CPA Report Third Edition 2010

CPA Report Third Edi tion 20 1 0

South Carolina Association of Certified Public Accountants

1,000 Points of Green  Corporate Sustainability 101  Building the Business Case for Sustainability  Practical Green: Small Business and Regional Firm Perspectives  SC Electric Cooperatives Asks “Is this 1% Renewable”  SCACPA Steps Into Sustainable Practices

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843-884-3912

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South Carolina CPA Report

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Greenville 864-245-8788 (888) 557-4814 | www.scacpa.org

CPA Report South Carolina Association of CPAs

South Carolina Association of Certified Public Accountants Magazine Volume 40, Third Edition 2010 Officers Charles E. “Eddie” Brown, CPA, President Timothy L. Baker, CPA, President Elect Michael R. Putich, CPA, Vice President Sharon E. Mann, CPA, Secretary-Treasurer Charles M. Redfern III, CPA, Past President BOARD OF DIRECTORS Clarence Coleman Jr., CPA, Ph.D. Alys Anne Dennis, CPA J. Bratton Fennell, CPA Malynda M. Grimsley, CPA Penny A. Lewis, CPA A. D. “Dave” Masters, CPA J. Patrick McDermott, CPA James W. McIlrath, CPA William C. Robinson, CPA L. Kent Satterfield, CPA Philip R. Snipes, CPA Michael J. Targia, CPA, CFA Robert M. Tilton, CPA Jada C. McAbee, CPA Beth T. Zamorski, CPA EXECUTIVE DIRECTOR Erin P. Hardwick, CAE EDITOR Katherine M. Swartz, CAE ASSISTANT EDITOR Allison K. Caldwell GRAPHIC DESIGNER Lisa S. McGee Contributing writers Reva Brennan, MPA, CAE, IOM Ronald J. Calcaterra William M. Grooms, PhD, CPA John F. Hamilton, CPA, CMA Erin P. Hardwick, CAE Mark T. Hobbs, CPA Anthony G. Masino, JD, CPA J. Patrick McDermott, CPA John J. Meindl Jr. Mark Riley Derrick B. Stark, CPA V. Carroll Webster, MBA, CPA 2010 Editorial Board Margaret L. Lattimore, CPA, Chair Ellen K. Adkins, CPA, MBA Charles E. Alvis, CPA, MPA, MBA John B. Brantley, CPA Jackie F. Breland, CPA Neil A. Brown, CPA, MAcc, CFP Amanda S. Colgate, CPA Lisa S. Cooke, CPA Malynda M. Grimsley, CPA Karen A. Hursey, CPA Lesley H. Kelly, CPA Marsha G. LePhew, CPA A. D. “Dave” Masters, CPA Derrick B. Stark, CPA Catherine B. Stoddard, CPA Victor C. Webster, CPA, MBA (888) 557-4814 | www.scacpa.org

Special Section: 1,000 Points of Green 11 12 14 17 20

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Introduction: Sustainability and the CPA Corporate Sustainability 101 Building the Business Case for Sustainability Practical Green: Small Business and Regional Firm Perspectives South Carolina Electric Cooperatives “Walk the Talk” on Energy Efficiency and Renewables SCACPA Steps Into Sustainable Practices Member Profiles: Meet Members of the Sustainability Task Force

In This Issue 26 28 34 35 36

Report on Spring 2010 Meeting of AICPA Council Essential Overview of Peer Review and Accounting Matters CPA Day at the State House Oath Ceremony Users New CPAs Into the Profession Health Care Reform Series, Part I

In Every Issue 5 6 8 24 27 30 32 39 42

From the President Association News On Your Behalf Member Profiles Board of Accountancy News Chapter Connections Member News Upcoming CPE Classifieds/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 the 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 the SCACPA. South Carolina CPA Report

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From the President

Reflections on the CPA profession, life, love and just about anything else that captures the interest of SCACPA’s 2010 President Eddie Brown

THE GREEN LIGHT

W

hile attending the AICPA Council meetings, I try to represent SCACPA properly and gather sufficient, timely knowledge of professional developments. As I perused the agenda of last fall’s Council meeting, I felt somewhat taken aback to see a session on sustainability. To be honest, I questioned the applicability of sustainability to the CPA profession. But as I kept an open mind about the subject, a light seemed to quickly turn on—the GREEN light. It soon became clear during the presentation that this issue is a win-win-win scenario. When businesses, organizations, communities and their constituents and stakeholders blend efforts to advance a positive social and ecological attitude with a profitable approach, all are winners.

“When businesses, organizations, communities and their constituents and stakeholders blend efforts to advance a positive social and ecological attitude with a profitable approach, all are winners. I challenge each member to consider being a positive part in providing One Thousand Points of Green across South Carolina.”

Upon my return, I was asked to pull together a sustainability CPE session for the 2009 CPA Summit & Tax Conference. With newfound enthusiasm I took on the challenge and was pleased to see such a good turnout for the 7:30 a.m. “early bird” session. The participation and interest shown was exciting and encouraging.

I asked the Executive Committee to allow for a Sustainability Task Force and received immediate support. Few committees or task forces have had so many volunteers at the onset. It is astounding to see the interest our members have for sustainability.

This task force has graciously responded to the market-driven aspects of the economic, social and ecological impact upon our (888) 557-4814 | www.scacpa.org

SUSTAINABILITY clients, organizations and communities. They are also working to bring awareness of pertinent issues before our membership. The Sustainability Task Force will soon be reporting to our board with recommendations of what we can do to help address this global issue professionally. I encourage each of you to keep an eye on their work.

There is also opportunity for SCACPA to share synergy with efforts of the AICPA and its committees working on the same issues. I have personally approached the chairman of the AICPA and asked that South Carolina be considered to have a representative at the global table. At the same time, we all need to guide our firms and organizations, employers and clients to step up and be on the leading edge of long-term sustainability.

There is great opportunity to make an impact and much work yet to be done. I have asked not only the Sustainability Task Force but also the board and other leaders to make 2010 a year of awareness.

Hopefully more CPAs will have their own green light turned on as a result of our efforts. I challenge each member to consider being a positive part in providing A Thousand Points of Green across our beloved state of South Carolina.

To be continued…for years to come. n

C.E. “Eddie” Brown, CPA SCACPA member since 1976 As shareholder of Swaim Brown, PA, Eddie practices in the areas of corporate and individual tax planning and strategy, international tax, business consulting, estate planning, business planning, M&A, succession planning, manufacturing, real estate and construction. Eddie is actively involved with AICPA, SCACPA, Estate Planning Council of Spartanburg and serves as trustee of the South Carolina Baptist Foundation.

Follow Eddie Brown as he blogs weekly, http://scacpa.org.wordpress.com

South Carolina CPA Report

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Deadline Approaching for 2010 Member Awards Nominations

Know a fellow CPA providing extraordinary service to SCACPA or the profession at large? Perhaps a fellow chapter member actively involved in chapter activities and your local community, or a young colleague who displays significant leadership qualities in the accounting profession? SCACPA is seeking Member Awards nominations for the 2010 CPA Summit & Tax Conference in November. Recognize and reward exemplary accounting professionals in South Carolina—nominate today! Deadline is September 1, 2010. For more information or to submit a nomination, visit www.scacpa.org/awards.

Erin Hardwick Honored as South Carolina Association Executive of the Year

The South Carolina Society of Association Executives (SCSAE) recognized SCACPA Executive Director Erin Hardwick, CAE as Executive of the Year at its fifth annual conference in June. SCSAE’s Executive of the Year Award is the highest honor for an association executive. This award is presented to those whose accomplishments have been outstanding; only 25 executives have been awarded this honor. Hardwick was honored by the SCSAE with a plaque and a signed concurrent resolution of the recognition from the SC Senate and House of Representatives.

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SCACPA: Best in the Business!

SCACPA recently received three Best in the Business awards from the South Carolina Society of Association Executives (SCSAE) for programs, projects, events and activities accomplished during 2009: • Best Magazine or Journal: The South Carolina CPA Report • Best Electronic Communications: 2009 CPA Summit Registration confirmation e-mail • Honorable Mention: www.scacpa.org Congratulations to Emily Allen and Katherine Swartz, CAE, who serve as staff team leaders for these member programs.

