offerings for accounting clients. The Big Four are also now interested in offering more encompassing legal services. A few have already jumped on this bandwagon; others are still considering its return against more traditional litigation support services. When CPA firms invest in marketing services or form their own marketing services group, the value the firm can deliver is clearly demonstrated and measurable, adds Monesson. Marketing automation and new IT software has helped put a price tag on content and other marketing

services. Monesson says this is particularly useful when it comes to client relationship management (CRM). Analyzing data about client interaction, including marketing, is growing in importance to CPA firms. However, even traditional client evaluations still assist firms in determining competitiveness. “From consistent client surveys to regularly scheduled meetings to a formalized client service delivery model, we’re always looking for feedback from our clients on how we can better serve them and their business,” explains Sax’s Murphy. For Grant Thornton’s Simmons, personalized service is what helps his firm remain competitive. “We understand our clients’ business environments and are nimble and responsive to them. We strive to provide clients with an experience that is personalized with a deep understanding of each client’s business objectives and needs,” he says. Other firms look inward when it comes to positioning themselves against the competition. According to Paul Peterson, CPA, managing partner at Wiss LLP, his firm “revolutionized” how it carried out tasks. “We stretched outside our comfort zone to produce top-quality results. Fortunately, all generations at Wiss understand that maintaining a competitive edge means transforming our environment to fit the needs of all,” he explains.

RECRUITING NEW STAFF

Determining the right number of new hires for a CPA firm is an inexact science. Some firms may stick to a more traditional approach and hire a certain number of new graduates annually, while guiding them through established training routes; others choose a more ad hoc mechanism to determine where new hires, if any, could contribute, or there may be no hires in a given year. Accountants Advisory Group’s Tarasco notes that hiring varies across staff levels. Hiring considerations, he says, should take into account “the number of retiring partners over the next five years, potential new business in the pipeline for the next six months, and hiring talent that are experts in niches or industry groups.” And costs determine who gets hired, too. “Hiring decisions should also take into account controlling direct labor costs and the

ability for a firm to provide client services at maximum realization rates by delegating work to the lowest levels possible,” explains Tarasco. Existing staff who may have become stagnant in their role should also be included in the mix when considering whether to hire replacements, he says. NEW DYNAMICS Getting the word out that a firm is hiring can be a daunting task. A recent Accounting Today “Secrets of the Top 100 Firms” webinar cited recruiting and retaining qualified employees as one of the biggest challenges facing firms. Job boards, networking events, college/ graduate school meetings, headhunters and social media posts all have their value in recruiting new accounting staff. But, as Edward I. Guttenplan, CPA, managing shareholder at Wilkin & Guttenplan, P.C., notes, “one size does not fit all.”

Using the right mixture of these methods (along with old fashioned “word of mouth”) should simultaneously help attract more mature hires and those new to the job world. Guttenplan explains that having a multigenerational approach to hiring helps both sides of that fence. “We continually talk about the strengths of each of our generational constituencies. In addition, most motivating of all to encourage multigenerational thinking is to warn our youngest to get ready for Generation Z,” he says. This cross-generational approach to hiring is particularly prevalent at Grant Thornton. “We have a people-first mindset,” explains Simmons. “Grant Thornton continues to evolve its recruiting methodology with technological advances, such as marketing via social media. We also combine digital strategies with traditional recruitment vehicles, such as using iPads

for email registration during student career fairs.” Sean Stein Smith also sees CPAs warming to the use of nontraditional methods of recruiting. “The biggest change or evolution that I have seen personally, and heard about from colleagues, is the importance of social media in attracting new staff, and keeping new staff informed of changes at the organization.” He adds, “Organizations might not routinely extend job offers over Snapchat, or at least not that I have heard yet, but the importance of social media to attract and engage with staff cannot be overstated.” Office design, location and employee work space can also attract potential candidates or even prevent candidates from joining a firm. “The bottom line is, we want to empower our people, which helps achieve distinctive client service,” says Simmons. And a simple way to do that, he adds, is

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to have attractive work spaces. “Our office spaces are designed to support employee collaboration and innovation.”

RETAINING TOP TALENT

How fast CPA firms adapt to change has come to be valued, but so is a firm’s ability to hold onto its key employees. As Accountants Advisory Group’s Tarasco explains, “firms may not be capable of achieving their short-term and long-term strategic goals and objectives if they fail to make the necessary changes within their organizations to create the proper culture and environment to retain quality and talented staff.” FLEXIBLE WORK SPACES An Institute of Management Accountants (IMA) survey of 85 senior finance professionals last July cited the most successful practices for retaining employees within the Millennial generation, for one, are those that address flex time. Almost 50 percent said flexible work arrangements were key to holding onto Millennials. This ranked even higher than having competitive salaries and benefits for that generation, with only 44 percent of respondents agreeing. Considering that 49 percent of respondents in the IMA survey said Millennials stay at their company only one to three years, adding flexible schedules could help companies retain that group longer. Peterson of Wiss sees the importance of offering a modern workplace as a retention tactic: “Technology continues to advance, client demands are shifting and employees are challenging primitive workplace norms that earlier generations had accepted as commonplace. This presents challenges for employers striving to retain the best talent.” And younger generations, he says, need to be addressed critically: “Since younger personnel prove the toughest to retain, we’ve implemented initiatives to generate an appealing work environment. We have established freedom of choice, encouraging autonomy among employees so that they can dress for their day.” Wiss also exercises unlimited paid time off. Adapting a flexible work policy has helped Grant Thornton to hold onto many of its staff, whether mature or young. “Our firm-wide turnover rate dropped 10 percent

MAY/JUNE 2017 | NEW JERSEY CPA

in 2016. This was a result of the firm’s emphasis on its culture and retention and the introduction of new benefits, such as a flexible time off policy,” says Simmons. This, he explains, “…allows our employees to take time off as needed to meet their individual needs — instead of a predetermined set of paid time off days.” Satisfied employees, he adds, tend to stay put, providing clients with engagement team continuity and a consistent, positive experience. Having a flexible work structure also applies to daily functions. Wiss’ Peterson says his firm uses a customized approach to retain employees. “As a young firm, we encourage our employees to hone in on their strengths and allow them to dabble in various areas until they find their true passion,” he says. PARTNERSHIP PATH Professional development can, at times, seem like a long and winding road that doesn’t lead anywhere. To retain key talent, CPA firms need to have a route to partnership mapped out and clearly presented to employees. This should eliminate any anxiety staff may have about what’s expected of them. Having a formal process to determine who may be strong future partners is key to retaining talent, according to Deborah Norwicke, CPA, shareholder at Wilkin & Guttenplan and chair of the Pathway to Partner Program, the firm’s partnership assessment program. “A formalized program shows staff that we are investing in and guiding them to become partner someday. It further proves our current partner group’s commitment to firm continuity and, as a result, have an amazing leadership pipeline,” she says. At Wilkin & Guttenplan, this partner development program is a two-step process: Step one is to identify strong future partners and step two is to determine an individual’s pathway for partner progress. However, it’s important to communicate that in an effort to become a successful partner, “one must excel in several areas and be proficient in most,” says Norwicke. “Some are technically strong, while others share business development successes. Some thrive in staff development, while others excel in client service.” Developing an assessment tool, she says, helps determine where the individual stands in the process of becoming partner.

