CPA Report Q4 2013

CPA Report Four th Edi tion 2 0 1 3

South Carolina Association of Certified Public Accountants

Special Risk Section n We Interrupt This Program!

n The Basics of Enterprise Risk Management n Corporate Tax Compliance n Can the Cloud Help Your Firm?

Plus...

SCDOR Updates SCACPA

Peer Review Billing Changes

2013 Scholarship Winners

Charleston

2430 Mall Drive, Suite 360

Greenville

843-884-3912

Charleston, SC 29406

864-245-8788

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South Carolina CPA Report

www.american-pensions.com

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CPA Report South Carolina Association of CPAs

South Carolina Association of Certified Public Accountants Magazine Volume 43, Fourth Edition 2013 Officers Sharon E. Mann, CPA, Chair John B. Fennell, CPA, Chair Elect Robert M. Tilton, CPA, Vice Chair Penny Lewis, CPA, Secretary – Treasurer Michael R. Putich, CPA, Immediate Past Chair BOARD OF DIRECTORS William R. Barefoot, CPA Patrick P. Carey Jr., CPA Zoe M. Davis, CPA Amanda (Mandy) T. Hallman, CPA Suzanne M. Harnois, CPA Lesley H. Kelly, CPA Cheryl O. Lang, CPA A.D. (Dave) Masters, CPA J. Patrick (Pat) McDermott, CPA James W. McIlrath, CPA Kenneth L. Newhouse Jr., CPA Philip R. Snipes, CPA Jason C. Sweatt, CPA William A. Thiem, CPA Beth T. Zamorski, CPA CHIEF EXECUTIVE OFFICER Erin Hardwick Pate, CAE MANAGING EDITOR Maureen Taylor GRAPHIC DESIGNER Lisa S. McGee Contributing writers Timothy L. Baker, CPA, CGMA Melissa Barbour, CPA Reva Brennan, MPA, CAE, IOM Donald H. Burkett, CPA Amanda Colgate, CPA J. Bratton Fennell, CPA Cynthia Johnson, CPA Randy Johnston Sharon E. Mann, CPA, CGMA Erin Pate, CAE Maureen Taylor Donald P. West, CPA, CITP, eCPPT 2013 Editorial Board Charles E. Alvis, CPA, MPA, MBA, Chair Tim Baker, CPA John B. Brantley, CPA Robert Charles, CPA Amanda S. Colgate, CPA Lisa S. Cooke, CPA Lesley H. Kelly, CPA Margaret L. Lattimore, CPA A. D. “Dave” Masters, CPA Erin Hardwick Pate, CAE Derrick B. Stark, CPA

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Special Section: Risk 19

We Interrupt This Program!

22

Can the Cloud Help Your Firm?

24

Corporate Tax Compliance

26

The Basics of Enterprise Risk Management

28

The Risks of Telecommuting

In This Issue 11

Board of Accountancy Update

12

2013 Scholarship Winners

13

Thank You to Our Educational Fund Donors

14

YCPAs Enhance Managerial, Leadership Skills at Conference

16

SCDOR Updates SCACPA on Latest Developments

29

Peer Review Billing Changes

33

PIUs Draw Over 1100 SCACPA Members

In Every Issue 5 6 8 30

From the Chair Association News On Your Behalf Member News

31 32 34 38

Welcome New Members Chapter Connections Upcoming CPE Advertiser Index

Statements of fact and opinion are made by the authors alone and do not imply an opinion on the part of the officers or members of SCACPA. Advertising rates will be furnished on request to SCACPA, 570 Chris Drive, West Columbia, SC 29169, (803) 791-4181. Publication of an advertisement in The CPA Report does not constitute an endorsement of the product or service by The CPA Report or SCACPA. South Carolina CPA Report

3

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E-10373-813 SC

From the Chair “I’m often surprised to find out that employers are not checking or do not know the federal guidelines.”

Sharon Mann, CPA, CGMA SCACPA Chair SCACPA member since 1992

Mitigating Risk with New Hires As you can probably tell if you’ve had a chance to look at the articles featured in this issue of the CPA Report, our focus is on risk. When I found out this would be our focus I thought great, this is something I can speak to from an employer standpoint as that is what our business focuses on for our customers, minimizing their risk of exposure from their hiring decisions.

You may say, “Okay, I know there could be some risk,” or you may think there is none at all. After all, surely your clients are checking out the people they hire. I’m often surprised to find out that employers are not checking or do not know the federal guidelines.

For example, are they verifying that the person is eligible to work in

the United States? Hopefully, the employer is checking the employee’s Form I-9 in the E-Verify system to make sure that they are eligible.

This free Internet-based system can be accessed at the Department of Labor, Licensing and Regulation’s website in the immigrant worker compliance section.

We have found that employers usually screen their employee’s before hiring to either reduce the risk of theft, especially in the retail arena, to reduce the risk of harm to fellow employees or customers, or to make sure they have the proper credentials for the job they are to perform.

They do this in various ways either by checking prior employment, verifying education, checking for criminal records, drug screening,

verifying credentials, driving records, etc. An interesting statistic from our review for our clients is that when we run searches for criminal records we find a hit ratio of 14 percent enterprise wide. Industries such as retail, manufacturing and staffing run higher at 18 percent while white collar positions, such as insurance agents, run much lower.

This is information you may want to share with your clients to ensure they are mitigating their risk when they are looking to bring on a new employee. n

Sharon Mann is the chief financial officer for General Information Services, Inc. in Chapin. She has served on the SCACPA board since 2007 and currently serves as chair. She previously served on the Legislative, Advocacy & Regulatory Committee, the Finance Committee and the Audit Committee.

“ An interesting statistic from our review for our clients is that when we run searches for criminal records we find a hit ratio of 14 percent enterprise wide.”

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South Carolina CPA Report

5

Annual Business Meeting Change Due to the change in SCACPA’s fiscal year, the Annual Business Meeting will not be held in conjunction with the 2013 Annual Summit in November. The meeting will take place in May 2014. Details will follow.

SCACPA Seeks Centennial Publication Editor The S.C. Association of CPAs will celebrate its 100th anniversary in 2015!

As part of this yearlong celebration SCACPA will release a publication that highlights major accomplishments over the 100 years. A good historical record of the first 75 years already exists, however, we are seeking an editor who can compile and write up the achievements over the past 25 years and assist in publishing a full comprehensive 100 year retrospective of the profession in South Carolina. SCACPA wishes to contract with an editor to spearhead this project.

Interested parties should email Erin Pate, SCACPA CEO at epate@scacpa.org

Promoting the Profession

SCACPA Speaks to Future CPAs YCPA Leadership Cabinet member Erica Dawgert, of Pure Barre in Spartanburg, and SCACPA’s Maureen Taylor spoke to Coastal Carolina's Beta Alpha Psi Chapter recently. Approximately 20 students turned out to hear about the association and trends in the profession. Dawgert, a Coastal Carolina graduate, shared her journey to becoming a CPA and her experience in public accounting, industry and government. The good news for the profession - well over half of the students intend to sit for the CPA exam.

Brenda Jackson Q3 CPE Drawing Winner Congratulations to Brenda Jackson with Kenneth Cobb & Company, PC in Mullins winner of the quarterly CPE evaluation drawing. Remember, every time you complete a CPE evaluation you are helping design your education for the coming year. Plus, you earn a chance to win a $50 gift card. Drawings will be held quarterly. The more evaluations you complete, the greater your chances.

IRS VCSP Ends Dec. 31 The IRS’ Voluntary Classification Settlement Program (VCSP) ends on Dec. 31. The program provides an opportunity for taxpayers (employers) to reclassify their workers as employees for employment tax purposes for future tax periods with partial relief from federal employment taxes. In fact, an employer can do this reclassification for just 10 percent of what they would owe if they did this outside of this program.

CLICK

Visit IRS.GOV to learn more.

Support the Educational Fund Don’t forget to make your tax deductible contribution to the SCACPA Educational Fund, Inc. Invest in the future of the CPA profession with a gift to the SCACPA Educational Fund to inspire the best and brightest S.C. students to pursue a career as a CPA.

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South Carolina CPA Report

(888) 557-4814 | www.scacpa.org

Educational Fund Trustees Update The Educational Fund Trustees would like to thank Chuck Talbert for his five years of service and dedication to the SCACPA Educational Fund, Inc. and welcome Valerie Rumbough as she begins her new term as a trustee. The trustees would also like to recognize and thank Jimmy Burkett, CPA, for his service as an On Campus Champion and the many years of guidance and education he provided to the accounting students at the University of South Carolina.

Notify the BOA of Firm Changes SCACPA often receives inquiries from members concerning firm changes including location of offices. Following is the S.C. Board of Accountancy requirement: SECTION 40 2 40. Grant or renewal of registration to practice as firm; qualifications for registration; changes in identities of partners or officers.

H. Each holder of or applicant for a registration issued pursuant to this section shall notify the board in writing, within thirty days after its occurrence, of any change in the identities of partners, officers, shareholders, members, or managers whose principal place of business is in this State, any change in the number or location of offices within this State, any change in the identity of the licensee in charge of these offices, and any issuance, denial, revocation, or suspension of a registration by any other state.

Dixon Hughes Goodman Gives Back with Count the Cans Dixon Hughes Goodman LLP, the largest CPA firm headquartered in the Southern United States, recently donated 559,973 pounds of food to the communities in which it serves in 11 states across the firm’s footprint.

This amount include 35,548 cans of tuna and 259,540 jars of peanut butter, the most requested items sought during the busy summer months when children are not in school and do not benefit from From left: DHG interns Josh Binsz, Victoria school-provided lunches. The second Garrett and Joe Graver in front of the annual Count the Cans food drive was Greenville office’s Count the Cans display. held from June 14-24 and focused on collecting monetary and non-perishable food donations in an effort to alleviate the suffering of the one out of every six Americans who struggle with hunger.

As part of Dixon Hughes Goodman’s GIVES (Go. Invest. Volunteer. Engage.

Serve.) Initiative, the firm’s multiple offices join together once a year to support a collective cause that will directly impact the communities in which it is located.

(888) 557-4814 | www.scacpa.org

SCACPA

570 Chris Drive, West Columbia, South Carolina 29169 (803) 791-4181 or Toll-free (888) 557-4814 Fax (803) 791-4196 | www.SCACPA.org

To empower our members to grow professionally.

We believe that by providing education, advocacy, communication, and leadership we will ensure our success.

Erin Hardwick Pate, CAE Chief Executive Officer Ext. 104, epate@scacpa.org Reva E. Brennan, MPA, CAE, IOM Chief Operating Officer Ext. 103, rbrennan@scacpa.org Karen M. Hancock, CPA Finance Director Ext. 108, khancock@scacpa.org Maureen Taylor Marketing and Member Services Director Ext. 105, mtaylor@scacpa.org Glenna P. Osier Peer Review Manager Ext. 107, gosier@scacpa.org April C. Cox Education Manager Ext. 110, acox@scacpa.org Sandra P. Oxner, CMP, CMMM Chapter & Special Events Manager Ext. 112, soxner@scacpa.org

South Carolina CPA Report

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On Your Behalf For the profession, by the profession – that’s what the South Carolina Association of CPAs is all about.

SCACPA’s board of directors, committees and task forces, and Young CPAs Leadership Cabinet are hard at work making decisions, providing guidance and embarking on projects and programs that strengthen the profession and enable members to improve their knowledge, network and technical skills.

SCACPA Board Holds Planning Session Annually, the SCACPA Board of Directors holds a planning session to review its strategic plan and make plans for the next 12-18 months. Board members this year were asked to read The Road to Relevance: Five Strategies for Competitive Associations, a book designed to help membership-based organizations continue to be relevant to their members and potential members.