Staff Contact: Emily Allen

Share Your Financial Literacy Knowledge with GED Candidates

SCACPA is committed to helping all South Carolinians gain practical financial skills— and you can help! In April, the SCACPA Financial Literacy Task Force embarked on Project GED in an effort to make a basic financial skills presentation to all 50 GED programs statewide by October 31. The Common Sense for Your Dollars and Cents toolkit for members includes a presentation, student handouts and tips on corresponding with the teacher and students. A small time investment of less than five hours can provide a lifetime of reward for students in need in your area. Get involved at www.scacpa.org/ProjectGED. Staff Contact: Katherine Swartz

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Join a SCACPA Committee Today!

Over the past few years, SCACPA’s Board of Directors has made a commitment to becoming a more open organization that provides increased opportunities for participation. With that in mind, we are conducting an open call for interested and qualified individuals to contribute to the future growth and success of SCACPA. This is your opportunity to share your expertise and experience! As a committee or task force member, you will devote time, energy, and ideas to move SCACPA projects and programs forward as envisioned by the Board of Directors, and in turn, lead the profession in supporting a wide-range of efforts on behalf of our members, communities and CPAs across the state. Learn more at www.scacpa.org/Volunteer.

Seeking CPAs Specialty Areas

The Peer Review Program is in need of team members in a number of specialty areas. If you are interested in being a consultant to a peer reviewer but not necessarily performing peer reviews, we need you!

Staff Contact: Glenna Minor

Staff Contact: Reva Brennan (888) 557-4814 | www.scacpa.org

IRS & SC DOR Want to Hear from You The SCACPA Taxation Task Force will host their annual meeting with the Internal Revenue Service and South Carolina Department of Revenue Wednesday, October 27. During this meeting key staff of the IRS and DOR will address issues and concerns of the CPAs of South Carolina as provided in the annual survey.

This is an ideal opportunity to share the things you think the agencies are doing well as well asissues that they should address. A report of the meeting will be provided in the First Edition 2011 of theCPA Report.There you’ll find eight important questions and a chance to share what works, what doesn’t and areas in

which you’ve had reoccurring issues with these agencies. Participants can also enter a drawing to win a complimentary registration for the upcoming 2010 CPA Annual Summit and Member Meeting, November 11-12.

Three easy steps to having your concerns addressed!

1. Visit www.scacpa.org 2. Complete the online survey by Thursday, September 30 3. Read the First Edition 2011 of the CPA Report Staff Contact: Reva Brennan

Mark T. Hobbs CPA, Committee Chair

Timothy Baker

Michael Putich

Vice President Sharon E. Mann CPA

Advocacy Certification & Licensing Communications

n Recruiting & Education n Standards &

Performance

Reva E. Brennan, MPA, CAE, IOM, Associate Director Ext. 103, rbrennan@scacpa.org Sharon Mann

Malynda Grimsley

Karen M. Hancock, CPA, Finance Director Ext. 108, khancock@scacpa.org Glenna P. Minor, Peer Review & Member Services Manager Ext. 107, gminor@scacpa.org Katherine M. Swartz, CAE, Member Services Director Ext. 105, kswartz@scacpa.org

Mark Crocker

Dave Masters

Dave Masters, Second Term, 2011-2013

Note: Once elected by the membership as president-elect the individual moves automatically to president in the subsequent year, and therefore election to the position of president is not required.

April C. Cox, Education Manager Ext. 110, acox@scacpa.org Emily M. Allen, Communications Coordinator Ext. 106, eallen@scacpa.org

Robert Tilton, 2011-2013

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

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Erin P. Hardwick, CAE, Executive Director Ext. 104, ehardwick@scacpa.org

Secretary/Treasurer Malynda M. Grimsley, CPA At-Large Elections: Mark Crocker, Unexpired Term, 2011- 2012

OUR MISSION

SCACPA STAFF

SCACPA OFFICERS: President* Timothy L. Baker, CPA President Elect Michael R. Putich, CPA

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 support all CPAs – whether in public practice, industry, government or education – with lifelong learning opportunities necessary for their success and to promote high ethical standards and legislative advocacy for both the public good and the profession. We accomplish this mission through the following activities:

Report from SCACPA’s 2010 Nominating Committee South Carolina Association of CPAs officers serve for one year elected

by SCACPA membership with term beginning January 1, 2011.

SOUTH CAROLINA ASSOCIATION OF CPAs

Sandra P. Oxner, CMP, CMMM, Chapter & Special Events Coordinator Ext. 112, soxner@scacpa.org Robert Tilton South Carolina CPA Report

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The fifth annual CPA Day event was held in Columbia on April 28. It brought hundreds of people together and gained greater visibility for the CPA profession as a viable entity in the legislative arena. Read more and see photos on pages 34-35 and on www.scacpa.org/Facebook.

Legislative Report State Activities SCACPA proactively worked two main issues during the 2010 legislative session: 1) getting tax conformity passed earlier in the calendar year, and 2) assisting the SC Board of Accountancy in gaining greater independence in their operational affairs.

We were successful in getting stand-alone tax conformity legislation passed through the Senate, House and governor’s office earlier than ever (March 31); however, the goal is to get tax conformity legislation passed even earlier in 2011.

In a cooperative effort with several other professional regulating boards, SCACPA led

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2010 CPA Day at the State House

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The SCACPA board will meet August 5-6 in Beaufort for its annual strategic planning session. This two-day meeting will be facilitated by Maryland Association of CPAs Executive Director Tom Hood.

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President Eddie Brown led a discussion about the need for a Rapid Response Team for federal legislative action. There are frequent requests from the AICPA for state associations to weigh in on various legislative proposals, often with a quick deadline. The SCACPA Board appointed four members to serve on a Rapid Response Team: • R. Doug Crowley, CPA, CVA, Ford and Crowley, CPA, LLC, Legislative & Advocacy Committee member • Charles “Chuck” L. Talbert III, CPA, McAbee Talbert Halliday & Company, past Legislative & Advocacy Committee Chair • J. Pat McDermott, CPA, The Beach Company, SCACPA’s AICPA Council Representative • Jason C. Sweatt, CPA, Elliott Davis, LLC, 2010 Legislative & Advocacy Committee Chair

SCACPA staff will notify team members when federal legislative calls to action are received, and SCACPA’s board will stay attuned through real-time communication on opinions and actions needed.

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The SCACPA board of directors met April 28 in Columbia. During the meeting, past president Bob Baldwin, CPA, PFS, AEP, who chaired a task force to modernize the SCACPA Constitution and Bylaws, presented a final draft to the board. The project combined the Constitution and Bylaws into one document and updated various sections. The SCACPA board postponed approving the bylaws until members had the opportunity to comment.

Comments were accepted through electronic communications during June and July.

The board will review these comments and approve the final version at its August meeting.

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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.

The South Carolina Board of Accountancy passed new regulations effective June 25, 2010. Among various changes to existing regulations, the new provisions could impact your CPE, especially self-study.

For details on these changes go to www.scacpa.org/NewBOARegulations. the initiative to gain greater independence for our respective boards. The proposal received support from the House leadership and survived several committee hearings, but ultimately died on the House floor as debate raged over the state budget. Because the concern over how our Board of Accountancy is allowed to operate under the state agency of Labor, Licensing and Regulation, this will remain an issue going forward. We are revisiting our approach to resolving the concerns and will develop a strategy this fall.

Federal Issues Congress has kept the CPA profession’s lobbyists busy this year. SCACPA and other state associations are frequently asked to weigh in on federal legislation that could impact you as a practicing CPA. Among the legislation that SCAPCA has weighed in on include: • The IRS’s tax preparer registration proposal • The provision that would change how S corporation owners compensation is treated • The “aiding and abetting” provision in the financial service reform legislation

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

• Legislation that would require that the federal comptroller general be a CPA

CPA-PAC in Action The CPA-PAC trustees met May 7 to review all candidates running for the House of Representatives. The trustees focused on those who were facing strong primary opposition and carefully considered which candidates to support, taking into account their past support of business friendly issues as well as those affecting the CPA profession. The total contributed for primary elections was $8,750.