“It is imperative that this assessment not focus on the performance standards required to sustain the job — timely billing, networking and client service. Rather, it is important to focus on attributes such as business acumen, developing a specialization, empowering others and entrepreneurial spirit, as well as benchmarks for success,” she says. The firm also has a tiered committee structure that includes an Emerging Entrepreneurs Group, a network that connects emerging leaders with emerging entrepreneurs/peers in the business world, as well as Future Council, Advisory and NexGen programs. Similarly, Grant Thornton has a training program in place for those bound for partnership. Its Senior Manager Academy helps build a pipeline of leaders at the firm who can learn from those already in partner-level roles. Friedman’s Paulikens agrees that some of the old processes for professional development among CPAs are no longer suitable. “Staff retention is obviously a critical ingredient for long-term success. In the ‘old days,’ you used to have the ‘May Parade’ when the temporary help you hired during tax season was let go. Now, we realize how many resources are tied up in the hiring and retention of staff,” he says. And losing talent is hard on managers, partners and support staff alike. “Some studies indicate that up to one year’s pay is spent between recruiting, training and ramping up of productivity. If that staff person leaves after a short period of time, you are continually starting over,” he adds. WORK/LIFE BALANCE A satisfactory work/life balance is favored by both mature and newly-minted CPAs alike. Accountants Advisory Group’s Tarasco says while fair and appropriate compensation, rewards, recognition and bonus incentive systems need to be included in the mix for retaining staff, so does allowing for a life outside the office. At the end of the day, there needs to be “respect for ‘quality of life issues’ including a generous personal time off policy,” he adds. Firms must adopt a true staff-centric culture, he says. “Simply stated, a staff-centric culture is an array of interrelated comprehensive and customized policies, programs, attitudes and behaviors that create the best

possible environment to retain your most talented professionals.” Nothing beats a well-deserved raise, but offering a dress code perk, such as dressing down when not in meetings or on Fridays, just may be another reason for both mature and new CPAs to stay on the job. As Rutgers School of Business’ Sean Stein Smith says, “It might seem like a small thing, but being able to ditch the tie can help employee morale and engagement.” The same goes for “fun” activities in the work space, such as stations where employees can get up from their desk, gather together or even play a game. As Wiss’ Peterson says, “We place emphasis on office activities, like pingpong tournaments and arcade games, and transforming our space, providing collaborative work areas to encourage brainstorming and creativity.”

Adds Friedman’s Paulikens: “Having fun events periodically, such as picnics and outings, is a great tool. The laughter and memories reverberate long afterwards. Any production that was lost is made up by higher productivity and less turnover.” And keeping the office environment positive seems to go hand in hand with maintaining a positive work/life balance. Meetings are a perfect example, according to Guttenplan of Wilken & Guttenplan. He says excitement has to start at the top, with firm leaders and partners. “We start every meeting with success stories. Starting with positive energy influences the collective mindset. This excitement is enhanced by listening, being open to change and engaging the staff in how change takes place.” Stein Smith agrees that employees need to be excited about coming to work. “Obviously, reconciling accounts receiv-

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able schedules to cash flow statements might not excite everyone, but everybody is passionate about something. As managers, a primary responsibility is to match up employee aptitude with the work that maximizes their talents,” he says.

1 investmentnews.com/assets/docs/CI107014913.PDF 2 hbr.org/2016/03/branding-in-the-age-of-social-media

READ MORE CLIENT ACQUISITION AND RETENTION RESOURCES njcpa.org/topics/clients

EMPLOYEE MANAGEMENT RESOURCES njcpa.org/topics/ employeemanagement

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ACCOUNTING, AUDITING & ATTEST

Time Is Running Out to Comply with the New FASB Revenue Recognition Standard Planning for Lease Accounting Standard Should Be In Process, Too BY KEVIN BOGLE, KPMG LLP

Research indicates that some companies may have trouble meeting the reporting deadlines on at least one of two major accounting standards that financial statement preparers must implement over the coming two years. Revenue recognition — the more immediate, as it goes into effect on Jan. 1, 2018, for calendar-year-end public companies and Jan. 1, 2019, for calendar-year-end non-public companies — may represent a significant change, and one that many companies may be behind in implementing. The new accounting standard for revenue recognition replaces a complex set of existing U.S. Generally Accepted Accounting Principles (GAAP) and industry practices that have more than 100 existing sources of revenue recognition guidance. But a KPMG survey of more than 475 financial reporting executives in December 2016 found that two-thirds of their organizations remained in the assessment phase, as opposed to designing their future state or being in the implementation phase, and only 19 percent had started considering the ramifications of the standard. Companies should have completed their assessment and be in the implementation phase already, but the survey results indicated only 13 percent have started implementation which may forecast a last-minute dash to the finish line for revenue recognition. Emphasis should be on moving beyond assessment to development of processes, systems and internal controls, as well as full implementation. The Financial Accounting Standards Board (FASB) has also adopted a new standard for lease accounting that will require companies to recognize most leases on-balance sheet, effective Jan. 1, 2019, for calendar year-end public companies and one year later for calendar year-end non-public companies. While complying

MAY/JUNE 2017 | NEW JERSEY CPA

with these standards may seem arduous, timely adoption of the new rules is imperative. Otherwise, companies will find that: yy Their financial statements will no longer be in accordance with GAAP. yy They will not be able to get a “clean” audit opinion. yy If they are a public company, they will not be able to comply with SEC requirements. Many companies will also be faced with changes to their processes, systems and internal controls. The accounting, finance, tax, IT and investor relations

KPMG survey: Revenue recognition implementation lagging

departments will need to work together to develop a coordinated response to the new standards.

What is your organization’s progress toward adopting the new revenue recognition standard? 100 90 80 70 60 50 40 -

62%

30 20 10 0-

19% Not yet begun

Assessment of accounting impacts

Systems requirement development

2% Software vendor selection

13% Implementation in Progress

1% Implementation completed

What transition method do you intend to use when adopting the revenue recognition standard? Retrospective

20%

80%

Modified Retrospective

Source: Survey of financial reporting executives at KPMG’s Accounting and Financial Reporting Symposium, Dec. 1-2, 2016 © 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 640043

ACCOUNTING, AUDITING & ATTEST

CAREFULLY MANAGE THE IMPLEMENTATION PROCESS FOR NEW ACCOUNTING STANDARDS Preparers of financial information should have a plan to ensure compliance with the new revenue recognition and lease accounting standards that go into effect in the coming two years. They should already have considered the following important steps: Establish a project management office (PMO) for each standard The PMO should coordinate all aspects of implementation, which should be based on a comprehensive and detailed gap analysis that identifies the difference between current accounting, tax and reporting compared to the new standards and identifies how those gaps impact systems, processes, availability of data, people and underlying contracts. This impact analysis, along with the identified gaps, will facilitate the development of a plan and help control the implementation process. The PMO should also have timely involvement with the external auditor to ensure there is alignment throughout the process and that there are no surprises at the end.

This year and next will be a demanding time for our profession, as preparers in all industries will be affected and time is of the essence to assess and comply with these standards. Staying updated on new developments and industry interpretations will be key to successful implementation, and realistic timelines and clear accountability will be critical. The new standards will impact each company in varying ways, so the best course of action is to be prepared. Kevin Bogle is a principal in KPMG’s Accounting Advisory Services group within the Deal Advisory practice. He specializes in accounting, financial