The board also reviewed the strategic plan that includes five goals that guide the work of the organization, the board and the staff. The goals are:

South Carolina Enabling Our Members to Deliver SCACPA will continually look for ways to meet the professional development needs of members. We will work to offer more high quality CPE more conveniently to members across the state. As part of this goal, SCACPA will be looking to develop more local faculty and seminar leaders, offer more locally generated content, and offer this in a live classroom setting as well as via the web.

(If you’re interested in being considered as a SCACPA faculty member or seminar leader, please email Reva Brennan, rbrennan@scacpa.org)

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South Carolina CPA Report

Achieving Excellence in Association Governance & Structure The world of the CPA, CPA firms and businesses has changed exponentially in recent years; adaptation to change and organizational nimbleness is important to survival. Many of the organizational structures that guide SCACPA’s work and effectiveness are rooted in decades of history and tradition.

The SCACPA Board of Directors has implemented some organizational changes that will foster a culture that is more future-focused and responsive to member needs.

Protecting the Public The foundational principle upon which SCACPA was founded nearly 100 years ago was advocacy for the profession. To this day, SCACPA makes advocacy a major priority. We continue to grow in our ability to protect the practicing CPA and the profession by setting annual priorities and by increasing the number of CPAs involved as Key Contacts and donors to the CPA-PAC.

4

Driving Market to Members

Members frequently tell us that an important role SCACPA should play is increasing the visibility of the CPA brand in the public sphere. Our ability to be effective in this area begins with developing an internal capacity to deliver the messages.

As a member you will begin to see stronger and better communications from SCACPA along with tools you can use to differentiate your brand.

CPA Strengthening our Membership The future of the profession lies in the hands of the younger CPA. We are working to build a sustainable community of value within SCACPA for all CPAs, but especially the younger professional, CPA candidates and students. A new curriculum is being developed for the Young CPA Leadership Cabinet while the outreach program for students is being revitalized.

(888) 557-4814 | www.scacpa.org

Legislative, Regulatory and Advocacy Update The Legislative, Advocacy and Regulatory Committee (LARC) met Sept. 27 to begin planning for the 2014 legislative session. Some of the items discussed include: u House bill 3459: Increasing the S.C. Board of Accountancy’s (SCBOA) ability to meet their mission of protecting the public and profession.

This bill, introduced in January, did not pass in the 2013 legislative session, but will carry over to the 2014 session. There are six changes within this bill, and in summary they are:

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Membership Privilege provided by SCACPA

1. Dedicating a full-time administrator who is a licensed CPA to the SCBOA 2. Allowing the SCBOA to conduct periodic inspections only following a three-day notification

$46.00 Mo. Non Member - $79 Mo.

Call or Text 855.647.8326 Membership Privilege for your CPA Society’s Privilege

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3. Exempting CPAs from licensure requirements of private security and investigation agencies

(Non Member - $79 Mo).

4. Investigations must be conducted by an inspector who is a licensed CPA 5. The S.C. Department of Labor Licensing and Regulation must post an annual report related to the number of complaints received, the number of investigations initiated, the average length of investigations, and the number of investigations that exceeded 150 days 6. Accounting practitioners will be able to reinstate their licenses (a technical correction) u Tax conformity legislation: Once this annual legislation is approved by the legislature and governor, tax professionals have certainty about the rules. SCACPA will work to pass this legislation early in the calendar year. n Erin Hardwick Pate, CAE, has served as SCACPA’s CEO since 2005. She currently serves as president of the CPA Society Executives Association, a member of the S.C. Secretary of State’s Nonprofit Advisory Council and Francis Marion University Advisory Council for the Non-Profit Leadership Institute.

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South Carolina CPA Report

9

Board of Accountancy

South Carolina Board of Accountancy Update

Financial Reporting Framework (FRF) for Small and Medium-Sized Entities (SMEs) and Continuing Professional Education Requirements

by Donny Burkett, CPA SCACPA member since 1976

M

any of us agree that the AICPA seeks to support and enhance practice areas that are significant to the public’s reliance on our skills and services.

Currently, the AICPA has launched a project called the Financial Reporting Framework (FRF) for Small and Medium-Sized Entities (SMEs). The South Carolina board of Accountancy (BOA) devoted time on its Aug. 19 meeting agenda to discuss this issue.

During the meeting, SCACPA CEO Erin Pate and Board Chair Sharon Mann explained the association’s position and confirmed that SCACPA supports FRF for SMEs and wants the marketplace to determine its success or failure.

They suggested that in today’s changing environment, SMEs are in need of services beyond tax and GAAP-based financial statements.

The SCACPA representatives asked that the BOA refrain from opposing the Framework. The Board decided not to take a position on the matter at this time, but reserves the right to decide at a later date if the

framework is acceptable in South Carolina.

Beyond the board’s recent meeting, it is important that we all consider our Continuing Professional Education (CPE) requirements and license renewals as the end of the calendar year draws near. Here are a few things to keep in mind: n All South Carolina CPA licenses, public accountant licenses, accounting practitioner licenses, in-state firm registrations, and out-of-state firm registrations must be renewed no later than Jan. 31, 2014. Renewal notices will go out in the mail in late October or early November. n All licensees must submit their annual CPE Reporting Forms, including copies of certificates for self-study courses, to the board office no later than Jan. 31, 2014. n The CPE year is a calendar year, January through December, and all licensees are responsible for 40 hours of qualified CPE annually.

“During the meeting, SCACPA CEO Erin Pate and Board Chair Sharon Mann explained the association’s position and confirmed that SCACPA supports FRF for SMEs and wants the marketplace to determine its success or failure.” n Self-study sponsors must be approved through NASBA’s Quality Assurance Service (QAS) program, and the certificates of completion must include the sponsor’s QAS number. n Self-study CPE is limited to 20 hours per year, and self-study hours in excess of the 20 hours maximum are not eligible to carry forward into the next calendar year. n The board has adopted NASBA’s 23 subject matter areas for CPE, and those can be accessed by using the link on the board News section of the board’s website: www.llronline.com/pol/ accountancy. n Personal development CPE is limited to eight (8) hours annually, and hours in excess of the eight hour maximum are not eligible for carry over into the next year.

continued on page 38

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South Carolina CPA Report

11

SCACPA Educational Fund Awards $23,500 in Scholarships to 11 Students

T

he South Carolina Association of Certified Public Accountants (SCACPA) Educational Fund Trustees recently awarded $23,500 in scholarships to 11 students across the state.

“We are truly excited to recognize these young men and women who represent the future of the CPA profession,” said Angel Hamilton, CPA, and chair of the trustees. “The scholarships promote the study of accounting and are awarded to rising juniors or seniors majoring in accounting or master’s degree students.”

The scholarship recipients will be honored Nov. 14 at a student recognition luncheon during SCACPA’s Annual Summit at the DoubleTree by Hilton in Columbia.

SCHOLARSHIP CRITERIA Scholarship recipients must be South Carolina residents and possess a GPA of no less than 3.25 overall, with a GPA in accounting of no less than 3.5.

Recipients must apply annually and scholarships are not renewable.

2013-14 SCHOLARSHIP WINNERS Anna Arnold, of Little Mountain, a senior at the University of South Carolina and recipient of the Central Chapter of SCACPA Scholarship.

Jacob Behal, of Simpsonville, a junior at Furman University and recipient of the Sheheen Hancock & Godwin Scholarship, Francis Humphries Scholarship and SCACPA Scholarship.

Michelle June Chapman, of Greer, a senior at the University of South Carolina and recipient of the Joe Jackson Memorial Scholarship, which is the highest honor awarded to the top recipient.

Lindsey Brooke Cox, of Dalzell, a senior at the University of South Carolina-Upstate, and recipient of the Kaye Carter Scholarship and Brigman Holcomb Weeks Scholarship.

Hannah Rae Crump, of Rock Hill, a graduate student at Clemson University and recipient of the Central Chapter of SCACPA Graduate Student Scholarship.

Michael D. Darlin, of Greenville, a senior at Bob Jones University and recipient of the Piedmont Chapter

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South Carolina CPA Report

of SCACPA Scholarship and Ray Waters Scholarship.

Rebecca NeSmith, of Summerville, a senior at the College of Charleston and recipient of the Coastal Chapter of SCACPA Scholarship, Robinson Grant & Co. Scholarship, and WebsterRogers LLP Scholarship.

William D. Stalvey, of Georgetown, a junior at Clemson University and recipient of the Sea Island Chapter of SCACPA Scholarship and Lollie Harper Scholarship.

William Christian Stormer, of Columbia, a senior at Clemson University and recipient of the Burch Oxner Seale Scholarship; Burkett, Burkett & Burkett, CPA, PA Scholarship; and the C. C. McGregor Scholarship.

Yanhong Sun, of Central, a senior at Clemson University and recipient of the Edgar Vaughn Scholarship and Past Presidents Scholarship.

Michael White, of Greenwood, a graduate student at Clemson University and recipient of the South Carolina Association of CPAs Graduate Student Scholarship. n

(888) 557-4814 | www.scacpa.org

Thank You to Our Educational Foundation Donors (11.15.2012 - 10.23.2013)

Silver Partner: $2,500-4,999

Coastal Chapter of SCACPA

Cum Laude: $100-$499 S. C. Beckwith, CPA, CFP Clifford H. Bowman, CPA William L. Byrd, CPA, CGMA Robert D. Capell Jr., CPA, CGMA Robert C. Cooper, CPA (Lollie B. Harper Scholarship) John B. Fennell, CPA Penny Lewis, CPA Kenneth E. Love, CPA Sheryl McAlister, CPA, CFP James W. McIlrath, CPA Erin H. Pate, CAE Sara B. Penn, CPA Michael R. Putich, CPA, CGMA William C. Robinson, CPA

Dean's List: $50-$99

Claudia W. Adams, CPA Travis D. Ainsworth, CPA Dr. Liz W. Arnold, CPA, Ph.D., MBA Charles M. Ayers, CPA Christopher J. Bachkosky, CPA, CFP Randy J. Bell, CPA, PFS Robert F. Berry, CPA Lois R. Blanco, CPA Jason M. Blumer, CPA, CGMA Donald G. Boan, CPA Brian J. Brady, CPA, CFF CFE CIA, C Duncan F. Breckenridge Jr., CPA K. Brodie Brigman Jr., CPA Charles E. Brown, CPA Christopher A. Brown, CPA William W. Brown, CPA Orvis B. Buie, CPA Gina A. Burch, CPA John F. Camp, CPA Anne M. Campbell, CPA Pierce W. Cantey, CPA Patrick P. Carey Jr., CPA Charles G. Carpenter, CPA, Ph.D. Christine E. Cassidy, CPA, JD, LLM Mary Jo Cole, CPA Clarence Coleman Jr., CPA, Ph.D. Christopher J. Controne, CPA (888) 557-4814 | www.scacpa.org