Receiving contributions from CPA-PAC Rep. Merita A. "Rita" Allison (Spartanburg) Rep. Don C. Bowen (Anderson) Rep. Robert L. Brown (Charleston) Speaker Pro Tempore Harry F. Cato* (Greenville) Rep. Richard E. Chalk, Jr.* (Beaufort) Rep. Daniel “Dan” T. Cooper (Anderson) Rep. Marion B. Frye (Lexington) Rep. Nelson L. Hardwick (Horry) Rep. James H. Harrison (Richland) Rep. R. Keith Kelly* (Spartanburg) Rep. Lewis E. "Gene" Pinson (Greenwood) Rep. J. Roland Smith (Aiken) Rep. William E. "Bill" Sandifer III (Oconee) Rep. F. Michael "Mike" Sottile (Charleston) * denotes those who did not win their primary race.

A sincere thank you goes to the following South Carolina CPAs who serve as Key Person Contacts and volunteered to handdeliver contribution checks to their local legislator: Caprice Atterbury, CPA John F. Camp, CPA Patrick P. Carey Jr., CPA Chris B. Benfield, CPA R. Keith Dooley, CPA, PFS James W. McIlrath, CPA Douglas A. Snyder, CPA W. Ashley Thiem, CPA Nancy O. Upton, CPA Robert D. Wade, CPA (888) 557-4814 | www.scacpa.org

In August, CPA-PAC Trustees will convene to consider potential contributions to candidates for state constitutional offices as well as candidates for the House with general election opposition. Contributions to candidates help SCACPA and the profession connect with key policy-makers. It’s part of all-important relationship-building for a time when those relationships may be needed to protect the CPA profession. Generous donations given by individual members and CPA firms are the sole means by which SCACPA can show its support of certain legislators. Some 240 (seven percent) of SCACPA members have donated more than $13,000 to the CPA-PAC in 2010.

Firms which have donated a cumulative total of $10,000 in 2010: Derrick, Stubbs and Stith, LLP Dixon Hughes PLLC Elliott Davis, LLC McAbee Talbert Halliday & Company Schmoyer and Company, PC Scott McElveen, LLP WebsterRogers LLP Thank you to each and every member and firm who acknowledges and supports this important process!

Three New Conferences Draw Enthusiasm SCACPA’s Board President Eddie Brown has charged committees, chapters and staff with achieving a “wow” this year in our respective areas. As a result, in the area of CPE, three new conferences will launch this year: 1. Nonprofit Conference: Held April 29 in partnership with the SC Association of Nonprofit Organizations. More than 100 people attended the conference, which exceeded attendance goals.

2. Emerging Leaders Conference: September 23-24 (Charleston). Planned and hosted by SCACPA’s Young CPA Leadership Cabinet.

3. Women in Leadership Conference: October 28 (Columbia). Features sessions on leadership and includes a Women to Watch recognition program. n

Erin P. Hardwick, CAE has served as SCACPA’s executive director since 2005. She has more than 25 years of experience in association and non-profit executive leadership and is one of 18 Certified Association Executives in South Carolina, the highest credential in the association management profession. She currently serves on the SC Secretary of State’s Nonprofit Advisory Council, the Saluda Shoals Park Foundation Board of Directors and the SC Council on Economic Education Board of Directors.

2011 SCACPA BOARD NOMINATIONS Notice of Annual Business Meeting The annual business meeting of the SC Association of Certified Public Accountants (SCACPA) will take place on Thursday, November 11 from 8:008:45 a.m. at the Embassy Suites Hotel in Columbia.

The business meeting will include a membership vote on: • Minutes from the 2009 business meeting; • review and approval of the 2011 operational budget; • and, the election of officers and directors.

All members are encouraged to participate.

The report of SCACPA’s 2010 Nominating Committee for the election of officers and at-large board members follows.

The report of SCACPA’s 2010 Nominating Committee for the election of officers and at-large board members is featured on page 7.

South Carolina CPA Report

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People, Planet & Profit | SUSTAINABILITY and THE CPA

SPECIAL SECTION: 1,000 Points of Green  Introduction: Sustainability and the CPA, page 11  Corporate Sustainability 101, page 12 

Building the Business Case for Sustainability, page 14

“CPAs have an important role to play in sustainability. In addition to their widely recognized expertise in measurement, accounting, reporting and assurance, CPAs in business are best able to connect the dots between strategy, risk,

 Practical Green: Small Business and Regional

Firm Perspectives, page 17

financial performance and reporting.”

 South Carolina Electric Cooperatives on Energy Efficiency and Renewables, page 20  SCACPA Steps Into Sustainable Practices, page 22

– Carol Scott, AICPA Vice President for Business, Industry & Government

 Member Profiles: Meet Members of the

Sustainability Task Force, page 24 SUSTAINABILITY AND THE CPA It is without debate that business operates in a global environment. Sustainability is having an impact on the definition and practice of accounting and the accountant’s role, perhaps more so than any other business or legislative initiative. Until now, the primary role of CPAs in the area of sustainability has been focused upon collecting, analyzing and reporting on sustainability-related information for internal and external usage.

The role of CPAs as it pertains to sustainability is expected to dramatically increase in the areas of accounting, reporting, assurance and management. It is a topic of great interest and opportunity, marked by 16 professional bodies and representing a significant share of the world’s chartered accountants who provide their seal of approval to the principles of Accounting for Sustainability Forum. It is not a matter of if, but when U.S. accounting practices will adopt sustainability guidelines.

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

South Carolina CPA Report

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People, Planet & Profit | SUSTAINABILITY and THE CPA

Corporate Sustainability 101

by John J. M eindl, Jr.

T

his is the first of a two-part series that will address the concept of corporate sustainability and its relevance to business and the accounting profession. The first part defines and makes a business case for sustainability.

The second part, to be included in the fourth edition of The CPA Report, will provide framework to define, measure and implement sustainability as well as insights into the role and future of sustainability as it applies to CPAs.

WHAT IS SUSTAINABILITY? John Meindl is a senior fellow in the Center for Corporate Learning and Development and an adjunct professor at Furman University.

He is a board member of several companies and a managing partner in a private investment firm where he actively educates and encourages the consideration and deployment of sustainable business initiatives to garner strategic advantage. Meindl will be presenting a CPE session entitled Sustainability and the CPA at five of the nine SCACPA Professional Issues Updates this fall.

A simple question, but the answer can result in numerous definitions or even blank stares.

The multiple definitions provided within this article are not due to a misunderstanding of the topic—quite the opposite. In fact, these definitions can be derived from the multiple uses of sustainability by individuals, groups or organizations. Sustainability can, therefore, have a variety of contextual meanings that relate to economic, agricultural, community and business development as well as personal lifestyles.

This is perhaps why a single definition is lacking that permeates the sustainability “industry.” Furthermore, growing use of the term around the world has resulted in broadened interpretations by politicians, business professionals and the media.

THE FOUR Es Among the variety of practitioners and their inherent definitions, four common areas seem to be addressed: 1) Environment and Ecology; 2) Economy and Employment; 3) Equity and Equality and 4) Education.

Within each of these areas are common themes relating to living within limits, understanding interconnections between economy, society and the environment, and equitable distribution and management of resources and opportunities. In terms of business, Corporate Sustainability is seen as more of an evolution of the traditional ethical corporate behavior

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known as corporate social responsibility (CSR)1. Predominated by philanthropy and volunteerism, Corporate Sustainability is increasingly superseding traditional definitions and practices to include all business practices built around social and environmental considerations.

INFLUENCING THE DEFINITION Attempts to define Corporate Sustainability have been influenced by two key sources.

The first was the 1987 United Nations World Commission on Environment and Development report titled Brundtland Commission2 Our Common Future3.