Design and understand the new reporting environment Both of the new standards have specific transition rules that will allow companies to select adoption alternatives that will impact the transition and future periods. In addition, companies can opt to use the transition as an opportunity to design solutions that address existing gaps in accounting processes and systems or automate certain accounting processes that are currently performed manually. Unlike previous revenue recognition standards that allowed companies to apply new rules prospectively, this standard requires retrospective adoption by restating all comparative periods or creating a cumulative “catch-up” adjustment in the year of adoption. This could take a significant amount of time to implement accurately. The new lease accounting standard also requires retrospective adoption by restating all comparative periods. For most companies, this will require a comprehensive and potentially complex “look back” into historical transactions that remain open on the

reporting and project management for complex transactions under U.S. GAAP and IFRS. In this role, Kevin supports clients in the design and implementation of financial reporting environments to meet new internal and external reporting requirements as a result of a transaction or accounting conversion. READ MORE CPAs LAG IN REVENUE RECOGNITION IMPLEMENTATION bit.ly/RevRecLag REVENUE RECOGNITION ARTICLES AND RESOURCES njcpa.org/topics/revenuerecognition

effective date in order to recalculate historical revenue and/or expense under the new rules. If changes to IT systems are needed or new systems will be developed, it will take more time to complete implementation and, therefore, this will need to be factored into the design phase. Implement the accounting change Making these significant accounting, tax and reporting changes may take several iterations before the new financial reporting environment becomes business as usual. It is important to allow enough time to: yy Test the new reporting environment and make necessary corrections. yy Document, implement and test the new controls over financial reporting. yy Create a communication plan both internally and externally so that stakeholders understand the impact of adopting the new standards. yy Conduct necessary internal trainings on the accounting and new processes

LEARN MORE AUG. 28, 2017, ROSELAND RACE TOWARD IMPLEMENTION: TACKLING THE TOUGH ISSUES IN ADOPTING THE NEW REVENUE RECOGNITION STANDARD OCT. 18, 2017, ISELIN REVENUE RECOGNITION: MASTERING THE NEW FASB REQUIREMENTS Register at njcpa.org/events

NEW JERSEY CPA | MAY/JUNE 2017

ADVOCACY & LEGISLATIVE ISSUES

Legislation on the NJCPA’s Radar BY JEFFREY T. KASZERMAN, NJCPA GOVERNMENT RELATIONS DIRECTOR

NJCPA SEEKS INTRODUCTION OF SECTION 1202 LEGISLATION In an effort to promote investment and job creation in New Jersey, the NJCPA is meeting with legislators to discuss introducing legislation that would make the state follow the lead of the federal government and the vast majority of states by offering Internal Revenue Code “Section 1202” tax incentives. The incentives would be targeted at New Jersey-based business owners willing to make a long-term commitment to investing in small and medium-sized statebased companies. The NJCPA believes Section 1202 legislation would help emerging small companies and encourage economic growth and job creation. The NJCPA is working with BioNJ, a network of 400 companies representing research-based life sciences companies and stakeholders, to move this initiative forward. Most states follow the federal government’s lead and provide Section 1202 incentives to qualified business owners. In fact, of the states that have a personal income tax, 37 provide some form of Section 1202 incentives, including New York, Connecticut, Delaware and Massachusetts. ACCOUNTANCY ACT LEGISLATION CLEARS KEY HURDLE Legislation (A3959) that would amend the New Jersey Accountancy Act of 1997 to make it conform with the Uniform Accountancy Act (UAA) cleared a key hurdle in December when it passed the Assembly Regulated Professions Committee. The UAA is model legislation written jointly by the National Association of State Boards of Accountancy and the American Institute of CPAs. It is an “evergreen” or long-term model licensing law developed to provide a uniform approach to regulation of the accounting profession. It is designed to ensure protection of the public interest, respond to evolving changes in the practice of accountancy, and make the interstate practice of accounting efficient.

MAY/JUNE 2017 | NEW JERSEY CPA

All of the states in the country adhere as much as possible to the UAA. The statutes governing the CPA profession in New Jersey have not been updated for 20 years. They urgently need to be updated to reflect changes in the business environment and CPA profession, and to conform to the latest edition of the UAA. A3959 achieves all these important goals. LEGISLATURE FAILS TO OVERRIDE GOVERNOR’S VETO OF S992 The NJCPA and just about every other business group in the state successfully lobbied legislators this year to vote no on several attempts to override Governor Christie’s veto of S992. In 2016, Christie vetoed S992 because, while it has the stated intention of promoting equal pay for women, it’s actually a vehicle being pushed by plaintiff attorneys to make it easier for them to file abusive lawsuits. The NJCPA and CPA firms in general have been out front supporting equal pay for women. However, this bill is not really about gender equity. In addition to encouraging abusive lawsuits, the bill also imposes onerous reporting requirements on employers that will do little, if anything, to improve pay disparity. Furthermore, there are already a slew of state and federal

laws and court decisions that address gender parity in the workplace. There are other problems with the bill as well. For example, in Alexander v. Seton Hall University, 204 N.J. 219, the New Jersey Supreme court ruled that each paycheck resulting from a discriminatory pay decision constitutes an actionable act of discrimination under New Jersey’s Law Against Discrimination (LAD). However, the court limited the recovery of back wages to a two-year period, consistent with the federal Lilly Ledbetter Fair Pay Act of 2009 and prior case law. Likewise, it ruled that the “continuing violation doctrine” — which extends the life of a claim back to the initial date of an alleged discriminatory practice — is not applicable to pay discrimination claims under the LAD. S992 departs from that decision, essentially stopping the statute of limitations clock and applying the continuing violation theory for actions that may have occurred 20 or 30 years ago. Even if a claim against an employer is without merit, the employer still must spend time and money defending against it. This becomes all the more difficult if relevant records no longer exist or witnesses are no longer available. For more information on these and other legislative issues, visit njcpa.org/ advocacy.

BECOMING A CPA

Finding Balance as a Parent, Employee and CPA Candidate BY MELISSA A. ALLEN, CPA, FRIEDMAN LLP

When I made the decision to obtain my CPA license, I had a three-year-old daughter and worked full-time at a public accounting firm. This balancing act appeared rather daunting, but I was determined to succeed. Finding balance is a process. However, as I discovered, there are many benefits to this journey. Developing a plan was essential for figuring out the proper balance between my role as mother, employee and CPA exam candidate. My plan consisted of three main elements: 1. DEVELOPING A TIMELINE The first step involved developing a timeline and communicating with those I knew would be affected most, both personally and professionally. The timeline included an estimate of the amount of hours needed to study for each section over the next year. After finalizing the timeline, I met with the family members who assist in watching my daughter and my supervisors to align my timeline with their needs and concerns. 2. MANAGING EXPECTATIONS The next step involved managing expectations. Professionally, these expectations were understood as both my supervisors and co-workers had previously gone through the CPA exam process. The more complicated expectations to manage were those of my family and friends. I was honest about the depth of commitment this was going to require and how it would affect them. I emphasized that for the next year my personal interaction would be limited as every moment of non-work or parenting time would involve studying. Finally, I explained the true purpose of my endeavor, which was to provide lifelong financial security for my family. 3. ACHIEVING INTERNAL BALANCE Now that I had developed an efficient plan to balance my personal and professional relationships, my last step was to account for an internal balance. Often,

we put ourselves and our needs last. But in order to balance the outside, we need a solid foundation on the inside. Taking on the CPA exam while balancing other responsibilities can be a demanding challenge, and although there may have been days when I felt defeated, those feelings were conquered by continual perseverance â&#x20AC;&#x201D; producing the strength to overcome future challenges. Reflecting back, I know that this part of my life aided in building the self-respect and self-confidence needed to help me grow both personally and professionally. I recall the day my state CPA license arrived in the mail; I opened that envelope proudly and imme-

diately took the certificate over to show my daughter. I explained to her that this represented all of her motherâ&#x20AC;&#x2122;s hard work and time spent away from her over the past year. When it comes to the CPA exam, do not focus on your past failures or other future responsibilities but on the present moment of studying, built upon the internal foundation of dedication and determination. Melissa Allen, CPA, is a senior manager at Friedman LLP focusing on nonprofit organizations, governmental entities, construction contractors and healthcare entities. She is a member of the NJCPA and can be reached at mallen@friedmanllp.com.