Annmarie Corrow, CPA George L. Counts Jr., CPA Robert A. Curtis, CPA, PFS, MST Mrs. Stephanie G. David, CPA Zoe M. Davis, CPA, CFE Joseph C. de Brux, CPA Andrew T. Derajtys, CPA George W. DuRant, CPA, ABV, ASA Susan D. Eidson, CPA Donald L. Ellis, CPA, MBA Mary L. Enright, CPA Barbara J. Evans, CPA, MBA Michael R. Evans, CPA A. L. Fee, CPA Janice H. Fergusson, CPA, MACC Stephen M. Flaherty, CPA, MA, MBA, Ph.D Bernard S. Fleischman Jr., CPA, JD Charles R. Fliflet, CPA Jonathan P. Foster, CPA, CGMA Jennifer N. Gahl, CPA John W. Gandy, CPA, MBA Richard H. Gilbert Jr., CPA Michelle S. Gneisig, CPA, CGMA, CBA Jonathan I. Godwin, CPA Dennis L. Gore, CPA John M. Greene, CPA Ralph M. Greene Jr., CPA, CGMA Angela W. Hamilton, CPA Larry W. Hartsell, CPA Willis E. Haselden, CPA Willis E. Haselden, CPA Alice B. Hazel, CPA Kenneth S. Higgenbotham, CPA J C. Hincher, CPA Donna K. Hudson, CPA Donald L. Hunter, CPA Harry A. Huntley, CPA Leona L. Hydrick, CPA Brian L. Johnson, CPA Robert M. Jones, CPA, CGMA Richard L. Jordan, CPA Lynne L. Kerrison, CPA, CMPE Michael J. Kerscher, CPA James D. Kidd, CPA Joycelynn S. Knight, CPA Douglas D. Kugley, CPA Holly L. Kyle, CPA Cheryl O. Lang, CPA, CGMA Joseph J. LaNunziata, MBA

Thomas R. Larson, CPA Paula J. Lawrence, CPA Elizabeth I. Leitner, CPA Daniel E. Livengood, CPA Michael W. Lowrance, CPA, MBA Patrick M. Luciano, CPA Roger F. Luttrell, CPA, MBA Kara H. Mahon, CPA, MACC Sharon E. Mann, CPA, CGMA Bobby T. Mardis, CPA Travis L. Matthews, CPA Kenneth M. May Chris A. McCraw, CPA C. Stephen McDonald, CPA Ann A. McDuff, CPA Henry A. McFaddin, CPA Sheila C. McKinney, CPA Leesa C. McRae, CPA Robert A. Merritt, CPA David H. Mims, CPA Thomas P. Monahan, CPA, CGMA Robert C. Moorhead, CPA Albert A. Munn IV, CPA Robert J. Nagy, CPA, CGMA Dong K. Noh, CPA James M. O'Cain, CPA Renita M. Owens, CPA Amanda H. Pepe, CPA Barbara G. Pierce, CPA, Ph.D Sarah D. Pope, CPA William T. Pouncey, CPA John J. Quin, CPA, CGMA Charles M. Redfern III, CPA Janine R. Roberts, CPA, CGMA Clarence J. Rogers Jr., CPA, CGMA Duncan M. Rogers, CPA Deborah M. Rose, CPA, CGMA Amy H. Rubin, CPA Deana J. Russell, CPA Teresa J. Saad, CPA David W. Sage, CPA, CFP, PFS Michael W. Saunders, CPA Terry K. Schmoyer Jr., CPA William E. Sellars Jr., CPA Paul A. Semones Jr., CPA, CGMA Robert M. Sisk, CPA, CGMA H. B. Smith, CPA Todd R. Smith, CPA Julius O. Spradley Jr, CPA

Elizabeth M. Stalvey, CPA Curtis C. Stewart, CPA, JD James M. Stewart Jr., CPA, MBA, MST, Dr. Caroline D. Strobel, CPA, Ph.D. Bruce K. Tallant, CPA George F. Taylor Jr., CPA Thomas V. Taylor, CPA, MBA Robert T. Theodore, CPA, CGMA Billie H. Thomas, CPA Bruce E. Truesdale, CPA, MBA Susan M. Tuten, CPA, MBA Edgar A. Vaughn, CPA Kathleen W. Wates, CPA, MAcc, CMA R. Wayne Weaver, CPA Mark W. Webster, CPA Richard D. Weddington, CPA, BIE Susan O. Weesner, CPA, CGMA Donald E. White, CPA David L. Whitehead, CPA Walda C. Wildman, CPA Henry S. Wilson, CPA Kathy B. Wine, CPA Jacqueline C. Wirszyla, CPA Amy L. Wood, CPA Beth T. Zamorski, CPA, CGMA

Honor Roll: $25-$49

James B. Black Christopher O. Farris Sr., CPA Rodger B. Harman, CPA Evelyn H. Johnson, CPA Sadhna Patel, CPA Janene K. Schmidt, CPA, MBA, CGMA Laura K. Smith, CPA Lisa N. Smith, CPA Jason C. Sweatt, CPA

Supporter: up to $25

Liz W. Arnold, CPA, MBA, Ph.D. Deanna L. Cochran, CPA, CGMA William D. Hardaway III, CPA Samuel L. Howell, CPA, MAcc M. Timothy Hucks, CPA William F. Nelli, CPA, CGMA Christopher A. Paris, CPA, MBA Gwendolyn L. Randolph, CPA Edward D. Sullivan, CPA, JD, LL.M. Elizabeth G. Westbury, CPA, CGMA Tom J. Younan, CPA, CGMA South Carolina CPA Report

13

Young

CPA YCPAs Enhance Managerial, Leadership Skills at Emerging Leaders Conference

by Melissa Barbour, CPA SCACPA member since 2011

T

he 2013 Emerging Leaders Conference (ELC) provided young professionals from around the state the necessary technical and soft skills to transition into effective leaders.

SCACPA’s Young CPA Leadership Cabinet served as the planning committee for the Aug. 22-23 conference. As members of the Young CPA Leadership Cabinet, with the help of SCACPA, we are challenged with designing and implementing the program, a conference for young CPAs created by young CPAs. This event provides cabinet members with another opportunity to enhance their managerial skills while also helping to expand and strengthen our relationships with those within and who support the CPA profession.

The YCPA Cabinet’s focus was to attract attendees by offering a curriculum relevant to the younger generation of CPAs that would help participants learn strategies that are necessary to distinguish themselves as leaders professionally and personally. We were able to bring in several excellent speakers on a variety of topics including personal branding, networking, refining communication and effective management as well as technical training in the areas of tax, audit, and accounting.

A session on Personal and Executive Presence received high rankings, highlighting the need for this type of training. Speaker Chakisse Newton, of Cardinal Consulting in Columbia, discussed the importance of your attitude and appearance matching the “brand” that you are trying to portray to your colleagues and clients.

Her session helped participants identify the differences between how they are currently being perceived and how they would like to be perceived. Newton also shared techniques on how to make changes in this area. The session offered conference attendees important interpersonal skills training that is critical to career development but so rarely included in other CPE forums.

Also unique to the ELC are the networking opportunities built into the two-day event. The conference allows young CPAs from across the state to get to know their peers and develop friendships with those facing similar challenges while coming up in the profession. In addition to experiencing 16 hours of CPE together, the social event held after day one allows attendees the chance to get to know one another better and test their recent communication skills training.

The 2013 Emerging Leaders Conference exposed young CPAs to instruction imperative to a successful and long-term career. By going beyond the standard technical “accounting directed” CPE, the advice, guidance, and leadership expertise shared during the conference will have lasting effects throughout ones professional development. n

Melissa Barbour, CPA, is a senior tax accountant with WebsterRogers LLP in Charleston. A member of the YCPA Leadership Cabinet, she currently serves as chair of the Communications Committee.

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South Carolina CPA Report

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S.C. Department of Revenue Updates SCACPA on Latest Developments The following article was compiled by staff and SCACPA members in attendance at the SCDOR meeting.

S

outh Carolina Department of Revenue staff shared the latest news and developments with SCACPA members during a Sept. 12 meeting.

Joining SCACPA CEO Erin Pate and Lobbyist Jeff Thordahl, Haynsworth Sinkler Boyd, Columbia for the quarterly meeting were Todd Dailey, CPA CVA, Derrick Stubbs and Stith, LLP, Columbia; Kathryn Heeney, CPA, Greene Heeney & Associates, Anderson; and Jason Sweatt, CPA, EY, Greenville.

Security efforts topped the agenda and SCDOR Director Bill Blume assured participants that the taxpayer data breach has significantly changed the way the agency thinks about security as well as the way it operates. As an example, Blume noted that DOR has terminated county access to the system as there is no portal in place. He assured the group that CPAs should not be impacted by the

changes and should not experience significantly slower service as a result of increased security.

Other topics included:

At the time of the meeting, the Budget and Control Board was reviewing bids for credit monitoring services.

On Sept. 23, it was announced that CSIdentity Corporation (CSID) had been awarded a contract to provide an additional year of free credit protection for eligible individuals.

Individuals whose information was potentially compromised in the DOR security breach will be able to enroll in the credit protection and identity monitoring services provided

by CSID on Oct. 24, 2013. DOR is working to make the enrollment process easier for taxpayers and to correct some of the systemic issues which blocked some eligible citizens from enrolling in the former program.

eSales Update

Business Personal Property Tax

New York-based Deloitte conducted a study on the agency’s current system.

According to Blume, the report shows that South Carolina lags far behind in comparison to other states, 17 of which use an off the shelf product.

SCDOR collects 95-98 percent of the state’s revenue and an updated website would make the process easier for taxpayers and CPAs. SCDOR is seeking assistance from CPAs on talking with the General Assembly on replacing the current system.

The eSales update has been pushed back and is tentatively scheduled to go live in early January 2014. DOR will share additional information when available.

SCDOR

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South Carolina CPA Report

Credit Monitoring Consumer Enrollment

DOR sent letters to businesses regarding business personal property tax in July. In mid-October, the agency will follow up with those that have not responded. According

South Carolina

CPA

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to DOR, a number of businesses have not filed or may have filed in the wrong place. There is some confusion with some taxpayers as to whether their businesses should file with the county or state. In most cases the PT100 will be filed with the DOR through SCBOS at www.scbos. sc.gov. Many service oriented businesses should file locally with the county, with the exception of Greenville County. All businesses with personal property in Greenville County will file with SCDOR, regardless of the type of business.

Forms Update Updating the agency’s 280 forms is a team process. DOR staff will start the planning process in the coming months and begin posting updated forms in January 2014.

Defense of Marriage Act (DOMA) The U.S. Department of the Treasury and the Internal Revenue Service (IRS) ruled on Aug. 29 that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage. South Carolina has a constitutional provision that restricts marriage to a man and a woman. For tax purposes in South Carolina, those couples treated as married for federal purposes will be treated for tax purposes in South Carolina as single.

Therefore, each spouse in a same sex marriage will need to prepare a pro forma single individual continued on page18

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CORPORATE SC 1120 S

‘S’ Corporation Income Tax Return

Added line 13d which allows overpayments to be transferred to withholding for nonresident shareholders (SC 1120S-WH)

SC 1120/S Instructions

New information and instructions for ‘C’ and ‘S’ Corporation Income Tax Return

Updated “What’s New” section to reflect law changes (Port Cargo Volume Increase Credit Amended and new tax credits listed in tax credit section)

SC 1120 T

Tentative Corporation Tax Return and Conditional Extension

Removed date and signature line

SC 1120 TC

Corporate Tax Credits

Updated credit descriptions to reflect legislation

The following forms have been updated with a checkbox to reflect that an initial return is being filed and/or a federal or state extension has been filed prior to filing the return: SC 990 T, SC 1120 SC 1120 S, SC 1120 U, SC 1101 B, SC 1104, CL-4

FIDUCIARY/PARTNERSHIP SC 1041

Fiduciary Income Tax Return

• Added checkbox to indicate a federal or state extension has been filed • Separate mailing address for a return filed with balance due versus a return filed with either a refund or zero tax due

SC 1041 ES

Fiduciary Declaration of Estimated Tax

• Dates updated, including declaration payment due dates • Tax computation rates updated

SC 1065

Partnership Return

• Separate mailing address for return filed with a payment versus a return filed with nonpayment • Schedule SC-K – Added column E to allocate amounts to states other than South Carolina

The tax computation rates were updated on both the SC 1040 Tax Tables and SC 1040ES Individual Declaration of Estimated Tax.