This report related sustainability directly to corporations and the economy by coining and defining the term sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

The second was the Triple Bottom Line concept cited by John Elkington in 19994: “…business goals were inseparable from the societies and the environments within which they operate. While short-term economic gain could be chased, a failure to account for social and environmental impacts would make those business practices unsustainable.” Though both of these principles sound practical and even logical as they apply to helping define Corporate Sustainability, the business community has realized that they are not easy to apply to a workable definition because they are simply not easy to measure and appear at times to be more qualitative than quantitative.

A WORK IN PROGRESS The definition of Corporate Sustainability continues to evolve, and there appears to be two common categories of application today. There are those who define and practice Corporate Sustainability as a program (reduce, reuse, recycle). This can be construed as more of a “feel-good”

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

definition. Though there is economic and social value in these types of programs (usually marginal), businesses in this program-driven category do so more from the perspective of something nice to do or have.

Sustainability Defined Merriam-Webster: “1. Capable of being sustained. 2. Of, relating to, or being a method of harvesting or using a resource so that the resource is not depleted or permanently damaged. 3. Of, or relating to, a lifestyle involving the use of sustainable methods.”

The second group includes those who not only want to feel good, but actually measure good as it pertains to business impact. Corporate Sustainability for these practitioners is defined more as a business process or strategy. Corporate Sustainability involves the concept of eco-efficiency through the reduction of costs and coststructures, and creates long-term stakeholder value. This strategy is accomplished through consideration of the interrelationship between the environment, economy and society. Sustainability is defined and practiced as a basis from which to innovate, improve productivity, reduce risk, generate revenue, build brand, increase corporate valuation and positively impact society— which may be defined as measuring goodwill. n

Global Footprint Network5 (www.footprintnetwork.org): “It is based on the recognition that when resources are consumed faster than they are produced or renewed, the resource is depleted and eventually used up. In a sustainable world, society's demand on nature is in balance with nature's capacity to meet that demand.”

Dow Jones Sustainability Index6: “Corporate Sustainability is a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments.”

PricewaterhouseCoopers7: “Aligning an organization’s products and services with stakeholder expectations, thereby adding economic, environmental and social value.”

References 1: http://en.wikipedia.org/wiki/Corporate_social_responsibility; 2: www.un.org/documents/ga/res/42/ ares42-187.htm; 3: http://worldinbalance.net/intagreements/1987-brundtland.php; 4: www.johnelkington. com/TBL-elkington-chapter.pdf; 5: www.footprintnetwork.org; 6: www.sustainability-indexes.com/07_htmle/ sustainability/corpsustainability.html; 7: www.pwc.com/gx/en/sustainability/index.jhtml

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South Carolina CPA Report

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People, Planet & Profit | SUSTAINABILITY and THE CPA

Building The Business Case for Sustainability

by John J. M eindl, Jr.

T

he business case for sustainability can be argued from both negative and positive rationales. Given the fact that business operates in a finite world, it can be positioned simply as a case for business survival—although business models and inherent practices are linear in nature. Certain resources are in decline, while the market for and associated consumption of those resources is still growing. This business case is based on a “not if, but when” scenario. It is a negative business case or rationale.

sustainable business process can amply demonstrate significant achievements and bottom-line results. Those who do not implement sustainable processes can also demonstrate those same achievements and significant results. Businesses who ignore or limit their efforts for sustainability usually believe that current social constraints trying to be placed on human activities as well as ecological limits are temporary roadblocks to progress. They may also believe these obstacles can be overcome with better science or technology.

On the other hand, sustainable business practices implemented in a variety of industries are providing bottom-line results.

This is a positive business case or rationale.

Case studies are heralding various forms of return being realized from sustainability: n Operating cost re-structuring and reduction n Operating risk and liability management n Product/service innovation n Brand integration and reputation value n Development of new markets n Increased employee morale n Safety

On the other hand, businesses who implement sustainability as a key business strategy do so because they truly believe in the existence of inviolable laws of nature.

They understand and believe human actions must conform and comply with nature, or otherwise suffer eventual consequences.

For these organizations, it is not only an internal operating belief but also a market perspective. The key to a successful business case for sustainability is deeply rooted in beliefs about the future, not the facts of yesterday that can influence business today. Many studies and analyses have been conducted on successful companies that have and are making sustainability part of their corporate DNA. Upon close examination of these companies are found the attributes of leadership, insight and courage.

ONE SIZE DOES NOT FIT ALL Though many successful business case examples appear logical and enticing, it is important to know recognize that one size does not fit all. Examples of success are sometimes easily deemed best practices and, as a result, copied blindly. Every organization has its own set of drivers— strengths, dependencies, weaknesses, etc.—in terms of distinguishing values from initiatives, especially new ones. The rewards may not translate from one business to the next. Organizational drivers need to be understood and rationalized in any sustainability business case.

A business case for sustainability based on achieving long-term, or systemic, success has to be rooted in more than statistics or logic. Many organizations who implement

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As the data shows, the business case for sustainability pursued more from the perspective of opportunity (positive) than survival (negative) is compelling and worthy of analysis and pursuit. If one is simply waiting on another’s business case instead of making their own, it may be too late. As Microsoft’s Bill Gates stated, “If you can show me a business case, you’re too late.”10 Businesses in pursuit of opportunity are given chances every day to influence and create their own future—it is a matter of perspective, vision and decision making. n

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2010 Professional Issues Update Series

Companies Do Well by Doing Well

O

ver an 11-year period, a Harvard University study1 on the concept of stakeholder management found socially responsible and sustainable corporations had sales growth four times and employment growth eight times that of “shareholder first” companies.

The Dow Jones Groups Sustainability Index (DJGSI) performed a five-year study2 in which they found companies engaged in sustainable business practices averaged 36.1 percent better than the traditional Dow Jones Group Index.

The report found that “sustainability strategies had a significant impact on the cost of external financing, return on invested capital, sales growth and the fade-rate of a firm’s competitive advantage.”

Goldman Sachs’s research3 found that companies that are considered leaders in environmental, social and governance (ESG) policies also lead in stock performance by an average of 25 percent.

Kholberg, Kravis, Roberts & Company (KKR)4, a global alternative asset management company states that “the business case for environmental management has never been stronger.”5 In fact, KKR is expanding its Green Portfolio Program6 to cover 20 percent of the companies in its portfolio.

Carlyle Group7, one of the world’s largest private investment firms, has teamed up with the Environmental Defense Fund8 to create EcoValue Screen9, a method Carlyle can utilize in undertaking due diligence pertaining to perspective investments.

References 1: www.hks.harvard.edu/m-rcbg/CSRI/publications/workingpaper_10_ kytle_ruggie.pdf; http://hbswk.hbs.edu/item/5859.html; www.cim. sfu.ca/pages/resources_shouldnt.htm; 2: www.corostrandberg.com/ pdfs/Business_Case_for_Sustainability_21.pdf; 3: www.thecro. com/?q=node/490&spesh=printme; 4: www.kkr.com/index.cfm; 5: www. kkr.com/releasedetail.cfm?ReleaseID=389022&KeepThis=true&TB_ifra me=true&height=461&width=592; 6: www.kkr.com/new_initiatives/ edf_partnerships.cfm ; 7: www.carlyle.com/; 8: www.edf.org/ http://blogs. edf.org/innovation/category/partnerships/page/2/; 9: http://blogs.wsj.com/ privateequity/2010/03/18/carlyle-group-teams-up-with-edf/; 10: http:// blogs.natlogic.com/friend/2010/03/making_the_business_case_for_s. html

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People, Planet & Profit | SUSTAINABILITY and THE CPA

Practical Green: The Small Business Perspective

by D er r ick B. Star k , CPA SC ACPA memb er since 1996

A

s small business owners, environmental sustainability sometimes seems distant because it would seem to require a grandiose effort in which the ultimate success or failure is not closely tied to our specific contributions. As owners of a home medical equipment consulting and billing company with ten employees, my partner and I have found it easier to build meaningful sustainable programs in our office when, instead of thinking of environmental matters as a singular issue, we consider them in the context of our business, our community and our existing values. We call it “practical green.”