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NEW JERSEY CPA | MAY/JUNE 2017

BUSINESS ADVISORY SERVICES

Five Ways Outsourced CFO Services Can Benefit Your Business Clients BY RICHARD T. VELTRE JR., CPA, HARBOUR ROCK CONSULTING LLC

When asked what outsourced CFO services are, the answer invariably includes a story about Joe, an engineer experiencing significant financial challenges. With his technical background, he had built a growing international telecommunications network — but company growth had stalled. Although Joe had 15 employees, financial operations were delegated to an office manager. To relieve his frustration, Joe hired an outsourced CFO who began digging through his company’s available financial data. After several days of analysis and interviews, the CFO presented a solution: a new profit and loss statement segmented by satellite. Joe immediately recognized the source of his challenges and canceled unused satellites and renegotiated rates on less profitable satellites. The changes increased profitability, leading to an increase in available cash which he used to expand profitable satellites. The ultimate result was a return to growth. You can easily replace Joe with any of your clients. For-profit businesses share at least two common goals: improving profitability and increasing shareholder value. In Joe’s case, he received information he needed to make critical decisions about profitability. This did not require a fulltime solution. Instead, an outsourced CFO delivered high-level financial expertise. Joe utilized the flexibility that comes with hiring an outside consultant — for a fraction of the cost of an employee — and he still received the strategic financial guidance he required. As intelligent as your clients may be, at some point they could benefit from knowing someone with more extensive financial expertise and experience. Here are five occasions your business clients could benefit from outsourced CFO services: 1. Loss of a CFO. This can be devastating to a growing company. Outsourced CFO services can seamlessly integrate an experienced professional to assist

MAY/JUNE 2017 | NEW JERSEY CPA

business managers who need additional expertise. The void created by the full-time CFO is filled — temporarily — by the outsourced professional. 2. Planning a sale or exit. Planning the transfer of a business requires detailed preparation. An experienced, outsourced CFO can help plan for the implications of the decision and assist with the process. An entrepreneur-led company will have greater value, and be easier to sell, if systems, people and processes are in place to ensure that business will continue when the current owner exits. 3. The need for better reports. If the company’s systems cannot generate the financial reports required by management, bankers, shareholders and partners, an outsourced CFO can help find the best solution for that problem and set the business on track for the future. Whether it’s a redesign of a current system or a new enterprise resource planning (ERP) system implementation, an outsourced CFO knows what the aforementioned groups expect. 4. Geographic expansion. Growth brings challenges, and growth into new geographies makes those challenges even more complex. Whether a business is adding a warehouse or creating a foreign subsidiary, adding a new location affects both systems and processes. An outsourced CFO can help with regulatory compliance, system integration and any financial challenges that may arise. 5. New debt or capital funding. A CFO should lead the effort in finding new sources of capital for a business, but in the absence of a full-time CFO, an outsourced CFO can achieve the same results. From understanding the needs and goals of the organiza-

tion to negotiating with the banks for debt financing, the outsourced CFO ensures that the business isn’t giving up too much in exchange for too little. In all five of these scenarios, outsourced CFO services can seamlessly integrate an experienced professional into a business whose managers need additional expertise. The engagement can be on a recurring or as-needed basis, which offers smaller companies trying to achieve growth the opportunity to obtain assistance until they can afford a full-time financial executive. An outsourced CFO offers executives and staff more detailed insight into the company’s financials so they can make better business decisions, and the management team can learn about financial issues so they can spend more time on growth and improving enterprise value rather than administration and overhead. And, by taking a proactive approach, together they can identify risks, evaluate options and implement solutions at a cost well below the benefit. Richard T. Veltre, CPA, MBA, is the founder and managing member of Harbour Rock LLC, an outsourced CFO firm assisting small and mid-sized business with strategic insight at fractional cost. He is a member of the NJCPA and can be reached at rveltre@harbour-rock.com or 917-477-3215.

READ MORE BUSINESS ADVISORY SERVICES ARTICLES AND RESOURCES njcpa.org/topics/advisory

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CORPORATE ACCOUNTING

Why I Became a CGMA BY STEPHEN MCCARTHY, CPA, CGMA, THE PRESIDENTS FORUM

A CHANGING DIRECTION AT THE AICPA In early 2015, in response to the realities of a changing workplace and external pressures, the AICPA and the Chartered Institute of Management Accountants (CIMA) worked together to create the new CGMA certification. Built around a “Competency Framework,” the CGMA encompasses the business, technical, leadership and interpersonal skills that are needed by business leaders in today’s dynamic, complex world.

THE LEARNING PROCESS At the NJCPA Annual Convention & Expo in June 2015, with Tom Peters’ inspiration in mind, I was informed about a three-day workshop hosted by the AICPA to prepare for the CGMA exam. I subsequently attended the workshop, and I was surrounded by young management accountants sent by their global companies to learn much-needed skills. As the owner of The Presidents Forum, a business leadership organization, and as a professor in Kean University’s Accounting Department, I am exposed to strategic and accounting issues on a regular basis. However, with greater levels of qualitative and quantitative information available, there is a need for new skills that go beyond financial accounting. Furthermore, for the success of both my business and my role as an accounting professor, I must have an awareness of not only financial accounting for the present but also forecasting specific and global trends. There is an expression, “If it doesn’t challenge you, it doesn’t change you.” I quickly learned that the challenge of preparing for the CGMA exam would require me to study throughout the summer. But since I intended to pass, putting in the effort was a no-brainer.

TOM PETERS’ TWITTER STREAM On New Year’s Day in 2014, Tom Peters, an American business writer and co-author of “In Search of Excellence,” began the year with a Twitter stream on personal development. Peters tweeted that “public policy is largely irrelevant, that revolutionary economic structural change is here to stay and the only defense is personal development NOW.” Developing mastery in your areas of strength helps you stand out, which is always good insurance for the future. Peters strongly encourages us to anticipate trends and position ourselves to be ready for whatever roles emerge in the looming reshaping of jobs. Like most accountants, I am goal oriented, so Peters’ tweets ignited a drive for me to find my next challenge.

THE NEED TO KEEP SKILLS UP TO DATE By requiring continuing profession education, public accounting as a profession commits to the core value of continuous and lifelong learning. Accountants, as well as the businesses they serve, receive the benefit when education is targeted to need. For me, the CPE credits directed towards CGMA certification in 2015 were well worth the investment; the skills I learned have certainly been applied over the past two years. To repeat, “If it doesn’t challenge you, it doesn’t change you.” My goal was to embrace Tom Peters’ challenge and get out of my comfort zone. Personal development is the only defense against economic struc-

The short answer as to why I became a Chartered Global Management Accountant (CGMA) was to improve my business and to better prepare my accounting undergraduate students for industry challenges. The longer answer involves a thirst for learning instilled early by my grandfather. He was a machinist at Baldwin Locomotive Works in Philadelphia, a once-great company long gone from the landscape. My grandfather modeled the virtues of hard work and self-improvement. He was always challenging himself with new skills so that he could readily find work when necessary. Perhaps if Baldwin better prepared for major shifts in our country’s transportation trends then there might be Baldwin airplanes and trucks hauling freight across America.

MAY/JUNE 2017 | NEW JERSEY CPA

tural change, and owning skills on par with economic changes is the way to stay on track. Baldwin Locomotive believed trains would always be the major form of transportation moving people and products, but new entrants into the market passed them by. The CGMA was the way for me to gain essential skills and experiences to avoid extinction. Stephen F. McCarthy, CPA, CGMA, M.B.A., is the owner of The Presidents Forum and an adjunct professor in accounting at Kean University. He is a member of the NJCPA and can be reached at stevemccarthy@thepresidentsforum.com.