INDIVIDUAL INCOME SC 1040

Individual Income Tax Return

Line u was added for the Consumer Protection Services deduction under “Subtractions from Federal Income”

SC 1040 General Instructions

SC 1040 General Instructions

DOMA statement

SC 1040 TC

Tax Credits

• Updated so top five tax credits taken are listed first • Updated credit descriptions to reflect legislation (TC-55 & TC-56)

SCH NR

Nonresident Schedule

Added line – deduction for Consumer Protection Services

1099G/INT

Refund, Credit or Interest Statement from Individual Income Tax Returns

Redesigned to look like federal form

South Carolina CPA Report

17

“DOR is implementing a process where the main office will always receive a scan of the form and any DOR employee can retrieve by social security number or employer identification number.” federal income tax return to attach to their S.C. return as a single taxpayer. As a result, the taxpayer will not be eligible to efile in the state and must file a paper return. This is a constitutional issue over which DOR has no control.

Estate Tax Potential for South Carolina Currently, South Carolina does not impose an estate tax. The idea to impose one has been raised, and DOR will be issuing a combined report for comment.

Sales Forms ST-3, ST-388, ST-403 and ST-455 were updated with a checkbox indicating an amended return is being filed as well as an authorized prepared statement.

WITHHOLDING I-290X

Updated instructions on Reason to File Form I-290X

TAX CREDITS I-360

Classroom Teacher Expenses Credit

Classroom Teacher Expenses Credit – taken on page 3 of SC 1040, Line 22 Other refundable credits

TC-4SB

Small Business Jobs Tax Credit

• Updated computations to reflect ‘Base Year’ and not ‘Year 1’ • Revised instructions • Updated examples

TC-55

Abandoned Buildings Revitalization Credit

New Form

TC-56

Angel Investors Credit

New Form

TC-56A

Angel Investors Credit Application

New Form

TC-57*

Exceptional Needs Children Scholarship Credit - Effective 2014

Future Form

TC-57A*

Exceptional Needs Children Scholarship Credit Application – Effective 2014

Future Form

Processing Issues DOR is working to streamline the process for power of attorney (POA) forms. In the past, the office or agent that the taxpayer worked with at the agency determined where the POA was kept. In some cases the district office maintained the form. DOR is implementing a process where the main office will always receive a scan of the form and any DOR employee can retrieve by social security number or employer identification number.

The only exception would be POAs submitted to the audit group.

Amended Nonresident Real Estate Withholding

Tax Conformity The DOR continues to be supportive of SCACPAs efforts to drive the Tax Conformity legislation to pass as early each year as possible. This is as important to DOR as it is to the tax preparers and taxpayers. n

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RISK

We Interrupt This Program!

by Donald P. West, CPA, CITP, eCPPT SCACPA member since 2001

Y

ou are the managing partner for a small CPA firm. The firm has one location, a suite of offices in a two story commercial office building in the southeast. What follows is the next day of your life.

8:00 p.m., Sunday evening March 30, 2014 A staff member calls and tells you to turn on the news. A small tornado has just hit. As you watch you realize that the pile of rubble on screen is your office building.

8:10 p.m.

You open the firm’s disaster recovery plan stored on your portal. You kick off the prearranged system for notifying partners and staff, and head to the scene.

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8:45 p.m.

At the scene, a TV reporter you know (being a well-known and successful CPA) sees you and approaches with the camera rolling.

YOU: As I said, I’m not sure, but we put a lot of time and effort into contingency planning. We’ve designed our systems to be resilient, and, we practice a lot.

TV Reporter: It’s two weeks until April 15, what will this do to you?

YOU: I’m not sure yet but we’ve activated our disaster recovery plan.

If all goes well we will be operating at about 65 percent percent in a temporary location in a few days and back to normal by next Monday.

We’ll alert all of our clients tonight and keep them informed throughout the process.

TV Reporter: Well, good luck. Would you mind if I check on your progress tomorrow?

YOU: Please call me.

TV Reporter: You sound confident.

How can you be so sure?

10:00 p.m., 0 + 2 hours Online conference call with partners and staff.

YOU: Ok, where do we stand?

Office Manager: All partners and staff have confirmed notification, as well as the real estate, furniture, continued on page20

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RISK

“We put together a disaster recovery plan (DRP) and got buy in from all parties. Part of that was finding ways to change our systems and processes to be better prepared.” communications, utility and IT vendors. The vendors will start regular updates first thing in the morning. As you know we have one partner and two staff members out for medical reasons. I’ve reassigned their recovery responsibilities. Email is in the cloud and working as usual.

Everyone has a cell phone and the land lines have been rerouted. I’ve reserved a conference room at the Marriott. The next status meeting will be there at 10:00 a.m. tomorrow morning, and we have several rooms reserved for client meetings as required.

10:00 a.m., March 31, 0 + 14 hours Status meeting at the hotel.

YOU: Give me some good news please.

Office Manager: It’s almost all good.

IT, utilities and furniture are in good shape. The only problem so far is that our first choice for office space had their HVAC fried by lightning last night. We will have to go to the backup location which is available now. I’m moving in there when I leave here. Communications thinks they will be okay with that but they want to confirm some things. They’ll get back to me by 3:00 p.m. this afternoon.

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Noon , 0 + 16 hours TV Reporter calls: It’s me, have you got a minute for an update?

YOU: Sure. We’ve had two status meetings so far. Unfortunately, with the amount of damage we don’t have many decisions to make. Of the top seven things we need to do our work, we only have one available right now, and that’s our people. Luckily no one was in the office. Everything else we just have to replace and reload as soon as possible.

TV Reporter: How long will it take?

YOU: Well, we have temporary space and furniture arranged. Our preferred temporary office was hit by lightning last night but we can start work in the secondary space tomorrow. It will be set up and ready Wednesday. While it’s already wired, the communication vendor says they have a few issues to look into. Hopefully it’s just a matter of bringing the circuits up by Thursday morning. We will know more on that this afternoon, and have alternatives available. Our IT people have a list of everything we need and how it needs to go together. They say they can have it all procured, configured, tested and delivered to us on Thursday. Some of it will be on loan or rented.

after the temporary servers get here.

We also do online backups, so once the servers are up we can download all the changes made between the time the clones were done and the tornado. We expect to have to redo very little work even though several people were working yesterday.

TV Reporter: What about the data that was blown away by the tornado? It could be in another county by now.

YOU: That’s true. I guess some of the drives may be found, but they probably won’t be worth much. All of the data is soundly encrypted.

Unless the NSA finds them, the data is secure and the hardware is most likely trash.

TV Reporter: Sounds like you are pretty much on track. Feel like being on the news later?

YOU: Sure.

6:00 p.m., 0 + 22 hours Evening news, live from the disaster site TV Reporter: I have with me tonight the managing partner of a CPA firm

TV Reporter: And what about all of your data?

YOU: All of our servers are virtual. We clone them every night and back up the clones. We then rotate the backup disk drives offsite every day, so we can rebuild the servers as they were yesterday morning in a few hours

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that, until yesterday, was located in the building that was right behind us. Thanks for coming on. We’ve talked several times since the tornado struck, and I am very impressed with your reaction to the tornado so far.

I think our viewers will be too. Can you summarize what has happened over the last 22 hours?

YOU: I’ll be glad to. We declared an emergency according to our Disaster Recovery Plan right after the tornado.

All our clients have been notified and are being updated every few hours.

We contacted all of our vendors last night and they’re working on their parts of the plan. We got into our temporary office space today. It’s nothing but a war room now, but it will be furnished and functional by Wednesday.

Temporary servers will be up in our vendor’s location tomorrow morning. All of our data should be recovered and the servers delivered on Thursday. The voice and data circuits will be a day later than we had hoped due to the change in temporary office space, but since the servers are being rebuilt off site that will only delay us for a few hours.

TV Reporter: That’s really amazing.

Can you tell us what you did to be so well prepared?

YOU: We started thinking seriously about contingency planning several years ago. With all partners and staff as well as our vendors, we documented our systems and planned how we would recover each one in the event of a variety of possible disaster scenarios. We put together a disaster recovery plan (DRP) and got buy in from all parties. Part of that was finding ways to change our systems and processes to be better prepared. Virtual servers

(888) 557-4814 | www.scacpa.org

and online backup for example.

And then we started practicing.

On a regular basis now we do test recovery of servers and data to verify backups. We hold table top exercises where we simulate a given disaster and then walk through our response. Everyone goes through their responsibilities step by step and we validate the process and update it as required. Sometimes we even assume that one or more team members are unavailable, either due to the disaster, vacation, illness and so on, to make sure the backups know their responsibilities.

DRP reviews, we’ll go back over this experience and see what we’ve learned and how we can do better.

TV Reporter: You said last night that you would be operating at 65 percent in a few days. On schedule?

YOU: So far. Now, there’s a lot of work to do to get there, but everyone involved seems to think we will.

TV Reporter: Thank you for joining us tonight. After a quick break we will speak with another former tenant of this former building who, unfortunately, was not as well prepared. n

TV Reporter: What then?

YOU: First we get back to work. Tax day is almost here and we have to make up for lost time. After that we’ll plan for a new permanent location, and how and when to replace whatever temporary resources we’re using. Then, as part of our regular

Donald P. West, CPA, CITP, eCPPT, has over 35 years of experience in project management and information systems and is currently an independent data security, project management and business intelligence consultant. He has served on SCACPA’s Disaster Recovery Task Force, Financial Planning for Disaster Task Force and Long Range Planning Task Force. He is also a CPA Ambassador.

TV Reporter: Have you seen anything yet that you would do differently?

YOU: Maybe. We’ve been looking at SAAS, that’s Software As A Service.

Our tax and accounting software vendor offers that. Basically, the software and data are in the cloud. If we were using it now we would be working today instead of Thursday.

I think we’ll be looking at that more closely.

Is YOUR Data Secure?

• Security Policies • Risk and Vulnerability Assessments • Penetration Tests

Don West

(803)315-1299 • don@dpwcpa.com CPA, CITP, eCPPT, CISA, CISSP Member SCACPA, AICPA, ISACA, InfraGard, (ISC)²

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RISK

Can the Cloud Help Your Firm?

by Amanda Colgate, CPA SCACPA member since 2006

H

ave you considered a move to the cloud? Many firms have already made the switch to cloud computing. Is it a good move for you?

In 2010, our firm, Godshall & Colgate, LLC in Columbia, decided to make the switch. We decided to change software providers, move our data to the cloud, and employ software as a service (SaaS). There were many factors that we considered before moving to the cloud. Every firm is different, and the decision making process will be unique, but here are some important factors that every firm should consider when looking at cloud options.

Alleviate the Stress of IT One of the biggest benefits of moving to the cloud is to minimize the stress of performing IT functions. Moving to the cloud can mean no longer having to worry about server maintenance, software updates, or system backups.

Having a current, off-site backup of client and firm data should be a major concern for all accounting firms.

Are you covered in the event of a disaster? In the cloud, all you need is a computer and a secure Internet connection to access your data.

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South Carolina CPA Report

“Moving to the cloud can mean no longer having to worry about server maintenance, software updates, or system backups.