REUSE Like a lot of small business owners, we started a small consulting practice in a niche market with little more investment than blood, sweat and tears. As we opened our first office, we needed desks and filing cabinets and all of the other stuff you take for granted when someone else buys it. Given the budget of a start up, we followed the newspaper classifieds for used office furniture, and kept an eye out for any other source of previously owned (less expensive) alternatives. We only bought solid furniture that was in good shape and looked either new or purposefully vintage, gaving our first office a decidedly warm vibe.

We were not, admittedly, thinking of all of the stuff we were keeping out of landfills or the overall waste stream at the time. The fiscal limitations that governed our business, however, contributed to our culture today and created a fantastic byproduct: the importance of reuse. We actually liked the thrill of the hunt— purchasing new stuff seemed almost like a cop out. I bought my first desk from the garage of a retired insurance agent; I actually had to help him move his wife’s pottery supplies to get to it and load it into my trailer. It was more than 20 years old when I bought it, and I still use

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it today. Over the years, we have purchased used desks, school house-sized white boards, filing cabinets, reception area furniture, framed pictures and other decorative elements, all of which would have likely ended up in a landfill somewhere.

REDUCE Over the last decade or so, paperless or paperreduced offices have become a ubiquitous example of sustainable initiatives aimed at reducing the energy and natural resources associated with paper consumption. That was the last thing on my mind, however, when I put a second monitor on each workstation in my office. Instead, I was more worried about how much time my staff, otherwise billable between $50 and $200 an hour, were spending going back and forth to the network printer. So in our usual style, we looked for monitors of the same make and model as those we already had (some used) on eBay and other online retailers. Our initiative took about two months to complete, but in the end, every workstation had matching dual monitors and we spent surprisingly little money. We also reaped the following benefits: n Security protocols improved. We encrypted our client files and expanded our disaster contingency in ways that were just not possible with paper files. We also installed a fax server so that incoming faxes were forwarded directly to recipients rather than sit in the open on a fax machine for any passersby to peruse. n Client service improved. When clients called, our staff was able to pull up files and knowledgeably discuss specific engagement matters before the greetings and small talk were concluded.

Not to mention, we also went from using eight to ten cases of paper per month to about three cases per calendar quarter.

RECYCLE Some green initiatives are less about direct cost savings and more products of our culture. To understand our commitment to our aluminum, plastic and non-confidential paper recycling program, one must understand a little about my partner. I would not describe her as a “greenie,” but she is practical. To her, it is nonsense to throw away aluminum and plastics because it is as easy to recycle them as to not do so. We simply default to recycle. The problem is that, unlike our first office space, there is no recycle service available to our new building. I thought our move might be the end of our recycling program, but I was wrong.

Being practical green, my staff decided to bag up the recycle bin each week and put it in the back of my truck so I could put it out with our recycling at home.

Practical green is not always about shrewd cost savings, but it is about considering the environmental elements of operating a business and nurturing its profits and culture. We are fortunate in this day and age to have access to the information and services that allow us to make sustainability good business and not just a moral consideration. As you read the great ideas and information in this publication and elsewhere, start with the things that you already do and how new ideas and suggestions can enhance your business as well as the community and the globe. Try practical green. n

Derrick B. Stark, CPA, CVA is managing member of ClaraVista LLC, a reimbursement and consulting firm serving home medical equipment suppliers throughout the US. Derrick’s areas of expertise include data analytics and application development. He is past chair of the SCACPA Young CPAs Committee is serves on the Editorial Board. Derrick may be reached at derrick@claravistallc.com.

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People, Planet & Profit | SUSTAINABILITY and THE CPA

Practical Green: The Regional Firm Perspective

by V. Car roll Webster, MBA, CPA SC ACPA member since 1975

A

ICPA has an ongoing sustainability initiative which, among other things, encompasses being environmentally friendly. This is not intended to take positions on more controversial issues. We as CPAs deal with ordinary issues daily that, by a slight change in behavior, could be a statement of our recognition of the need to make the best use of the earth’s resources. Some efforts yield a by-product that is more resourcefriendly—such going paperless in much of what we do, including file retention. Many firms, companies and governmental entities have gone through or are considering “less paper initiatives,” the thrust of which is to gain efficiencies available through the use of on screen review, electronic files, etc.

The byproduct is more deliberate use of paper. Our behavior in many cases is already adjusted to the point that it seems almost unusual at times to hear someone printing or copying a large job.

Here are a few practical suggestions for modifying behavior, much of which is already in place in many organizations.

PAPER AND OTHER CONSUMABLE PRODUCTS n Eliminate Styrofoam or plastic cups.

Find reusable replacements. Don’t use paper or plastic plates and utensils when it can be avoided. n Recycle aluminum, plastic, paper and magazines. Provide convenient collection boxes and arrange for a collection service.

Subscribe to e-publications and eliminate former staff and duplicates from mailing lists. n Increase the use of recycled paper and other products. Buy with that intention when possible.

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n Further reduce the use of paper that results in more shredding. Think twice before printing. n Determine how the shredding service disposes shredded paper. Is it done in an environmentally friendly way? If not, consider other companies. n Print on both sides of the paper when that is plausible. n Consider the use of a fax server as a means of receiving but not printing faxes. n Use whiteboards or projection equipment to present meeting agendas rather than printing them. n Use forms available electronically for internal communication such as for vacation requests, expense reports, CPE requests, etc. n If you are in public practice, ask clients whether they want the information electronically or on a thumb drive. Don’t assume a client wants a printed copy of their tax return, or provide only upon request.

Electricity n Consider using laptop computers rather than desktops. Laptops tend to be more power efficient and provide greater mobility. n New computers, monitors and applicances are generally more energyefficient than older versions. Donate older equipment to local charities, many of which will pick equipment from your office. n Turn off unnecessary equipment and lights when you leave the office for the day or for an extended period of time. Be sure to develop an internal policy regarding turning off or sleep modes for computer workstations. n Integrate energy-efficient light bulbs and remove light bulbs that are not in use. n Do not use portable heaters or fans unless there is a confirmable ineffectiveness in the ability of the central system to heat or cool your area.

TRAVEL n Before travelling, think about whether you can handle the matter with a phone call or e-mail. n When you travel to meetings or other events, car pool with others when you can.

OTHER CONSIDERATIONS n Consider limiting or eliminating the use of bottled water. Tap water is usually fine, or consider a filtered water service. n Recycle ink cartridges and batteries.

Set up collection boxes for ink cartridges from home that you wish to recycle. Some office supply stores will give a credit on the purchase of ink cartridges when empties are brought in for recycling. n Buy eco-friendly soap, dish washing detergent, etc. Eliminate aerosol products from the office.

These are but a few ideas that do not require additional spending but result in savings in most circumstances. We believe these practices are not about political statements or cost-benefit studies, but about being good stewards of the resources we depend on in our profession and being practical with their use. Slight modifications in our behavior may yield disproportionate results. n

Carroll Webster has served as Managing Partner of WebsterRogers LLP for some 24 years. Formerly, he was an associate professor at Francis Marion University. Webster has been active in the CPA profession both nationally and in South Carolina. He is a past president of SCACPA and served six years as South Carolina’s elected representative on the Governing Council of the American Institute of CPAs.

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“I’VE GOT AN UNEASY FEELING ABOUT THIS CLIENT SITUATION” Based on an actual conversation between a Senior Partner at a CPA firm and a CAMICO Risk Management Specialist.

CPA: So, my staff member recently noticed some irregularities in the trial balance provided by my client’s bookkeeper. When I brought this to my client’s attention, he reacted very negatively – asking how we could have missed this before, implying it was somehow our fault. I didn’t know what to say – I’m sure we’ve met professional standards and our workpapers should support that.

What can I do?

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CPA: Really!? I thought following the rules would keep me safe.

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Do you have an engagement letter for this client?

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People, Planet & Profit | SUSTAINABILITY and THE CPA

Is this “1% Renewable”?