CGMA QUICK FACTS: yy Held by 150,000 accounting and finance professionals yy The most widely held management accounting designation in the world yy Rigorous education, exam and experience requirements yy Lifelong education and stringent code of ethical conduct Learn more at cgma.org/ aboutcgma.html

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FIRM & PRACTICE MANAGEMENT

Defending Against a Succession Planning Crisis JOSEPH A. TARASCO, ACCOUNTANTS ADVISORY GROUP, LLC

A succession crisis is occurring at public accounting firms across the country, driven by the vast numbers of Baby Boomer partners who will be retiring in droves over the next 10 years. Many CPA firms wish to remain independent, but few of them have completed and implemented formal plans to ensure their legacy. This crisis is the main reason the public accounting marketplace has become extremely competitive for quality professional talent at the partner level. Survival as an independent firm depends primarily on a firm’s ability to build a first-class team of talented partners who will make a positive and sustained contribution to retain a retiring partner’s clients and increase growth and profitability more effectively and more quickly than its rivals. A succession-driven talent war is also taking place for high-level staff positions (senior managers, managers, directors). The time to react to this marketplace crisis has become significantly shorter, especially for firms with predominantly Baby Boomer partners. Talented, creative and innovative professionals are in high demand for pivotal positions, not only to replace the “old guard” but also to deliver new services as traditional compliance services become more fee sensitive and professional staff compensation and benefits costs continue to rise. CONSIDER FLEXIBLE WORK ARRANGEMENTS Succession planning problems are compounded by the fact that many firms have an abysmal track record of retaining women through the partner levels, which has severely depleted the ranks of potential succession partners and leaders. However, more recently, contemporary approaches to flexible work arrangements (FWA) have been evolving. The new approaches are geared toward continuing the long-term careers of women in a customized fashion rather than just constructing ordinary FWAs geared toward job retention without a planned

MAY/JUNE 2017 | NEW JERSEY CPA

approach to the long-term aspects of a career as a partner. More firm leaders are realizing that clients may not be as opposed to an FWA with their engagement partner as traditionally thought. Thus, having a reduced and restructured roster of clients who are well served by an FWA partner can be a valuable component of client retention and a contribution to the firm’s succession planning strategy. The focus on partner FWAs should be geared more toward the career aspects of the arrangement aligned with the firm’s succession needs — not just month-to-month or day-to-day scheduling demands. KEY SUCCESSION PLANNING ISSUES TO CONSIDER Some of the issues to consider when developing a succession plan include the following: yy Succession planning needs to start from the top. Holding partners accountable for implementing the firm’s succession plan and compensating them accordingly is one key to the success of the plan. yy Reviewing and updating the succession plan at the annual partner meeting or retreat is not enough. A firm succession plan must be practiced daily and taken seriously by all the partners — young and old. Succession planning should be a topic that is managed and discussed at every partner meeting during the year. yy Recruiting and retaining the best entry-level and experienced professionals should be a top priority. yy Establishing formal staff career development programs, partner-in-training programs and mentoring programs is crucial to implementing a realistic succession plan. yy Establish a staff-centric culture, including a compensation and rewards program that retains your most talented professionals. yy Establish relationships and dialogues with smaller firms for possible merg-

er transactions in the future that will solidify a succession plan. Having a strategy to remain an independent firm is not good enough. Firms need to implement a succession plan that insures the transition of clients and leadership of the firm along with funding the future pay-outs to retired owners. Succession planning is not a program that should take place a few years before client service partners and/or leaders are about to retire. It should be an ongoing daily occurrence. Accounting firms and marketplaces are dynamic, so succession plans shouldn’t be static. Partners must embrace the reality that having the right professionals in place today and designated for the future, while recognizing that the future can arrive at any time, is an essential element of succession planning. With the proper structuring and planning, partner succession should be a seamless process and not a major event. Joseph A. Tarasco consults to CPA firms and is the president of Accountants Advisory Group, LLP. He is a member of the NJCPA Content Advisory Board and can be reached at joe@ accountantsadvisory.com.

READ MORE SUCCESSION PLANNING ARTICLES AND RESOURCES njcpa.org/topics/successionplanning

FORENSIC ACCOUNTING, LITIGATION SERVICES & BUSINESS VALUATION

Virtual Currency: Forensic Accounting Challenges and Valuation Considerations BY HOWARD KRIEGER, WITHUMSMITH+BROWN, PC

You’ve likely heard the buzz words “virtual currency,” “digital currency” or Bitcoin more frequently as of late. Digital currency, or digital money, is an Internet-based medium of exchange distinct from physical currency that exhibits properties similar to physical currencies, but allows for instantaneous transactions and borderless transfer of ownership. Bitcoin is a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds operating independently of a central bank. Users have “wallets” which are anonymous, unique account IDs that have virtual currency amounts associated with them. The virtual currency network self-regulates by giving all users a record of every transaction that has occurred between every wallet since inception. This is meant to minimize or eliminate cheating between wallets. It is this ability to screen out “cheaters” that is encouraging global banks to adopt forms of virtual currency logic to improve security around their millions of daily transactions. FORENSIC ACCOUNTING CHALLENGES From a forensic investigation standpoint, tracing virtual currency transactions can create challenges when applying traditional forensic accounting techniques. Virtual currency is a decentralized currency and few banking or credit institutions (currently) deal in this type of currency, so it is unlikely that bank or credit card statements exist for virtual currency transactions. A lack of documentation related to who owns the wallets and the purpose of each transaction creates traceability challenges. The existence of an unregulated, unaudited ledger begs the question of how transparent any given observable virtual ledger transaction really is. To investigate a specific transaction or set of transactions, the forensic specialist will need to not only have access to transaction information, but also have a way of mapping a wallet to

a particular person or institution. Additionally, the investigator will likely require skilled information technology specialists to sift through the reams of data. Tracing wallet transactions becomes more like tracing cash movement than tracing traditional electronic payment systems. In fact, the most reliable measure of virtual currency activity may only be the observed funding of the wallet and any transfers out of the wallet to a traditional currency account. Another consideration from a forensic accounting perspective is verifying if a transaction happened through a third party. While banks and credit card companies can be subpoenaed when dealing with traditional fiat currencies, the same does not hold true for virtual currencies. In a traditional setting, the forensic specialist can usually hold interviews with parties or subpoena the bank for account holder IDs. With virtual currencies, how does one determine if multiple wallets are actually held by non-exist persons or entities? VALUATION CONSIDERATIONS Valuation professionals face similar challenges around data verification when valuing virtual currency loans. If the two components of any valuation are a calculated benefit stream and an estimated risk of not receiving the benefit, then virtual currency loans can be of varying degrees of risk depending on how they are structured. The virtual currency lender can see the

balance of the virtual currency borrower’s wallet at all times. However, this offers little recourse to the lender, and only conditions and terms outside the virtual framework, like in traditional lending, can truly be enforced. Lastly, virtual currency fluctuations make market uncertainty a major factor to consider. Therefore, valuing a virtual currency credit agreement should look a lot like the valuation of an unsecured, risky foreign currency loan. Forensic accounting and valuation matters related to virtual currency can be performed using the tools used for traditional assets and liabilities. Practitioners can gain a foothold on this leading edge of finance as long as they are willing to handle the high degree of uncertainty and limited information available around transactions in this space. Howard Krieger is a senior manager and team leader for WithumSmith+Brown’s Corporate Value Consulting Group. He specializes in the valuation of residential/commercial real estate loans, alternative investments, heavy equipment leases, portfolio valuation, fixed income and complex financial instruments across a diverse industrial set. Howard can be reached at hkrieger@withum.com or 201265-2800.