Having a current, off-site backup of client and firm data should be a major concern for all accounting firms.“

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Ability to Work Virtually and Scalability

Learning Curve

The cloud allows partners and staff to work virtually. Before moving to the cloud, we were logging into our server remotely. This was slow and temperamental. Our current software allows us to log in from any secure Internet connection as if we were in the office. In addition, it is simple to add new workstations as new staff are hired.

How will your firm learn how to use the new software and maximize its efficiency? Many vendors will include basic training courses with your initial payment for the new software. Additional, more detailed programs can also be purchased.

Allow time for each member of your firm to take part in this training.

Additionally, most contracts include unlimited technical support.

Data Security

Ability to Access Data

A major consideration of moving to the cloud is the security of client data. The level of security, backup and redundancy offered by many cloud service providers is far superior to any safeguards that most small and medium sized firms can afford.

When vetting a vendor, you should inquire as to their disaster recovery plan. How often are backups performed, and are there redundant backup centers in different locations?

Also, it is still very important to maintain the integrity of data while it is being transmitted to the cloud provider over the Internet. Strong passwords should be in place, and they should be changed frequently.

It is also important to determine at what point the data is encrypted.

Managing the Change Will the transition go smoothly?

Make sure that you are comfortable with the conversion process by anticipating issues and asking questions of new providers before signing any contracts. It is also important to determine how your current processes will be changed by moving to a cloud-based environment. Extra time will be needed to develop new systems and to ensure that your data converted properly.

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It is important to ascertain how easily you will be able to access your data and the amount of unscheduled downtime your service provider normally experiences on an annual basis. Most providers claim to have at least 99.99 percent uptime.

Another consideration is making sure your Internet connection is reliable. It is a good idea to purchase the largest amount of bandwidth that you can afford along with redundant Internet connections.

Data Ownership What happens to your data if you discontinue your relationship with your software provider?

What if your provider goes out of business? It is imperative that you are comfortable with your vendor’s answers to these questions and that this information is written in the contract. You should also consider how difficult or costly it may be to transfer your data to another system.

Cost Depending on firm size and computing needs, charges for cloud services can vary widely. Many providers charge an implementation fee and then a monthly fee based upon the needs of the firm. Ask what the minimum length and price will be for any contract you sign.

Also, determine how much data storage is included in your contract and the price of additional storage space. It is also important to ask about yearly price increases. If you also choose to lease your software, you will probably pay on a per user basis each month. This is great for firms who hire extra staff during busy season. While most vendors do offer discounts based on firm size, larger firms may find software as a service to be cost prohibitive.

Firms can save money by moving to the cloud since they no longer need to purchase and maintain expensive onsite equipment such as servers.

The cloud can also lower the cost of office space since files are stored electronically, no space is needed to house IT equipment, and staff can work remotely. Some firms have even closed their brick-and-mortar offices all together.

Every firm is unique. While moving to the cloud may not turn out to be the best solution, it is certainly worth exploring. Experience has shown us that cloud computing makes sense for our four-person firm. While we have not necessarily seen a decrease in the cost of computing, the simplification and increased level of security provided by the cloud has been worth making the switch. We are able to focus more of our energy on serving clients and managing our firm. n

Amanda S. Colgate, CPA is a partner at Godshall & Colgate, LLC in Columbia.

She currently serves on the SCACPA Editorial Board.

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RISK

Corporate

TAX

Compliance The following article was written by J. Bratton Fennell, CPA, and Cynthia Johnson, CPA At any company it is important that you comply with all tax laws and take steps not to overpay. Our business, Burroughs & Chapin Company, Inc., is subject to many different taxes including, income tax, property tax, sales and use tax, and business license tax. Below is a summary of steps we take to comply with and not overpay our income taxes.

Income Tax Our primary business is real estate and it is important that we keep very good property records. When we construct or acquire an asset, we properly segregate the costs of our property so each aspect of the property is depreciated over the shortest depreciable life that is appropriate. The asset descriptions need to be detailed to allow us to properly dispose of properties when

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South Carolina CPA Report

something is sold or taken out of service. In addition, we have used Code Sections 1031 and 1033 and maintain appropriate records to support the deferral of gain under these code sections.

In addition to our industry specific issues relating to real estate, we have a schedule with important tax compliance dates relating to filing of returns, extensions, and due dates for quarterly payment of taxes. We also maintain a detailed record of any book tax temporary differences and any loss or tax credit carry forwards to which we may be entitled. In our case, we are often paying alternative minimum tax (AMT) and it is important we don’t lose track of any AMT credits we may be entitled to in any given year.

Property Tax Property tax is the largest tax that we are subject to as a company and we take great steps to make sure we are not paying more than our fair share.

On the real estate tax front, we review every property tax assessment and check sales comps. If the property appears to be assessed at too high a value, we challenge it with the assessor. With the recent economic downturn, we have challenged a high percentage of our property assessments and have lowered our tax by hundreds of thousands of dollars versus just accepting the value proposed by the assessor’s office.

For personal property it is important that you understand what you are filing and that you are taking assets you have disposed of out of service, even though they may be fully

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depreciated for income tax purposes (but are not fully depreciated for property tax purposes). Other areas that can create an overpayment of tax is reporting assets that are actually part of the assessed value of the real property on the personal property tax return. I have seen items like HVAC systems reported as personal property and that can result in an over assessment of personal property taxes.

One area that seems to create confusion in filing personal property is whether you need to file a form PT-100 with the SCDOR or a PR26 with the county. At times it can be confusing as to which form you should file. SCACPA is working with the SCDOR to help make these filings less confusing.

Sales and Use Tax In this area, it is important that you know the rules so you do not overpay your sales and use tax, but also do not have a hidden liability when you are audited by the SCDOR. Our purchasing department and accounts payable group are both trained in what requires sales and use tax and what items we purchase

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do not. Sometimes an item may be taxable and sometimes others are not based upon their use. For example, we purchase golf carts. There is a tax remitted on the use of carts by golfers but they are not subject to sales or use tax when purchased. Those carts used by maintenance or for other purposes are subject to use tax upon purchase. There are numerous other examples and it is important that some key employees in your organization receive the appropriate training to understand the nuances of these rules.

and in order to properly handle those matters, you need your team members to have those skills. n

J. Bratton Fennell, CPA, is CFO of Burroughs & Chapin Company, Inc. A SCACPA member since 1989, Fennell is a member of SCACPA’s Board of Directors and currently serves as chair elect. He is also a member of the PAC Committee and previously served on the Finance Committee, the Audit Committee and the Behavioral Standards Committee.

Cynthia Johnson, CPA, serves as accounting manager for Burroughs & Chapin Company, Inc. A SCACPA member since 2005, she previously served on the Financial Literacy Task Force.

Business License Tax This tax takes up a lot of our time.

We have 38 business licenses in one municipality alone. The different business activities have various tax rates and at some locations, we have three licenses (retail, food and liquor). We need to be careful to exclude intercompany activities and make sure that we are only reporting revenues subject to the tax. I do not know all the nuances of this tax, but I have a few in our organization that have worked hard to understand the rules and make sure that we are complying with the rules and not overpaying. Whoever you assign this task cannot be someone who is just filing out a form, but someone who understands what they are filling out and willing to do some research when they are not sure of the answer.

Summary Good corporate tax compliance does take an overall plan, but it also requires staff that has critical thinking skills and is willing to learn. As I often tell new CPAs, critical thinking skills will never be outsourced

CPE

“Good corporate tax compliance does take an overall plan, but it also requires staff that has critical thinking skills and is willing to learn.”

FOCUS ON TAX

Nov. 18 The Complete Guide to Payroll Taxes and 1099 Issues (97013) - West Columbia Nov. 19 Surgent McCoy's Top 10 Tax Issues in Dealing with LLC's and Partnerships (97113) - West Columbia Nov. 20 Tax Strategies for Businesses - Planning Techniques and Current Issues (97413A) - Greenville Nov. 20 Tax Planning Issues for the Small Business Owner (97513SW) - Various See page 35 for a complete listing.

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RISK

The Basics of Enterprise Risk Management

by Timothy L. Baker, CPA, CGMA SCACPA member since 1995

“The ERM process is not a one-time project. To be successful, it must become a continuous, embedded part of the organization’s culture and processes.”

H

ave you overheard fellow CFOs and controllers talking about their Enterprise Risk Management (ERM) initiatives lately? Did you wonder how ERM may apply to your organization? The goal of this brief synopsis of COSO’s ERM framework is to provide an explanation of what the topic is about, define the key areas of ERM, and address some common misconceptions about applicability of ERM. In 2001 the Committee of Sponsoring Organizations of the Treadway Commission (COSO) commissioned a project to look at ways an organization could manage its risks from a holistic, enterprise-wide perspective, rather than from functional silos.

Their publication, Enterprise Risk Management – Integrated Framework (2004), allows for the identification, assessment and management of the risk environment of an organization.

In the same fashion that the Internal Control – Integrated Framework

26

South Carolina CPA Report

(1992, superseded 2013) offered a comprehensive control framework, COSO’s ERM offers a model for understanding the risk portfolio of an organization.

The basic process involved in an ERM implementation can be broken down into the following key areas: 1. Evaluation - What is the firm’s internal environment and management’s risk appetite (how much risk management is willing to take)? How does the organization assess its current level of overall risk?

2. Objective setting – What are the strategic objectives of the firm? How do these objectives mesh with the risk appetite defined above?

3. Event identification – What internal or external events could cause risk or opportunities? This requires much brainstorming.

There is an old expression - what is keeping you up at night - which

may be useful in identifying events.

4. Risk assessment – This step involves assessing the risks identified in the previous step.

Approaches vary from simple ranking to complex quantitative models to “heat maps” illustrating the probability and severity of risks.

Think of this as creation of a risk portfolio.

5. Risk response – The team would then decide what action to take with each of these risks.

Since risk has inherent (initial) and residual (remaining after controls/ risk management put in place) components, the following four responses should be analyzed as possible dispositions for each risk: A) Accept – a decision to continue in the market or practice that produces this risk.

Typically this would be analyzed using a cost-benefit approach.

B) Reduce – this route would involve placing controls in place

(888) 557-4814 | www.scacpa.org

to mitigate the level of risk, understanding that a residual risk would remain.

C) Share – the decision to mitigate risk by sharing with others. Solutions may involve insurance, outsourcing, or partnering to reduce risk.

D) Avoid – this action requires exiting the business component which causes the risk.

6. Control activities – This step entails the process of designing and putting controls in place to achieve the chosen risk response.

7. Information and Communication – The team next undertakes the process of reporting about the progress of the project, while also putting key indicators in place to monitor the total risk environment on a continual basis.

8. Monitoring – This final step establishes ongoing process of monitoring and modifying the plan as necessary to achieve the overall objective of risk understanding and minimization.

The ERM process is not a one-time project. To be successful, it must become a continuous, embedded part of the organization’s culture and processes. Following are key common misconceptions about ERM. One key misconception is that ERM is only a requirement of the finance industry. Other industries are implementing ERM measures.

According to COSO, “the corporate governance rules of the New York Stock Exchange require audit committees of listed corporations to discuss the risk assessment and

(888) 557-4814 | www.scacpa.org

“One recent study finds the most often used tracking system for ERM is still a computer spreadsheet. With that said, it becomes apparent that ERM can be utilized by entities of all sizes. All organizations, whether small or large, have risks.” risk management policies of their organizations.”1 Further, the SEC requires expanded proxy disclosures pertaining to the extent of the board’s role in risk oversight. Thus, the requirements to have a formal risk management strategy in place are there for public companies across all industries, as well as being a best practice when not required.