SC Electric Cooperatives ‘Walk the Talk’ on Energy Efficiency and Renewables

by R onald J. Calcater r ra, President and Chief Executive O fficer, Central Elec tr ic Power Cooperative, I nc.

Ronald J. Calcaterra is president and chief executive officer of Central Electric Power Cooperative, Inc., South Carolina’s generation and transmission electric cooperative, headquartered in Columbia. He has served the company and the members of South Carolina’s electric cooperatives for more than 30 years.

E

nergy efficiency and renewable energy became media buzzwords in recent years, but they’ve been the talk—and the walk—of South Carolina’s electric cooperatives for at least a decade.

About 1.5 million South Carolinians in all 46 counties use power delivered by 20 electric distribution cooperatives. Central Electric Power Cooperative purchases and transmits power on behalf of all 20 co-ops.

Collectively, Central’s member co-ops build and maintain the state’s largest power distribution system, with more than 70,000 miles of power line covering 70 percent of South Carolina.

Today, cooperatives are responding to the desire to reduce greenhouse gas emissions quickly and the growing demand for power.

Some people say we can meet demand through efficiency and renewable energy.

The reality is we need all the efficiency and renewable energy we can get, as well as all the electricity we can get from traditional sources. And we must deliver this power to South Carolinians at a price they can afford.

WHY EFFICIENCY MATTERS Experts predict a 30 percent increase in the demand for electricity by 2030. This demand comes at a price to consumers’ wallets and the environment. A 600-megawatt (MW) plant generates enough electricity to power more than 400,000 homes. The cost to build a plant generating this much electricity is approximately $1.5 billion for a coalfired plant, $3 billion for nuclear and $400 million for natural gas. Consumers pay to have these plants built through their monthly electric bills. These plants also impact the environment: a 600 MW coal plant adds four million tons of CO2 to the atmosphere each year.

WHAT CO-OPS ARE DOING In 2007, S.C. co-ops committed up to 1.1 percent of their wholesale power costs (approximately $12 million per year) to invest in renewable energy and energy

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“A co-op commissioned study that year found that renewable resources could potentially produce enough energy to meet the energy needs of 13 to 18 percent of the co-op members in the state.” efficiency projects. A co-op commissioned study that year found that renewable resources could potentially produce enough energy to meet the energy needs of 13 to 18 percent of the co-op members in the state. Yet, even at this point, the co-ops had already been supporting one form of renewable energy for several years.

GREEN POWER In 2001 some co-ops began marketing Green Power1, the first renewable energy program for consumers in the state, in cooperation with Santee Cooper. The state-owned utility produces most of the power used

by South Carolina’s electric cooperatives.

Today, all 20 distribution co-ops in South Carolina give their members the opportunity to purchase Green Power. Santee Cooper generates Green Power at five landfill generation plants around South Carolina.

Naturally occurring methane, a potent greenhouse gas, is captured for use as fuel.

In general, Green Power facilities are more expensive to install than power plants that generate electricity using traditional fuel sources such as coal. Members who chose to support the program pay a higher price for it than for conventional service. All of the added revenues collected as part of the Green Power program go to offset the higher cost associated with generating this power.

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Statewide, more than 3,600 residential members purchase the higher-cost Green Power.

EFFICIENCY FIRST While alternative energy sources show promise, Central’s leadership recognized early on that promoting energy efficiency was a sure-fire, here-and-now way to help members cut energy costs and power plants cut emissions. The “low-hanging fruit” in the energy-efficiency orchard was lighting, which accounts for about 10 percent of the average home’s energy consumption. What’s more, cost-effective technology already existed—such as energy-efficient compact fluorescent lighting (CFLs)—to lighten the co-ops’ lighting load. CFLs use 75 percent less energy than standard incandescent bulbs and last up to ten times longer.

In 2008, S.C. co-ops began the Do the Light Switch2 program distributing CFLs to co-op members. By the end of 2010, co-ops will

have distributed more than two million CFLs to residential consumers. In one year, those two million CFLs could save over 114,000 megawatt-hours—enough to power almost 10,000 homes and reduce CO2 emissions by over 200,000 tons. When the CFL program is completed at seven million CFL’s, we expect to reduce total energy requirements by more than two to three percent of current levels. This represents a savings of $20 to 30 million per year to S.C. cooperative members.

SEEKING SOLUTIONS Do the Light Switch was just the beginning.

The co-ops received a $3.4 million grant this year from the state Energy Office for a Residential Energy Efficiency Pilot Program.

The pilot will examine energy efficiency alternatives to determine which gets the most bang for the buck. These alternatives include roofing and other weatherization of mobile homes, installation of energy efficient appliances, and the installation of solar water heaters. Energy usage data will be obtained before and after each program to determine the cost benefit ratio. The program will be expanded for those programs that show promise in achieving energy savings at the lowest cost.

HELPING MANY HOUSES These efforts would build on the success of the S.C. co-ops’ Help My House contest, held late last year.

Seven electric co-op families won up to $10,000 in home energy efficiency upgrades in the contest, with winning homes receiving new heating/air conditioning units, insulation, water heaters and more. To help spread this important message, one television station in each of the state’s seven broadcast markets covered the home makeover in their area.

HelpMyHouse.org showcases the homes’ increased efficiency while a cover story in South Carolina Living3

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magazine delivered the lessons learned to more than 450,000 homes served by the state’s co-ops.

LEADING BY EXAMPLE This spring, Sen. Lindsey Graham and Congressmen James E. Clyburn and John Spratt introduced legislation establishing a nationwide Rural Energy Savings Program modeled on the S.C. electric cooperatives’ plan to save their consumers money on their utility bills with energy conservation improvements. The bipartisan legislation, which has drawn praise in Newsweek and other national media, would provide $4.9 billion in lending authority through the Rural Utilities Service at the U.S. Department of Agriculture to provide energy-efficient upgrades for participating consumers. Those improvements will be paid for through energy savings spread across monthly payments on participating consumers’ utilities bills. The legislation represents a fiscally-sound approach to energy financing as every dollar loaned by the co-ops will be repaid to the taxpayers within 10 years.

Estimates show the program will create 20,000 to 40,000 new jobs annually nationwide for utility auditors and personnel trained in installing energy-efficient products. In South Carolina, 2,100 jobs are expected to be created in just the first year. Those jobs will continue to increase to an estimated 4,750 permanent jobs due to ongoing savings. n References 1: www.scgreenpower.com; 2: www.dothelightswitch. com; 3: www.ecsc.org/livinginsc Editor’s Note: Special thanks to John B. Brantley, CPA, CFO of Central Electric Power Cooperative and Editorial Board member, for his involvement in this article. A member of SCACPA since 1990, Brantley previously served as chairman of the SCACPA Members in Industry Task Force.

South Carolina CPA Report

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People, Planet & Profit | SUSTAINABILITY and THE CPA

What Is J SCACPA Doing?

Members, Planet and Profit: Sustainability & Your Association

ust like many of our member firms and organizations, SCACPA can benefit from the triple bottom line microscope. Our 200plus conferences, seminars and events can also become more sustainable through implementing international green meetings standards. Following the direction of the Sustainability Task Force, SCACPA established an internal, voluntary Green Team with three primary goals: 1) immerse ourselves in resources for small businesses and green meetings, 2) become a certified green business and 3) make plans for implementing international green meetings standards and additional benchmarks.

by K ather ine Swar tz, C AE S er ving SC ACPA since 2006

Katherine Swartz, CAE is SCACPA’s member services director, co-staff liaison to the Sustainability Task Force, staff leader of the SCACPA Green Team and managing editor of The CPA Report. With more than ten years experience in the association management and non-profit sectors, Katherine is a Certified Association Executive, the highest credential in the association management profession.

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South Carolina CPA Report

While completing our research and education, we have shared many resources with members on the web site Sustainability page. We encourage members to also share resources with us to continue to develop our knowledge center. As stewards of the environment, SCACPA has completed the application to become a Lexington County Certified Green Business. The fourpart certification process involves a focus on preserving South Carolina’s natural resources via waste reduction and recycling, energy efficiency, water conservation and enhanced air quality.