READ MORE FORENSIC ACCOUNTING ARTICLES AND RESOURCES njcpa.org/topics/forensics

NEW JERSEY CPA | MAY/JUNE 2017

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NEW JERSEY CPA | MAY/JUNE 2017

PROFESSIONAL DEVELOPMENT

Take Your Career Personally BY SHAUNE SCUTELLARO, CPA, COHNREZNICK LLP

As most members of the accounting profession know all too well, advances in modern technology have done as much to connect us with family and friends as they have to tether us to client demands and late-night email responses. As your career progresses, the pressure of these demands only becomes stronger. So how can you take charge and ensure you have a rewarding and challenging career? Don’t let work affect your personal life; instead start taking your career personally! The traits that make you “you” outside of the office should be the foundation of your life inside the office as well. IT ALL STARTS WITH THE CPA LICENSE Taking charge of your career starts with understanding who you are and who you want to be, and then determining the tactics that are going to get you from point A to point B. In addition to getting your first job, passing the CPA exam should be a top priority if you want to have endless opportunities in the accounting profession. You can find a public accounting firm that feels like the right fit, search for a position in a private company within an industry that excites you, or hang your own shingle and become a sole practitioner. If any of those options sound appealing but you do not yet have the license, then get those books out, start studying and schedule your exams! From there, the list of career paths available to you in the public accounting arena is wide ranging — from tax professional, to IT auditor, to forensic accountant — and can suit all types of lifestyles. If your personality is so bright it can’t be contained by a cubicle, perhaps the travel and client contact on audit jobs is a good fit. Or if you are motivated by new challenges on a yearly or even monthly basis, a role in an advisory practice could be a better fit for you. GET FOCUSED If you have your CPA license and are currently working at a public accounting

MAY/JUNE 2017 | NEW JERSEY CPA

firm, differentiating yourself from your peers can be as easy as reflecting on your personal interests. There are limitless industries, niches and areas of focus that all have unique accounting challenges. Do you like to keep up with the latest tech trends? Think about getting involved in the start-up community. Do you enjoy learning about new cultures and working with people in different countries or languages? Consider becoming an expat expert. Infusing your personal life into your business pursuits will enable you to build the industry expertise that you’ll need to make your mark. BUILD YOUR NETWORK If you are not the type of person that can work a cold room at in-person events, then find new ways to get your name out there. Perhaps you are a showman and feel comfortable speaking for trade associations or networking groups; or if you have a great social media presence you can leverage that to create more personal connections that drive business and help expand your network. There are times that we all need to get out of our comfort zone to meet new people, but once you find the method that works for you, sharpen those skills and get out there.

FIND A MENTOR How do you bring everything together and advance up the career ladder to manager or partner? Identify a professional mentor. A mentor who provides open lines of communication and honest feedback can give you the confidence to make good decisions and help you identify areas for improvement. I have been lucky enough to have a mentor who has helped prepare me for what’s expected of me as a manager and what will hopefully be expected of me as a partner. Successful professionals are often looking to give back by connecting with the next generation of young leaders, so finding a willing mentor may be easier than you think. Building a career often means the lines between your work and personal life will start to blur, but that can be a good thing. The more your career starts to reflect the traits that make you exceptional, the easier it will be to make an impact in your community and in your organization. Shaune Scutellaro, CPA, is a senior manager with CohnReznick LLP. He is the leader of the NJCPA Federal Taxation Interest Group, a member of the Content Advisory Board and will be a 2017/18 NJCPA Trustee. Shaune can be reached at shaune. scutellaro@cohnreznick.com.

TAX

Deciphering New Jersey’s Angel Investor Tax Credit BY RALPH LOGGIA, CPA, MAZARS USA LLP

The Angel Investor Tax Credit provides for a tax credit of up to 10 percent of a qualified investment in New Jersey emerging technology companies as long as certain qualifications are met. Sounds like a great investment, right? Well, let’s find out how much of an “angel” this credit actually is. A qualifying company must meet the following criteria: yy Have fewer than 225 full-time employees, at least 75 percent of whom work at least 80 percent of the time in New Jersey. yy Do business, employ or own capital or property, or maintain an office in New Jersey. yy Conduct at least one of the following activities: yy Incur qualified research expenses in New Jersey. yy Conduct pilot-scale manufacturing in New jersey. yy Commercialize one or more of the following eligible technologies in New Jersey: advanced computing, advanced materials, biotechnology, electronic devices, information technology, life sciences, medical devices, mobile communications or renewable energy technology. New Jersey will refund the credit to an individual taxpayer. A corporate taxpayer can choose to either receive a refund or carry over the excess credit for 15 years. Investors do not need to be New Jersey residents, but total investor ownership of the business must be less than 80 percent. The New Jersey Economic Development Authority (EDA), in consultation with the director of the New Jersey Division of Taxation, will approve taxpayer applications for the credit. There is a $25 million annual cap on all credits that the EDA will approve, and the credits are limited to $500,000 per investment. The application for this credit is completed online at njeda.com. The NJ-1040 tax return form does not provide a line to claim the credit. Once the tax return is filed, a copy of the return,

along with the original New Jersey Angel Investor Tax Credit Program Certificate, must be sent to the New Jersey Division of Taxation GIT Audit Branch Unit. A non-refundable credit application fee is applied as follows: yy $500 for investment amounts of $50,000 or less yy $1,000 for investment amounts over $50,000 Also, there is an approval fee for qualified investments over $50,000. This fee is 5 percent of the amount of the tax credit or $2,500, whichever is greater. The application fee is credited toward the approval fee. In addition, for individual investors, when the credit is approved, the taxpayer will receive cash. For IRS purposes, this is considered taxable income. Let’s take a look at a taxpayer who is in the top tax bracket and invests $60,000 into a qualifying New Jersey emerging technology company which qualifies for the Angel Investor Tax Credit. The taxpayer will receive a $6,000 credit (10 percent of the investment) and pay fees of $2,500 (application fee of $1,000 and an approval fee of $1,500). In addition, the $6,000 would be considered taxable income on the taxpayer’s federal income tax return. Assuming a federal tax rate of 40 percent, the tax would be $2,400. The net benefit of the 10-percent credit from the $60,000

investment is $1,100 ($6,000-$2,500$2,400). The 10-percent credit in this example actually becomes only 1.8 percent ($1,100/$60,000). Perhaps you are wondering why the full $6,000 is subject to federal income tax and not $3,500, which is the refund net of the $2,500 fee. Section 1012 of the IRC generally provides that the tax basis of property is the cost of the property. The regulation under this section defines cost as the amount paid in cash or other property. Since the state tax credit is obtained by complying with state law and is not acquired by purchase, the original recipient generally has no tax basis in the credit. It’s important to help clients understand the full benefits/requirements of the Angel Investor Tax Credit as part of providing the value-added services of a trusted advisor. Ralph Loggia, CPA, MST, is a senior tax manager with Mazars USA LLP. He is a member of the NJCPA State Taxation and Federation Taxation interest groups and can be reached at ralph.loggia@ mazarsusa.com.