Another common misconception revolves around small-to-mid sized entities, whether publicly held or not. ERM was designed with Small to Medium Enterprises in mind.2 Many organizations state they will need to acquire additional resources to support such an effort, starting with a chief risk officer. Most organizations actually start the process with the chief financial officer or chief audit officer coordinating the effort. One recent study finds the most often used tracking system for ERM is still a computer spreadsheet. With that said, it becomes apparent that ERM can be utilized by entities of all sizes.

All organizations, whether small or large, have risks.

This article has conveyed a basic understanding of what Enterprise Risk Management is, identified the key components, and answered some common questions for you.

Additional information can be obtained at COSO’s home page at www.coso.org. n

Footnotes

1) ^The Committee of Sponsoring Organizations of the Treadway Commission. (2004). COSO Enterprise Risk Management - Integrated Framework.

AICPA. 2) ^The Committee of Sponsoring Organizations of the Treadway Commission. (2011). Embracing Enterprise Risk Management: Practical Approaches for Getting Started. The Committee of Sponsoring Organizations of the Treadway Commission.

Additional References

3) U.S. Securities and Exchange Commission. (2009). SEC Approves Enhanced Disclosure About Risk, Compensation and Corporate Governance. Retrieved 09/28/2013, from http://www.sec.gov/news/ press/2009/2009-268.htm 4) The Committee of Sponsoring Organizations of the Treadway Commission. (2013). COSO Internal Control - Integrated Framework. AICPA. 5) The Committee of Sponsoring Organizations of the Treadway Commission. (1992). COSO Internal Control - Integrated Framework. AICPA.

Timothy L. Baker, CPA, CGMA, is a lecturer at the University of South Carolina Moore School of Business.

He is past president of the SCACPA Board, chair of the Accounting Careers and Academic Relations Committee and a member of the Long Range Planning Task Force and Editorial Board Task Force.

South Carolina CPA Report

27

RISK

Risks of Telecommuting

by Randy Johnston

F

undamental building blocks that all firms must have to mitigate risk include 1) firewalls, 2) spam control and 3) antivirus protection. The bad news for 2013 is that each of these three major product classes doesn’t do as good or comprehensive job as they did last year or in many of the years before that. Why? The intruders and bad guys are getting more sophisticated at writing their code and creating effective attacks. Even the best of the firewall, spam and AV providers are now routinely letting more attacks, bad messages and malware through.

Firewall vendors such as Cisco, WatchGuard and SonicWALL are the best options for protecting your firm today, and entry level versions of these products should be considered for use by telecommuters. Home vendors like DLink, Belkin and Linksys have no chance of protecting your firm, and little chance of protecting telecommuters. As more firms choose to use hosting companies as a public cloud strategy, and more firms allow telecommuting using private cloud technologies like Citrix, Microsoft Remote Desktop Protocol (RDP, the former Terminal Services), GoToMyPC, LogMeIn Pro or other remote access products, you will need to manage the risks of the remote users and home environments.

Getting Mobility Right for Telecommuters Many of you have invested in tablets, smartphones and of course portable computers to improve the

28

South Carolina CPA Report

“Many of you have invested in tablets, smartphones and of course portable computers to improve the productivity of your team members, professionals and firm. Have you protected your firm properly by managing all of these mobile tools?” productivity of your team members, professionals and firm. Have you protected your firm properly by managing all of these mobile tools?

Our fundamental advice is to encrypt all mobile devices.

Managing mobile devices properly is difficult. There are many technologies involved from 1) hosting software such as Citrix XenApp, Citrix XenDesktop or VMware View, to 2) wireless and cellular data connections to 3) the devices themselves. If a computer is used on a team member’s home network, other users in the home can infect the team member’s machine and access to your office can be granted via these other home machines. 4) We recommend isolating telecommuter’s business computers from other home users using a hardware firewall.

Finally, it is wise to have 5) software that can manage all of your firm’s mobile resources.

The Final Outcome When telecommuting is done right, team members can work as effectively at home or at a client site as they do at the office. Speed and the use of multiple monitors should be comparable, too. The main things you give up are wasted time spent around the water cooler and on commuting. It is also more difficult to keep engaged, personal relationships.

You’ll have to have a plan to keep team members engaged with others in the organization to keep them from being susceptible to predatory hiring by other companies who use telecommuters. n

Randy Johnston and his K2 Team provide CPE courses through SCACPA at the association’s office, in-house at your firm or via webinars. His NMGI team provides IT consulting services and recommendations to CPAs as a benefit of your membership and attending K2 events. If you have questions on any hardware, software, procedures or IT strategies for your firm, contact Randy@k2e.com with your questions or to schedule a time to speak.

(888) 557-4814 | www.scacpa.org

Peer Review Billing Changes

I

n 2013, SCACPA changed its fiscal year-end to July 1. Beginning in 2014, all firms enrolled in the peer review program will pay one annual fee that will include both the annual administrative fee and a prorated scheduling fee (which was heretofore paid once every three years). Your firm will receive one annual invoice for enrollment in the program. You can expect this invoice on or near Aug. 1, 2014.

The new annual fee schedule will be:

This change in invoicing method will: • Combine your firm’s administrative and scheduling fees in one annual invoice.

• Automate the process and provide you an online payment option.

• Assist your budgeting of peer review fees through an annualized payment schedule. n

1 Professional

[

ENGAGEMENT Firm Size

SCACPA Member

Non-Member

AP or PA

1 Professional

$175

$330

$175

2-5 Professionals

$250

$500

$250

6-10 Professionals

$330

$610

$330

Over 10 Professionals

$395

$760

$395

SCACPA Member

Non-Member

AP or PA

$210

$430

$210

2-5 Professionals

$300

$610

$300

6-10 Professionals

$380

$785

$380

Over 10 Professionals

$470

$960

$470

SYSTEM REVIEW Firm Size

Number of professionals in your firm will be based on 2013 data provided. Professionals are considered all personnel who perform attest services, for which the firm is responsible, whether or not they are CPAs. Firms that resign from the Peer Review program or are dropped and decide to re-enroll at a later date will also pay a $200 reinstatement fee.

-Y NUMBER ISx

]

!$0 HELPS ME ADD + TO MY BOTTOM LINEx

So what’s your number? Higher revenues and profits? More and happier clients? Fewer work hours? An earlier retirement date? ADP can help add it all up for you, with products and services that go beyond just payroll. Like cash flow, risk and talent management solutions so you work smarter, easier and more efficiently. ADP offers innovative solutions, superb service and outstanding results.

Discover YOUR number – by calling OUR number: 855-408-3751 or visit us at www.accountant.adp.com/my-number

HR. Payroll. Benefits. © 2012 ADP, Inc. ADP and the ADP logo are registered trademarks of ADP, Inc. In the Business of Your Success is a service mark of ADP, Inc.

Focus on Membership

Member News

Gregory Ackerman, CPA, has been promoted to the position of senior manager in WebsterRogers LLP’s Myrtle Beach office.

William Barefoot, CPA, has been promoted to the position of senior manager in WebsterRogers LLP’s Florence office.

Beth G. Bauknight, CPA, Denise Gunter Hudson, CPA, and Bryan P. Hudson, CPA, have been admitted as shareholders to Bauknight Pietras & Stormer, P.A. William Bossong, CPA, with the Columbia office of Elliott Davis, LLC, has been admitted as a shareholder.

Marsi Cameron, CPA, has been promoted to the position of senior manager in WebsterRogers LLP’s Florence office.

Mark H. Cooter, CPA, has joined Cherry Bekaert as a tax partner in the firm’s Greenville office.

Heather Corder has joined the Columbia office of McGregor & Company, LLP as a staff accountant.

Harris J. Darver, CPA, has been promoted to manager at McGregor & Company, LLP in Columbia.

Timothy A. Grow, CPA, has been named managing shareholder with Elliott Davis’ Charleston office.

Anna Locke, CPA, president and owner of A.T. Locke, PC has been named to the Class of 2015 Liberty Fellows.

Matthew Madden, CPA, with the Greenville office of Elliott Davis, LLC has been admitted as a shareholder.

Allison Swaggard, CPA, has been promoted to senior staff accountant in WebsterRogers LLP’s Sumter office.

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South Carolina CPA Report

South Carolina CPAs Lose Distinguished Colleague On Sept. 27, 2013, South Carolina CPAs lost a distinguished colleague and a link to the accounting profession’s history. Andrew Crawford Clarkson Jr. died at the age of 94.

A Columbia native, Crawford graduated in absentia from the University of South Carolina having received a commission as Ensign USNR. He served in World War II and then returned to Columbia and joined his father, holder of CPA SC certificate #1, at A.C. Clarkson and Company, CPAs. He was awarded his CPA license (#128) in 1948 and that same year was named partner of the firm and joined the S.C. Association of CPAs. In 1952, Clarkson was recalled by the Navy during the Korean War. Upon his return to Columbia, he entered USC School of Law, graduated in 1955 and was admitted to the S.C. Bar and the Federal Bar.

From 1958-66, Clarkson served as a member and executive secretary of the S.C. Legislative Tax Study Commission, authoring most of the tax legislation enacted during this period. He also served as president of SCACPA in 1958. In 1960, he moved A.C. Clarkson and Company to partnership form as Clarkson, Harden, and Gantt, CPAs. The firm grew to nine partners and over 70 employees engaged in all facets of accounting practice. In 1985 Clarkson Harden and Gantt was acquired by Arthur Young and Company. Clarkson retired from the accounting practice in 1987 and was appointed as a commissioner of the S.C. Tax Commission (now the S.C. Department of Revenue).

He served South Carolina in this position for eight years, the last two as chairman. For this service Gov. Carroll Campbell awarded him the Order of the Palmetto.

After leaving the Tax Commission, Clarkson was associated with the accounting firm of Bauknight Pietras and Stormer, P.A. n

Cynthia Sue Taylor, CPA, CGMA, has joined Burkett Burkett & Burkett CPA, P.A. in West Columbia as senior staff accountant.

Elliott Davis, PLLC, has opened a Raleigh, N.C. office through its combination with Lunsford & Strickland, P.A.

Kevin Wise, CPA, has been promoted to the position of manager in WebsterRogers LLP’s Myrtle Beach office.

WebsterRogers LLP is pleased to announce that it has been named to the INSIDE Public Accounting (IPA) Top 200 list for 2013. This is the second consecutive year that WebsterRogers has been included on the IPA Top 200 list.

Firm News

Derrick, Stubbs & Stith, L.L.P. is pleased to announce the acquisition of the public accounting practice from Frankie and Karen Dial in May of this year. As part of the acquisition, Derrick Stubbs welcomes JoAnn Hebda, EA as a tax specialist.

Condolences

Teresa (Teri) Ary Welsh, CPA, of Little Mountain, died July 3. A SCACPA member since 2007, she was employed with Lexington/Richland School District 5.

(888) 557-4814 | www.scacpa.org

Focus on Membership

Welcome New Members (through 09-30-13) AFFILIATE MEMBER/NON-CPA Emily Cargill Lyons Greenville, S.C.

Clayton T. Westbrook Dixon Hughes Goodman* Greenville, S.C.

Erica P. Gillespie Greenville, S.C.

FELLOW - OTHER Judy L. Bishop, CPA Simpsonville, S.C.

David Settles Curry, PA & Easley, S.C. Aneshia Smith Curry, PA & Easley, S.C. Cindy L. Swaim, EA Columbia, S.C. ASSOCIATE Frederick R. Ange Jr., CPA Columbia, S.C. Zachary Kulow, CPA Sumter, S.C. Rachel Toledano-Smith, CPA Summerville, S.C. Sam B. Winkler, CPA Dixon Hughes Goodman, LLP* Charleston, S.C. ON CAMPUS CHAMPION Dr. Patsy G. Lewellyn, CPA University of South Carolina at Aiken, Aiken, S.C.