As part of the certification process, SCACPA developed and signed an “Ecological Footprint Pledge,” available for download at www.scacpa.org/Sustainability.

SCACPA is “going green” at its CPE seminars and other events by offering electronic materials for a discounted registration fee, eliminating bottled water, providing recycling stations and reducing printed marketing materials, registration forms and signage for events. Plans are in place to conduct an energy audit at SCACPA’s headquarters and implement the applicable Lexington County Green Business program suggestions we have not yet achieved.

In these efforts, we realized there are so many opportunities to improve SCACPA’s sustainable practices. Better still, there is a new “green morale” in the office, which has improved an already-strong team and empowers us to share our knowledge with our members, families and communities. Join us and your fellow members in tackling this new frontier for the profession in South Carolina!

Introducing the SCACPA Sustainability Task Force Under direction of Rich Waycaster, CPA, the new task force has eight members and has divided its projects into three primary areas: TECHNICAL STANDARDS &ADVOCACY n Climate Change Reporting Standard: compose educational piece on how this will affect our profession. n Research and follow developments in other service industries as well as state and national CPA organizations. n Monitor and catalog reporting and assurance guidance and standards, regulatory/legislative alerts and tax credits/ opportunities. n Become a resource for information regarding certification, measurement and verification, including industry-specific topics. n Identify and track “hot areas.” n Identify South Carolina CPA service offerings in consulting, assurance, tax and niche fields.

1,000 POINTS OF GREEN PROGRAM n Research and endorse a green program for small business. n Guide SCACPA’s internal green initiative. n Provide tools, checklists and implementation strategies for members. n Monitor and report impact of green initiatives on South Carolina’s economy. n Develop recognition tactics such as “Green Business of the Year” or “Green CPA Firm of the Year.”

AWARENESS AND PROMOTIONS n Develop and maintain online content including resources, links and hot issues. n Design brochures for educational awareness. n Promote 1,000 Points of Green Program. n Promote and schedule relevant CPE for SCACPA members. n Promote university and other resource programs available to members.

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

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If you’re interested in referring a prospective trust client to First Federal, please call one of our trust officers today.

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Member Profiles Richard “Rich” E. Waycaster, CPA

CFO, Elliott Davis, LLC SCACPA member since 1984

Focus On Membership

Meet Members of the Sustainability Task Force Compiled by K ather ine Swar tz, C AE

Hometown: Greenville, SC SCACPA Involvement: 2010 Chairman, Sustainability Task Force; 100% Membership Firm

In early 2010 SCACPA created the Sustainability Task Force—a proactive approach to remain at the forefront of accounting and reporting on sustainability issues. CPAs in all segments of our

Stacy F. Smith, CPA

Vice President of Finance, South Carolina Manufacturing Extension Partnership (MEP) SCACPA member since 2002 Hometown: Adrian, MI SCACPA Involvement: Information Technology Committee; Co-Chair of Young CPAs Task Force and founding member of the Young CPAS Leadership Cabinet; CPA Ambassador; Women to Watch Awards Committee; Sustainability Task Force. Discussion leader at 2004 Tax Conference and 2003 Government and Non-Profit Conference.

Michael S. Upton, CPA

President, Upton & Upton, CPA, PA SCACPA member since 1981

Hometown: Edenton, NC (born); Beaufort, SC (raised); Piedmont, SC (reside) SCACPA Involvement: Key Person Contact; Sustainability Task Force; past member of Information Technology Committee, Continuation of Practice Committee and MAS/Technical Information Committee

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South Carolina CPA Report

profession will be integral in developing these requirements and helping their clients or industries implement sustainable initiatives.

Managing the “triple bottom line”—people, planet and performance— will soon become a common task in all of our careers.

WHY ARE YOU SERVING ON SCACPA’S SUSTAINABILITY TASK FORCE? Waycaster: As CPAs, I believe we each have an obligation to give something back to the profession. Since I have a personal interest in sustainability, it is a great opportunity for me to serve.

Smith: To continue to be an active member in SCACPA and to serve in an area that I am personally interested in and want to learn more about.

Upton: I have always been interested in environmental issues. This task force provides easy access to online resources concerning corporate and professional responsibilities for our planet, our economy, our business endeavors and their inter-relationships.

WHY IS THERE A NEED FOR A SCACPA-LED SUSTAINABILITY INITIATIVE? Waycaster: Sustainability impacts CPAs in all areas—public practice, industry, government and education.

This initiative contributes to fulfilling SCACPA’s mission of helping its members succeed by keeping them abreast of relevant trends and topics, along with associated opportunities and challenges.

Smith: Sustainability is a hot topic.

Many companies are focusing on their environmental impact, social responsibility and how this will have economic effects.

It is important to our profession to assist in developing ways to measure and report on environmental and social performance.

Upton: Corporate accountability is only beginning. As community leaders, we should be aware of the sustainability issues facing the organizations in which we participate.

SCACPA is putting this issue in front of our membership.

REGARDING SUSTAINABILITY, WHAT DO YOU BELIEVE ARE THE MAJOR CONCERNS? Waycaster: One key issue is the global depletion of natural resources and finding sustainable energy sources for the future.

I also believe that scarcity of clean water may pose a significant challenge in the next 25–50 years.

Smith: A major concern is educating people on how to improve their home and workplace environments—letting them know that everyone can contribute, and what they can do to help.

Upton: Balancing the cost of “clean” and economically profitable operations is an issue all businesses face. I believe the (888) 557-4814 | www.scacpa.org

Member Profiles long-term benefit of “cleaner and greener” operations will favor more profitable operations. The financial burden of changing a business’s operating paradigms is not an easy sell in any organization.

WHY SHOULD CPAS BE INVOLVED IN SUSTAINABILITY AND ADDRESSING THESE CONCERNS? Waycaster: As trusted advisors, CPAs in various public and private roles have the ability and the opportunity to help shape the future of this evolving area. I think businesses, regulators and others will look to us for answers and direction when it comes to sustainability.

Smith: The companies we work for and clients we assist are becoming more and more aware of sustainability issues, and learning how to measure and report on environmental effects and impacts and comply with increasing environmental standards. CPAs can and should be involved in developing the measures for which we all will eventually have to comply. It is important for our profession to be educated in these areas and be seen as a trusted resource.

Upton: To understand and influence the standards and measurement initiatives that will drive future regulatory and financial reporting requirements.

WHAT ADVICE DO YOU HAVE FOR FELLOW MEMBERS THINKING ABOUT DELVING INTO SUSTAINABILITY PRACTICES? Waycaster: Start with education about the topic in general. Then, it may be best to select one area (such as an industry or technical specialty) in which to become an expert. Since it is such a broad field, it may be difficult from a firm resource perspective to cover a wide area of expertise and service offerings.

Smith: I am in the learning process myself and trying to become more educated in this area.

Focus On Membership

“Balancing the cost of “clean” and economically profitable operations is an issue all businesses face. I believe the long-term benefit of “cleaner and greener” operations will favor more profitable operations.“ Upton: Read articles about the issues, identify the areas in which you can have an impact, and go for it.

WHAT RESOURCES CAN YOU RECOMMEND FOR FELLOW MEMBERS? Waycaster: Start by visiting the Sustainability page on SCACPA’s website, which includes a number of links and educational resources. This page will expand as our efforts expand. The AICPA also has information on the subject, and there are a number of other sustainability websites that can easily be found using your preferred search engine.

Smith: I would recommend Andrew Winston’s books Green Recovery and Green to Gold. I had a chance to hear him speak on sustainability at the Manufacturing

Upton: Articles on SCACPA and AICPA websites as well as “The Greening of GAAP” from cfo.com.

WHAT HAVE YOU DONE PERSONALLY OR PROFESSIONALLY TO BE MORE MINDFUL OF THE ENVIRONMENT? Waycaster: Elliott Davis has a number of green initiatives, including recycling and many energy and water conservation features, incorporated into our facilities. On a personal level, I recycle and drive a hybrid car.