READ MORE STATE TAX ARTICLES AND RESOURCES njcpa.org/topics/statetax

NEW JERSEY CPA | MAY/JUNE 2017

TECHNOLOGY & INFORMATION MANAGEMENT

Creating a Disaster Plan to Ensure Your Company’s Security BY PAUL C. URSICH, CPA, AND ROBERT RISK, WISS & COMPANY LLP

When it comes to defending your enterprise from undefined catastrophes, traditional disaster recovery tactics are no longer adequate. If cyber terrorists seize your company’s critical information, or if human error or natural disasters erase your company’s data, your resources cannot be swiftly returned by outdated recovery methods. To sustain your company’s position in a combative marketplace, it is vital to form a modernized disaster planning solution customized to fit your needs. By using judicious, solid components of recovery, such as business continuity planning (BCP), disaster recovery (DR) and penetration testing, your business can diminish losses and emerge from misfortunes relatively unharmed and ready to persevere. There are comprehensive steps to devising and enacting a suitable disaster plan. The following points outline the roadmap to ensuring your company’s security: 1. BUSINESS CONTINUITY PLANNING From minor to catastrophic adversities, businesses can face myriad inconveniences in their lifetime. Fortunately, BCP can assist companies in marching forward and continuing operations through hardship. A solid BCP should include a cyber insurance review. Cyber insurance helps businesses mitigate the risk of a data breach or network security failure. The method encompasses steps such as singularizing latent threats, determining the extent of these threats, employing precautions and measures aimed to mitigate said risks, testing defenses, and redesigning the formation to confirm it is up-to-date with the latest features and components. However, it is important to note that although BCP can help a company prolong business-as-usual when confronting common misfortunes like fires or floods, the strategy is not as valuable if the disaster affects a hefty sum of the populace, such as a disease outbreak. One example would be

MAY/JUNE 2017 | NEW JERSEY CPA

a finance establishment that backs up its data offsite. If something were to happen to their headquarters, satellite offices would be able to retrieve vital information and help the business to continue to operate. 2. DISASTER RECOVERY To shield businesses from sweeping catastrophes, disaster recovery efforts can assist in the recovery of an organization’s software, hardware and data, as well as the recommence of standard, critical business functions. As a slice of BCP, disaster recovery plans consist of calculated and extensive planning, assessment and possibly an isolated site for restoring corporate operations. Moreover, though the majority of DR planning concentrates on recovery of data, companies must recognize the multifaceted prospects of disasters, such as illnesses that can wipe out staffing, and consider them when designing a DR plan. The plan must be inclusive and understood by key staff members so they can act accordingly when a disaster strikes. It should also be updated when staff join or leave the team, a new branch office opens, or new software or hardware is added. 3. PENETRATION TESTING An effective weapon against any disaster that crosses your company’s path is the execution of a penetration test. This effort can proficiently gauge the security of your IT infrastructure by carefully attempting to unearth any vulnerabilities. These weaknesses may subsist in operating systems, service and application faults, unfitting

configurations, or perilous end-user behavior. Such examinations are also advantageous in authenticating the efficacy of defensive appliances as well as end-user observance to security procedures. The swift stride of change in the industry, coupled with the menace of information loss in small or massive data platforms, elevates the importance of augmenting protection against malintent or disasters. Since catastrophes materialize in a variety of forms, your company must have a vigorous and well-tested disaster plan equipped to safeguard your business and its resources. Disaster planning commands a novel way of thinking, where businesses can take advantage of fresh technologies that can maintain pace with data evolution and the preservation of valuable information from unforeseen setbacks. Paul C. Ursich, CPA, is the director of business advisory services for Wiss & Company LLP. He reviews accounting processes and procedures and implements strategies and technologies to increase overall efficiency for clients. Paul is a member of the NJCPA and can be reached at pursich@wiss.com. Robert Risk is the director of technology advisory services at Wiss where he specializes in strategic business decisions, system implementations and aligning information technology with organizational goals. Bob can be reached at rrisk@wiss.com.

READ MORE TECHNOLOGY PLANNING ARTICLES AND RESOURCES njcpa.org/topics/technologyplanning

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NJCPA NEWS

2017/18 NJCPA Board of Trustees The following NJCPA members will be serving on the Board of Trustees June 1, 2017, through May 31, 2018.

EXECUTIVE COMMITTEE

PRESIDENT

PRESIDENT-ELECT

SECRETARY

EDWARD I. GUTTENPLAN, CPA, CGMA

SARAH KROM, CPA

Wilkin & Guttenplan, P.C.

SKC and Co., CPAs, LLC

MICHAEL VANDERGOOT, CPA, CGMA

TREASURER

IMMEDIATE PAST PRESIDENT

CEO & EXECUTIVE DIRECTOR

HARRY P. WILLS III, CPA

WALTER J. BRASCH, CPA, CGMA

RALPH ALBERT THOMAS, CGMA

Bowman & Company LLP

PKF Oâ&#x20AC;&#x2122;Connor Davies, LLP

NJCPA

BDO USA, LLP

To learn more about our Executive Committee members, visit njcpa.org/about/board. 26

MAY/JUNE 2017 | NEW JERSEY CPA

BOARD OF TRUSTEES

JEAN I. ABBOTT, CPA

JORDAN D. AMIN, CPA

GREGORY A. BEDARD, CPA, CGMA

AMY Y. BOTH, CPA

Stockton University

EisnerAmper LLP

Prudential Financial

Neral & Company, P.A.

ROBERT J. BROWN JR., CPA

MELANIE COBB, CPA, CGMA

CAROL DONATIELLO IOCCA, CPA

ROY H. KVALO, CPA, CGMA

Cowan, Gunteski & Co., P.A.

Abacus Financial LLC

Wilkin & Guttenplan, P.C.

The Curchin Group, LLC

STEPHEN O. RICHARD, CPA, CGMA

MEGAN A. SARTOR, CPA

SHAUNE SCUTELLARO, CPA

KYLE M. SELL, CPA

Becton Dickinson & Company

Sax LLP

CohnReznick LLP

Deloitte

NEW JERSEY CPA | MAY/JUNE 2017

NJCPA NEWS

NJCPA Proposes Bylaws Changes The NJCPA is asking members to vote on proposed changes to the NJCPA Bylaws. The vote will take place May 15 through June 9. The proposed changes include the following: yy Expansion of the Associate member category to include a broader category of non-CPA financial professionals yy Changes to the qualifications for Student membership yy Removal of the Life and Honorary member categories yy Minor modifications to the structures of some standing committees and appointed committees To view all of the proposed changes and find out more about the voting process, visit njcpa.org/bylawsvote.

9 Reasons to Renew Your NJCPA Membership Members have various reasons for renewing their NJCPA membership, but what does your membership actually mean to YOU and how does it affect your career and your business? Here is list of nine reasons to renew. Is your reason below or is it number ten? 1. Get answers to technical questions. Quickly get an answer on the Connect Open Forum (njcpa.org/connect). 2. Organize all of your CPE credits. Be prepared for the end of the New Jersey triennial with access to the NJCPA CPE Tracker (njcpa.org/ cpetracker). You can download certificates and record credits from courses taken from other providers. 3. Have a voice in Trenton. Find out up-to-the-minute details about the NJCPAâ&#x20AC;&#x2122;s advocacy efforts online (njcpa.org/advocacy) and via NJCPA Pulse and New Jersey CPA.

MAY/JUNE 2017 | NEW JERSEY CPA

4. Access quality, low-cost CPE that is applicable to your specialization. Easily register for a local CPE course or webinar at njcpa.org/events. 5. Boost your leadership and communication skills. Volunteer (njcpa.org/volunteer) for a NJCPA committee, chapter position or short-term opportunity and add it to your resume. 6. Get assistance with complicated licensing issues. Contact the NJCPA (973-226-4494 or membership@ njcpa.org) to receive guidance about New Jersey State Board of Accountancy regulations. 7. Prepare for the CPA exam. Receive discounts on an exam review course (njcpa.org/cpaexam) and interact with other young professionals who are preparing for the CPA exam and licensure.

8. Save on business products and services. Find professional and personal product discounts through the Member Benefits Marketplace (njcpa.org/marketplace). 9. Advance your career. Post your resume and review job postings on the NJCPA job bank (njcpa.org/jobs). Your NJCPA membership means being part of an organization that supports its more than 14,500 members in fulfilling their professional responsibilities and achieving success through leadership, education, networking and community involvement initiatives. Renew your NJCPA membership today at njcpa.org/renew. Not a member? Learn more about the NJCPA and join at njcpa.org/join.