Chris Hammond, CPA Columbia, S.C. McKenna S. Hughes, CPA Lexington Medical Center Foundation West Columbia, S.C. Linwood Vereen Jr, CPA Myrtle Beach, S.C. Min Zhang, CPA Simpsonville, S.C. FELLOW Craig J. Adams, CPA Greenville, S.C.

Betsy Pearson, CPA Easley, S.C.

*100 Percent Membership Firm FIRM ADMINISTRATOR Maggie Newburg Saad and Manios, LLC Greenville, S.C.

Brett A. Hopkins Summerville, S.C.

Kelly Ranney, CPA Mt Pleasant, S.C.

STUDENT Anna M. Arnold Little Mountain, S.C.

Ellen McCarthy Myrtle Beach, S.C.

Michelle A. Simmons, CPA Mauldin, S.C.

Jessica Atwood Columbia, S.C.

Colleen O. Teodosio, CPA Simpsonville, S.C.

Matthew Calderone Spartanburg, S.C.

Duncan W. Wilkes, CPA Hilton Head Island, S.C.

Tyler E. Carson Hanahan, S.C.

William R. Williamson, CPA, CFE, CFF, Bradshaw Gordon & Clinkscales, LLC* Greenville, S.C.

Jonathan C. Dunn Columbia, S.C.

James B. Pierce Jr., CPA, MBA Clover, S.C.

Louis W. Henry Conway, S.C.

Tristan N. Howard Goose Creek, S.C.

Mandakh Ochirpurev Charleston, S.C. Amanda Peebles Columbia, S.C. Mercedes Pelayo Myrtle Beach, S.C. Yanhong Sun Central, S.C. Roarke Williams-Mcclure Hilton Head, S.C.

Laura E. Amick, CPA Lexington, S.C. Sally A. Border, CPA Southeastern Spine Institute Mount Pleasant, S.C. Jennifer D. Boyer, CPA Augusta, Ga.

CPA CANDIDATE Amy E. Devore Dixon Hughes Goodman, LLP* Greenville, S.C.

Carlene J. Chapella, CPA Lexington, S.C.

Sarah McIlwain Elliott Davis, LLC* Charleston, S.C.

Julie Dickson, CPA Westminster, S.C.

Dean A. Cochenour, CPA, MBA Hilton Head Island, S.C.

Karen A. Fine, CPA, CVA, CDFA Brandon M. Robinson Charleston, S.C. Cherry Bekaert & Holland, LLP* Greenville, S.C. David J. Johnson, CPA Greenville, S.C. Bryan L. Rowe, MBA Fort Mill, S.C. Lindsey Kitterman, CPA Greenville, S.C. Hannah Stroud, MACC Greenville, S.C. Cathy A. McDowell, CPA Simpsonville, S.C. Ellen R. Watson Mount Pleasant, S.C.

(888) 557-4814 | www.scacpa.org

Do you need a peer review?

At WebsterRogers, we’ve been providing peer review services since the AICPA required them to be mandatory for those in public practice. We are dedicated to enhancing the quality of accounting, auditing and attestation services provided by AICPA members.

Our professionals regularly provide peer review services to small and large public accounting firms across the eastern United States.

Please contact Tom Fitzsimmons at 843.665.5900 or Chuck Talbert at 843.577.5843 for more information

Charleston . Columbia . Florence . Georgetown . Hilton Head Litchfield . Myrtle Beach . Summerville . Sumter

South Carolina CPA Report

31

South Carolina

CPA

Chapter Events CATAWBA

Dues: $90 (18 months), includes discounted registration to CPE seminars and free family/networking event.

• Dec. 3: FASB/Forensic Accounting (8 hours CPE) Mark Hobbs - Baxter Hood Center

CENTRAL

Dues: $75 (18 months), includes discounted registration to CPE seminars, free socials and business meeting dinner.

• Nov. 8: Annual Tax Update (8 hours CPE) William Grooms - Doubletree by Hilton

COASTAL

Dues: $195 (18 months), includes discounted or free registration to CPE seminars (additional registration fee for Tax Update) and free registration to family/ networking event • Nov. 12: Surgent McCoy's Best Federal Tax Update (8 hours CPE) Jack Surgent – Embassy Suites, N. Charleston

FOOTHILLS

Dues: $60 (18 months), includes discounted registration to CPE seminars and free social/networking events

Piedmont Chapter’s Donation Funds Money Works Exhibit

T

he Piedmont Chapter was recognized recently for a $40,000 donation to The Children’s Museum of the Upstate (TCMU) for a new exhibit called Money Works.

Money Works is a permanent exhibit and traveling education piece that allows children to learn about earning, saving, spending and philanthropy through role-play as a bank teller, manager or customer. It also teaches children basic math and problem-solving skills, and encourages them to become money smart.

“The CPA community saw this as a great way to give back to make a positive impact on the youth in the Upstate area,” said Piedmont Chapter President Brad Ledford of DHG Search Advisors in Greenville.

“Statistics show improved financial literacy impacts many areas of our lives. A survey by Junior Achievement indicates that K-12 is the best time to learn money management. “ The new exhibit enables TCMU to expand its school-based programs, maximize new programmatic collaborations, and enhance the reach and impact of the museum’s programs for underserved children and families. n

GRAND STRAND

Dues: $187 (18 months), includes free registration to CPE seminars, holiday party and student recruitment fair • Nov. 20: A&A Update (8 hours CPE) Russ Madray • 2014 – Jan. 28: Federal Income Tax Update (8 hours CPE) Art Werner, Springmaid Beach, Myrtle Beach

Piedmont Chapter President Brad Ledford of DHG Search Advisors in Greenville addresses attendees.

PEE DEE

Dues: $75 (18 months), includes free registration to CPE seminars and free special events

PIEDMONT

Dues: $50 (18 months), includes discounted registration to CPE and free social events. Note: The Piedmont Chapter is subsidizing a portion of the dues for 2013-2014 and the membership renewal will remain $50 (covers 18 months) for members.

SEA ISLAND

Dues: $202 (18 months), includes free registration to CPE seminars and special events • Nov. 1: Federal Income Tax Update (8 hours CPE) Art Werner

32

South Carolina CPA Report

(888) 557-4814 | www.scacpa.org

PIUs Draw Over 1100 SCACPA Members

O

ver 1100 SCACPA members received two hours of free CPE by attending the 2013 Professional Issues Update (PIU) series. The PIUs visited nine locations across the state and offered an update on regulatory, professional and legislative issues. Attendees also had an option to attend Ethics and Professional Conduct for South Carolina CPAs. SCACPA CEO Erin Pate and Board Chair Sharon Mann discussed: • A review of new issues and trends affecting the profession • The evolution of private company financial reporting • Issues impacting small firms and sole practitioners (tax, firm of the future) • Issues impacting CPAs in business or industry (integrated reporting, CGMA, etc.)

• State legislative and regulatory update • Accounting education now and in the future • Evolving skills needed by employees

GR WTH It’s what CGMA stands for.

Officially, of course, it’s Chartered Global Management Accountant.

A new designation representing accomplished professionals that drive and deliver business success, worldwide.

Find out more at cgma.org

Copyright © 2012 American Institute of CPAs. All rights reserved.

The traveling CPE road show visited Rock Hill, Florence, Myrtle Beach, Anderson, Grenville Spartanburg, N. Charleston, Hilton Head Island and Columbia. Following the Greenville PIU, SCACPA held its first-ever CGMA roundtable. Paul Parks, senior technical manager with AICPA's management accounting division, spoke to about 20 attendees on Big Data and Data Analytics. n

Focus on CPE

Accounting & Auditing Conference Preview

by Reva Brennan, MPA, CAE, IOM SCACPA Chief Operating Officer

R

egistration is now open for Following is what you need to know: the 2013 Accounting and n The A&A Conference spans two Auditing Conference, Dec. 5-6 days with 16 CPE credits, two in beautiful downtown Charleston at tracks and 10 concurrent sessions. the Marriott Hotel. SCACPA members n The kickoff general session is save $225 when registering by Nov. 14. an A&A Update with longtime favorite, Brad Newkirk, Dixon This conference features dynamic Hughes Goodman, LLP. Brad speakers that will provide you the will also cover Fraud in Financial latest information on a variety of Statements and Group Audits. topics designed for CPAs in public n The highlight of this conference accounting and business and industry. will be the Financial Reporting The format of the conference offers Framework from Karen Kerber, you the flexibility to choose the CPA, with Kerber Rose CPAs. sessions that best meet your needs.

Karen is the chairperson of the This is a conference you don’t want to Technical Issues Committee of miss! the AICPA’s Private Company Practice Section. n The Financial Reporting Framework session is followed by a panel of experts giving their thoughts on this concept.

Moderator Chuck Talbert, CPA, WebsterRogers, will be joined by panelists: Boyd Jones, NBSC; Mark Hobbs, CPA, CFF, CGMA, The Hobbs Group; Karen Kerber, CPA, KerberRose CPAs; and

George Beckwith, CPA, National Gypsum Company.

n Michael Grady, CPA, CVA, CM&AA of WebsterRogers, LLP will present Analyzing Financial Statements Including Techniques for Working Capital Analysis. n Technology guru Judy Borsher, CPA, MBA, CGMA, CITP of SCG Training and Consulting will lead two sessions: Microsoft Excel Hot Topics and Privacy & Security Issues. n South Carolina favorite, Mark Hobbs, CPA, CFF, CGMA, The Hobbs Group, will share how to prepare for external auditors. n The staple GASB Update will be presented by Joel Black, CPA, with Mauldin & Jenkins CPAs. The session also includes OMB Circular A-133. n George Beckwith, CPA, chief financial officer of National Gypsum Company and member of the Private Company Financial Council will present a private company update and the proposed changes to accounting for goodwill and impairment, derivatives, related party VIES. n Back on the agenda is Peer Review Deficiences, presented

by Richard Hill, CPA, Mitchell Emert and Hill, PC. For conference details or to register, visit www.scacpa.org/A&A2013.

CPE Reporting Deadline and Reminders n CPE should be earned annually, by Dec. 31 and reported to the South Carolina Board of Accountancy by completing a CPE report and submitting to the Board office on or before Jan. 31 of each year.

34

South Carolina CPA Report

n Self-study courses are limited to 20 hours per year, and cannot be carried over. There is a 10 hour maximum on the number of hours an individual can earn in a day. Self-study courses must be NASBA QAS approved. n Members of SCACPA can access their CPE transcript online at www.scacpa.org, under My Membership, Manage My CPE.

n Personal Development is limited to eight hours per year.

These hours cannot be carried over. n The six hour ethics requirement every three years must be completed by Dec. 31, 2015 of which two hours must be South Carolina specific.

(888) 557-4814 | www.scacpa.org

Focus on CPE

Federal Tax Update with Walter Nunnallee

G

et ready for year-end planning and the 2013 tax season with Walter Nunnallee. The Federal Tax Update Series combines up-to-the minute tax tips, timely examples and that engaging sense of humor you’ve come to expect from Nunnallee.

FEDERAL TAX UPDATE SERIEleSe al

with Walter Nunn Five Locations

!

to Choose From

Greenville Dec. 2 mbia Dec. 16 Colu le Beach Dec. 30 Myrt leston Dec. 31 Char cast Dec. 16 Web 013 rg/taxseries2 www.scacpa.o

ign CPE By DesExc el. rn.