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NJCPA NEWS

NJCPA Awards $400,000 in Scholarships The NJCPA Scholarship Fund continues its long history of supporting the next generation of accounting professionals, awarding more than $400,000 in scholarships to New Jersey college students and high school seniors entering college in fall 2017. Awards were presented at the Scholarship Awards Ceremony in April. Fifteen four-year awards of $7,000 each were presented along with 40 one-year awards of $6,000 each. The Atlantic/Cape May, Bergen and Mercer chapters also presented 24 awards in varying sums to local students. This program would not be

possible without the generous support of NJCPA members, our 11 local chapters and firm benefactors. CHAPTER AND FIRM BENEFACTORS yy Bowman & Company LLP — In Memory of Lisa A. Donahue yy CohnReznick LLP yy EisnerAmper LLC yy Frazer Evangelista & Company, LLC yy Mazars USA LLP yy Monmouth/Ocean Chapter — In Memory of Joseph D. Leone Jr.

yy Passaic County Chapter — In Memory of Benjamin Botwick yy Passaic County Chapter — In Memory of Morris Merker yy PKF O’Connor Davies — In Memory of Stephen F. Manuzza yy Smolin Lupin yy Untract Early LLC yy Wilkin & Gutenplan, P.C. — In Memory of Jules Frankel yy WithumSmith+Brown For the list of scholarship winners, visit njcpa.org/scholarship.

Boost Your Career with an NJCPA Leadership Appointment More than 2,000 NJCPA members are building their career profiles by volunteering as interest group and chapter members, speakers, authors, legislative influencers, food drive organizers, college ambassadors and more. Volunteering with the NJCPA impacts the profession and New Jersey communities. In addition to supporting a cause you love, you can lead the way when you accept an NJCPA leadership appointment. NJCPA leaders work to further the NJCPA mission, pillars and strategic initiatives. Approximately 100 members serve in leadership roles each year as chairs/leaders, vice chairs/leaders, officers, board members and advisory committee members. Opportunities include the following: yy Lead a technical interest group. Provide feedback on professional issues, build community and provide educational resources to increase the core competencies of the members within a specialty area. yy Serve on a chapter board of directors. Meet your CPA neighbors and help manage the business affairs of your chapter while you grow your influence and standing in your local community. yy Chair or serve on an advisory or governance committee. NJCPA

MAY/JUNE 2017 | NEW JERSEY CPA

advisory and governance committees complement the effectiveness of the Board of Trustees as they work to carry out a specific initiative. For example, the Investment Committee develops and periodically reviews investment policies, objectives and guidelines for the NJCPA and its related entities. yy Serve on the board of the NJCPA, NJCPA Education Foundation, NJCPA Scholarship Fund or NJ-CPA-PAC. Help steer the NJCPA

and its entities towards the future, advancing their effectiveness and sustainability. Apply now through July to be considered for 2018/19 leadership positions. Complete your volunteer profile online at njcpa.org/getinvolved. Select “Leadership” in the “What kind of involvement interests you?” filter to see a complete list of opportunities, and select how you want to be a leader in the NJCPA.

CLASSIFIEDS

ADVERTISERS INDEX 13 ACCOUNTING PRACTICE SALES accountingpracticesales.com 15 ADP adp.com/njcpa 21, 25 CAPSTAN TAX capstantax.com 21 EXCHANGE AUTHORITY exchangeauthority.com C4 FAIRLEIGH DICKINSON UNIVERSITY SILBERMAN COLLEGE OF BUSINESS fdu.edu/tax C2 HENDERSON HARBOR GROUP hendersonharbor.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. 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. Morris Merker and Company, LLC, a peer reviewed CPA firm in Passaic County, is seeking to acquire/merge with retirement-minded CPA practitioners. Reply in confidence to jpetrella@mmccpanj.com. CPA/ABV looking for association with Monmouth/Ocean County firm with future merger/acquisition. 400k+ non-tax practice, in business since 1981. File No. 1291

25 INVESTORS BANK myinvestorsbank.com 7, 21 NAPLIA PROFESSIONAL LIABILITY INSURANCE naplia.com 3 PENNSYLVANIA DEPARTMENT OF REVENUE backtax.pa.gov 9 PLYMOUTH ROCK ASSURANCE njcpaquote.com 17 PROVIDENT BANK provident.bank 29 ROWAN UNIVERSITY ROHRER COLLEGE OF BUSINESS rowanu.com/business C3 RUTGERS SCHOOL OF BUSINESS-CAMDEN pmst.camden.rutgers.edu 15 TD BANK tdbank.com/smallbusiness

CLASSIFIED ADVERTISING

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 | MAY/JUNE 2017

MEMBER STORY

for most people is to recognize whether the individual giving them financial advice is held to the higher fiduciary standard. Are they held to a standard that says they have to put your interests first?” Diahann asks.

BY KATHLEEN HOFFELDER, NJCPA CONTENT EDITOR

IN IT FOR THE LONG HAUL From the start, Diahann and Clare encouraged clients to take a long-term view of their financial needs, regularly asking themselves, “Where do I want to be next year and in five years, and what do I have to do to get there?” Clients seem to respond to that kind of thinking. “Evaluating a client’s financial well-being is part of a whole package. It’s not just about money, it’s about life choices,” Diahann says. “Financial planning may initially be viewed as just investing but should be integrated with the overall wealth management service offered,” she says. Proud that the firm still has its first client who signed over 30 years ago, she adds, “That’s the thing that keeps you going in this business. You can really see the impact you’ve had on clients’ lives.”

Diahann W. Lassus, CFP®, CPA, PFS, was in charge of AT&T’s customer service operation in New Orleans when she was approached by Clare E. Wherley, CPA, CFP®, then a director at AT&T, to run the Olympic Field Operations Team in Los Angeles in 1984. AT&T was sponsoring the 1984 Olympics and wanted key people to run the project and build the team. Diahann was a natural fit — she was one of the few women in management at AT&T with a technical background. She was loaned to the project in December, 1983, charged with building the Olympic Field Operations and Technical forces. Nine months later, the project pulled off one of the greatest telecommunications wonders of the world at that time. Diahann had 700 people scattered over all the Olympic venues, many on a three-shift basis. They operated and maintained the telephone systems and computer terminals and assisted athletes and others in using the equipment. “It was certainly one of the great learning experiences in my career,” Diahann says.

HELPING OTHERS Giving back to the community is also a big part of Lassus Wherley’s service to clients. Over the years, the firm has supported more than 100 charitable organizations, those of its own choosing and those of its clients. They put considerable time and effort into determining which organizations should receive funds, volunteer hours or some combination. “We have a tough time every year. So many of the organizations do so much good that it’s really hard to choose where to allocate dollars, both from the firm and personally,” says Diahann, who, as an avid women’s sports fan, admits some favoritism in personally supporting Florida State University’s women’s basketball, volleyball, soccer and softball. In keeping with her love of sports, it turns out Los Angeles wouldn’t be Diahann’s last opportunity to impact the Olympic Games. At the 2012 London Olympics, she participated in a panel discussion on economic sustainability sponsored by Rutgers Business School’s Thought Leadership Program.

From Olympic Organizer to Wealth Manager

MAY/JUNE 2017 | NEW JERSEY CPA

When Diahann returned a year later, she felt as if the world had changed. “The Olympic experience was pretty incredible. We were operating 24/7 with people spread all over southern California reporting into me, running an organization that was larger than anything I had ever run in a normal job,” she says. Shortly after returning, Diahann began thinking about a different career path. Diahann and Clare, co-founders and president and CEO, respectively, opened the doors of Lassus Wherley in 1985 and later opened a second office in southwest Florida. While managing a wealth management firm is different than running an Olympic project, Diahann realized some of the same management skills still applied. “The biggest challenge is in hiring the right people and then trusting them to do their jobs,” she says. To set themselves apart from the myriad advisory firms out there, they decided to offer a fee-only structure, where Lassus Wherley would only be paid for the services offered, never on a commission basis or via a third party. “The challenge

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