Cre ate . Lea

The course format is designed to update CPAs with various levels of experience and emphasize tax developments that affect 2013 tax return preparation and 2013 tax planning for individuals, corporations, and non-corporate businesses.

The materials include: • A checklist of developments first effective in 2013.

• A checklist of retroactive developments that may require amended returns.

• A detailed planning section, including important individual and business planning ideas.

Tax Season Survival Guide

• Selected new or modified Federal tax forms for 2013.

Five convenient locations to choose from!

Dec. 2 - Greenville – Embassy Suites Hotel & Golf Resort Dec. 16 - Columbia – Embassy Suites Hotel & Conference Center Dec. 30 – Myrtle Beach – Marina Inn at Grand Dunes Dec. 31 - Charleston – Marriott Downtown Charleston Dec. 16 - Webcast – www.scacpa. org/taxwebcast13 For event details or to register, go to www.scacpa.org/CPE

Nov. 18

Dec. 2

Dec. 16

Nov. 19

Dec. 3

Dec. 30

The Complete Guide to Payroll Taxes and 1099 Issues (97013) West Columbia Surgent McCoy's Top 10 Tax Issues in Dealing with LLC's and Partnerships (97113) West Columbia

Nov. 20

Tax Strategies for Businesses Planning Techniques and Current Issues (97413A) Greenville

Nov. 20

Tax Planning Issues for the Small Business Owner (97513SW) Various

Nov. 21

2013 Hot Tax Topics - Discover the Hottest Tax Topics of the Year (97713A) Greenville

(888) 557-4814 | www.scacpa.org

Federal Tax Update with Walter Nunnallee (98113FG) Greenville South Carolina Taxation and Economic Tax Incentives (90413) Columbia (Co-sponsored by the South Carolina Bar - Continuing Legal Education Division)

Dec. 4 Getting Ready for Busy Season: A Guide to New Forms, Filing Issues and Other Critical Developments (98313) West Columbia

Dec. 5

Surgent McCoy's Advanced Individual Income Tax Return Issues (98413) West Columbia

Dec. 11

Annual Tax Update (98813SW) Various

Federal Tax Update with Walter Nunnallee (98113FC) Columbia Federal Tax Update with Walter Nunnallee (98113FM) Myrtle Beach

Dec. 31

Federal Tax Update with Walter Nunnallee (98113FH) Charleston

Jan. 9

Preparing Individual Tax Returns for New Staff and Para-Professionals (10014) West Columbia

Jan. 10 The Complete Guide to Preparing Limited Liability Company, Partnership, and S Corporation Federal Income Tax Returns (10114) West Columbia

South Carolina CPA Report

35

2014 Multi-State CPE & Ski Conference January 13, 14, & 15, 2014 24 Hours of CPE Beaver Run Resort & Conference Center, Breckenridge, Colorado

www.k2e.com/ski Sponsored by the Colorado Society of CPAs and the following eighteen state CPA Societies: Arkansas Society of CPAs Connecticut Society of CPAs Florida Institute of CPAs Hawaii Society of CPAs Idaho Society of CPAs Iowa Society of CPAs Kansas Society of CPAs Society of Louisiana CPAs Massachusetts Society of CPAs Mississippi Society of CPAs Montana Society of CPAs Ohio Society of CPAs South Carolina Association of CPAs South Dakota Society of CPAs Texas Society of CPAs Utah Association of CPAs Washington Society of CPAs Wisconsin Institute of CPAs

The 2014 Multi-state CPE & Ski Conference supported by nineteen state CPA societies is pleased to bring you the very best CPE & Ski Conference. The Conference features six 4-hour sessions on a wide variety of today’s most popular CPE topics.

The instructors rank among the top CPE instructors in the United States. To receive an information packet containing detailed course descriptions and instructor biographies, please call K2 Enterprises at (888) 542-9390. Or you may register by faxing the registration form below to the Colorado Society at (303) 773-6344 or mail the form to the Colorado Society of CPAs, 7887 E. Belleview Avenue, Suite 200, Englewood, CO 80111.

Name: Company: Address: City, State & Zip: Phone & Fax:

Registration Form

Please indicate the sessions you would like to attend: Managing Documents in the Cloud Top 15 All-Time Hints and Tips Federal Tax Update Accounting & Auditing Update Tech Update Office 2013 and Windows 8

1/13/14 1/13/14 1/14/14 1/14/14 1/15/14 1/15/14

7:30am - 11:00am 4:10pm - 7:40pm 7:30am - 11:00am 4:10pm - 7:40pm 7:30am - 11:00am 4:10pm - 7:40pm

4 hours of CPE 4 hours of CPE 4 hours of CPE 4 hours of CPE 4 hours of CPE 4 hours of CPE

$100.00 $100.00 $100.00 $100.00 $100.00 $100.00

Payment: Check One: 8 hours - $200 12 hours - $300 16 hours - $400 20 hours - $500 24 hours - $600 Method of Payment: Check Visa MasterCard Discover Card Card Number: Expiration Date: Cardholder Name: Signature: PAYMENT DUE AT TIME OF REGISTRATION Hotel Accommodations: Reservations can be made by calling Beaver Run Resort at 1-800-525-2253 and identifying as being part of the Colorado Society of CPAs CPE & Ski group and/or K2 Enterprises CPE & Ski and group code: CPA44X Colorado Society of CPAs Cancellations/Transfers Policy A. Cancellations made 8 business days or more before the conference - no charge.

B. Cancellations made within 3 to 7 business days are subject to a charge equal to 12% of the registration fees.

C. Cancellations made within 2 business days are subject to a charge equal to 50% of the registration fees.

D. No notice given of cancellation is subject to a charge equal to 120% of the registration fees.

E. Transfers will be handled on the same basis as cancellations.

I agree to the terms of this cancellation policy Signature____________________________

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South Carolina CPA Report

(888) 557-4814 | www.scacpa.org

Focus on CPE

Get a Jump Start on 2014 CPE Jan. 13

Jan. 14

Advanced Auditing of HUD-Assisted Projects Compliance Pitfalls (10214A) Gain important insights into compliance pitfalls for HUD-assisted housing owners and managers. Learn to recognize and apply the latest changes in the federallyassisted housing industry and efficiently plan, perform and report a HUD-assisted engagement. Uncover the effects of OMB Circular A-133 on HUD-assisted nonprofit entities. This course provides you with full coverage of the Consolidated Audit Guide for Audits of HUD Programs.

Audits of HUD-Assisted Projects Complying with HUD Regulations (10314A) Learn how to discern the various audit requirements for HUD programs and how to comply with specific HUD regulations, contracts and procedures. Plus, review the latest developments on professional standards affecting particular federal programs and how they affect your audits. This course provides you with knowledge of the effect of Government Auditing Standards (“Yellow Book”), AICPA standards, OMB requirements and the Consolidated Audit Guide on the design of the audit plan.

Note: There is overlap between this course and Audits of HUD-Assisted Projects – Complying with HUD Regulations (10314A). It is recommended that these courses not be taken consecutively.

Note: There is overlap between this course and Audits of HUD-Assisted Projects – Compliance Pitfalls (10214A). It is recommended that these courses not be taken consecutively.

Transform Your Busy Season with Technology Tools You Already Use!

T

his course is packed with practical “how to” time saving tips to help make the busiest time of year more productive by teaching you how to use your technology tools more efficiently and effectively. You will learn how to better manage your client and staff email communications so that important deadlines are not missed or follow up communications are not lost or forgotten. We will also demonstrate how you can save an hour or two each day by incorporating simple time management techniques that are available in the technology tools you use every day. You will also learn how to do a better job of reviewing, marking up and filing all of the PDF files, email messages and other documents and files that you work with day in and day out. This practical, easy to understand, and cost-effective course is a “must have” to prepare for the upcoming busy season.

(888) 557-4814 | www.scacpa.org

Learning Objectives Upon completion of this course, you will be able to: • Use time saving techniques to manage your schedule and email communications more efficiently.

• Explore simple and low cost ways to be more mobile so you can access your information and applications whether you are in your office or on the go.

• Apply best practices for using, reviewing, marking up and exchanging PDF files.

Major Subjects: • MS Outlook and Gmail - Better manage your communications and schedule with email, calendar and contact management time saving tips.

• Adobe Acrobat – Learn proven techniques to create, review and exchange electronic documents using Adobe Acrobat so you can develop a practical electronic work paper and report processing system.

• Excel – Learn how to make sure your spreadsheets are setup to eliminate common errors, update more efficiently, and be easier to review and understand.

• The role of tables – Learn when and how to supplement your PC with a mobile tablet for more efficient document and file management on the go.

• And much more!

Who Should Attend: Any accountant preparing for the upcoming busy season and looking for new ideas and ways to better manage your technology tools to save time and maximize productivity.

Date: January 7, 2014 Level: Basic Prerequisite: None Field of Study: Computer Science Credits: 8 hours Location: SCACPA Learning Center – West Columbia

South Carolina CPA Report

37

Classified

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BOA Update, continued from page 11 n Other CPE limits may apply, so you may want to review Regulation 1-08, which can be accessed on the board’s website.

You may also find the FAQ section of the board’s website to be of help in answering questions concerning CPE. While on the subject of CPE, the board now requires all licensees to complete six (6) hours of ethics CPE every three years, and those six hours must include two (2) hours in S.C. regulatory ethics. The first three-year-period runs from Jan. 1, 2013 to Dec. 31, 2015. At this time, the board is accepting two (2) courses that SCACPA offers, one from Professional Education

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South Carolina CPA Report

Services (PES), and more sponsors are beginning to submit S.C. regulatory ethics courses for the board’s approval. The board will be publishing additional South Carolina regulatory courses on the website once they are approved.

If you have questions about your CPE or any licensing matters, please feel free to call the board staff at 803-896-4770 anytime. n

Donald H. Burkett, CPA, serves as executive vice president of Burkett Burkett Burkett CPAs, P.A. in West Columbia. He is chair of the S.C. Board of Accountancy, having served on the board since 2003. He is a past president of SCACPA.

Accounting Practice Sales www.accountingpracticesales.com Inside Back Cover ADP accountant.ADP.com Page 29 American Pensions www.ampen.com Inside Front Cover Aon/BB&T Insurance Services/ AICPA Professional Liability Insurance Program www.cpai.com Page 4 CAMICO camico.com Page 15 CGMA www.cgma.org Page 33 Don West don@dpwcpa.com Page 21 John F. Hamilton, CPA JOHNFH@aol.com Page 18 NIQ NIX-taxlaw.com Page 9 PNC pnc.com/cashflowinsight Page 10 Richardson Plowden Attorneys at Law www.richardsonplowden.com Page 9 WebsterRogers, LLP www.websterrogers.com Page 31

Get Social

with SCACPA on Facebook, Twitter and LinkedIn! Visit www.scacpa.org/socialmedia (888) 557-4814 | www.scacpa.org

(888) 557-4814 | www.scacpa.org

South Carolina CPA Report

39

South Carolina Association of CPAs

PRSRT STD US POSTAGE PAID PERMIT NO. 1146 Columbia, SC

570 Chris Drive, West Columbia, SC 29169

S.C. Association of CPAs Your staff deserves the best training available but providing it can be a challenge.

Now you can bring top-quality programs directly to your office with the South Carolina Association of CPAs’ On-site Customized Training program. From technical topics to professional ethics to leadership and management courses, we can find a great fit for any organization and any budget.

Ask how you can get your On-Site Training Program started today! Contact Reva Brennan, MPA, CAE at (803)791- 4181 x103 or rbrennan@scacpa.org, or visit www.scacpa.org/onsitetraining.