Smith: I recycle and switched to energyefficient light bulbs at home, and just got my office to start recycling paper. I also traded in the SUV last year for a small car.

Upton: I instituted the paperless office initiative in 2006 to coincide with electronic filing initiated in 2000 by my wife and fellow SCACPA member, Nancy O. Upton, CPA. Using the integrated functionality of our tax and accounting software, we have cut paper consumption by 60 percent, produced end products on more efficient printers and reduced many labor-intensive tasks. n

Auditor Malpractice Issues Litigation Consulting/ Representation

Peer Review & Inspections Over 425 system Reviews Conducted Nationwide

John F. Hamilton, CMA, CPA Direct (803) 608-8066

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

Extension Partnership’s national conference in May. He is an excellent speaker and has a lot of great information to share (www.andrewwinston.com).

E m a i l J o hn f h@ a o l . c o m South Carolina CPA Report

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AICPA

Report on Spring 2010 Meeting of AICPA Council

by J. Patr ick “Pat ” M cD er mott, CPA SC ACPA memb er since 1982

T

he spring 2010 meeting of the AICPA Governing Council was held in San Diego May 23-25. I attended as South Carolina’s elected member to the Council along with SCACPA President Eddie Brown, President-elect Tim Baker and Executive Director Erin Hardwick.

Though there were many issues brought before Council at this meeting, due to space limitations I have chosen to report on the topic of most importance. The Council had been prepared at our March regional meeting for the topic, which would be presented for a vote. After much preparation by AICPA staff, the Council was asked to approve resolutions dealing with future membership categories. A total of 14 resolutions were presented to establish some new membership categories or amend and correct existing categories. All 14 resolutions passed unanimously.

NEW AFFILIATE CATEGORIES (all non-voting): • Student Affiliate: Applies to full-or parttime students from high school to college age, with no time limit in category.

• CPA Exam Candidate Affiliate: Any graduate who has applied to take the CPA exam, with a five-year time limit.

• Pre-college Accounting and Business Educator Affiliate: Guidance counselors and teachers at a “pre-college” institution, with no time limit in the category.

NEW ASSOCIATE CATEGORIES (all non-voting): • International Associate: International membership is available for “non-U.S.” accounting credential holders from an organization with which the AICPA has a recognition agreement.

• Non-CPA Associate: Any person who has not passed the CPA exam. Includes non-CPA firm owners, corporate and

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South Carolina CPA Report

“A total of 14 resolutions were presented to establish some new membership categories or amend and correct existing categories. All 14 resolutions passed unanimously.” government finance professionals under the supervision of a voting AICPA member, or those employed by a college or university in a full-time education role in business or accounting.

• AICPA Associate: Those who have passed the exam but do not meet full membership requirements. No time limit.

• Section Membership Associate: Member of any section established by AICPA (IT, Tax, PFS or Forensics).

FULL MEMBERSHIP CATEGORIES • Temporarily Left the Workforce: limits categories to unemployed, not working due to illness, providing longterm care (without compensation) for another, educational leave or family leave.

This category is available to Associate members as well.

• Retired and Honorary: AICPA member for 40 continuous years and reached “full social security retirement age,” or who are employed less than 20 hours per week (computed on an annual basis).

• New Category: Authorized a membership ballot to amend section 2.2 of the bylaws to allow membership to anyone 1) in possession of a valid and un-revoked

certificate, or 2) at any time possessed a certificate that was not revoked for cause, or 3) who meets the education and experience requirements set out in UAA (Uniform Accountancy Act) and who are of good moral character and have never been granted a right to practice. Look for a ballot from the AICPA in the next 180 days on this issue.

THE COUNCIL ALSO APPROVED FOUR “IMPLEMENTING RESOLUTIONS” 1. Any member, affiliate or associate must comply with the Code of Professional Conduct.

2. Authorized the Board to implement the resolutions relative to the affiliate and associate categories passed by the Council.

3. Defined the designations allowed for the International Associate; Affiliate or Associate categories.

4. Finally, that any persons who qualify for full voting membership may not be eligible for affiliate or associate categories of membership.

Learn about more items presented at the AICPA Council meeting at SCACPA’s regional Professional Issues Updates (August 12 – October 5, 2010). n

Pat McDermott, CPA, is treasurer and controller of of The Beach Company in Charleston and has been an active SCACPA and AICPA volunteer leader for nearly 20 years. Prior to his election as AICPA Council Representative last year, Pat served as President of SCACPA in 2008.

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

Board of Accountancy

Board of Accountancy News

by M ar k T. Hobbs, CPA SC ACPA memb er since 1981

T

“This new regulation limits self-study hours to 50 percent (or 20 hours) of the total 40 hours of required CPE. In addition, self-study CPE is not eligible for carry-over. “

he South Carolina Board of Accountancy met June 24, 2010 for its regularly scheduled meeting.

No hearings or disciplinary matters were presented. We received a report from the investigation division indicating 16 active cases under investigation against South Carolina licensees. Suzanne Hawkins, Department of Labor Licensing and Regulation (LLR) Office of General Counsel, provided a report regarding two cases which have been turned over to her office for resolution. The resolution would either result in a hearing in front of our board, or an agreement between the licensee and the board in the form of a Formal Consent Order. The Board of Accountancy can impose a fine up to $10,000 for violations of the South Carolina Accountancy Act.

coffers for other special spending projects.

For CPAs licensed in South Carolina, this means license fees paid by licensees, which were paid to assist the Board of Accountancy in regulating our profession, have been redirected. I requested the specific dollar amount, and details will be provided at our August meeting and shared here in the next issue.

LICENSEE INFORMATION AS OF JUNE 24, 2010

NEW REGULATIONS ADD CPE PARAMETERS

SC Department of Labor, Licensing and Regulation Board of Accountancy phone - (803) 896-4770 email - accthelp@llr.sc.gov New Web site address www.llronline.com/POL/Accountancy/ Administrator - Doris Cubitt, CPA (803) 896-4770 or cubittd@llrsc.gov

for credit. Also, personal development CPE is still limited to no more than 20 percent (or eight hours) of the required annual minimum. Personal development hours are also ineligible for carry-over.

Access SCACPA’s resources on the new BOA regulations at www.scacpa.org/ NewBOARegulations.

NEW OFFICERS

Offices Registered In-state

Out-of-state TOTAL: Licensees CPA Accounting Practitioner Public Accountant TOTAL:

1,247 533 1,780

5,588 121 15 5,724

Proposed regulations presented in the First Edition 2010 of The CPA Report were adopted—I urge each of you to review these new regulations and determine the impact, if any, on your practice. One of these new regulations relates to limits on the annual number of hours of self-study CPE allowed for credit for South Carolina licensure. This new regulation limits self-study hours to 50 percent (or 20 hours) of the total 40 hours of required CPE. In addition, self-study CPE is not eligible for carry-over.

FIRM REGISTRATION The board discussed current policy that requires each office of a firm to register separately with the Board of Accountancy. It was the consensus of members present that this policy should be re-considered. Staff is developing statistics and will include this as an agenda item in August.

Sharon Dantzler, LLR Office of Legal Counsel, advised that the SC Legislature redirected more than $2,000,000 from LLR

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

Self-study courses must be approved by Quality Assurance Service (“QAS”) of the National Association of State Boards of Accountancy. SCACPA asked the board to clarify the definition of “self-study.” The Board discussed Internet-based webinars that involve group interaction—these are not considered self-study, but should be classified as group-study. These programs often require participation by participants to record certain codes when submitting

Officers were elected as follows for the 2010-2011 year: Chairman - Bobby R. Creech Jr., CPA Vice Chairman - Mark T. Hobbs, CPA Secretary -Tony A. Callander, CPA Our next meeting is scheduled for August 19, 2010, beginning at 9 a.m. in Room 108 of the Kingstree Building, 110 Centerview Drive, Columbia in the Synergy Business Park. You can also watch live or archived meetings online at www.llronline.com. Click View Live Board Meetings and then the Accountancy Board. n

Mark Hobbs, CPA is the managing partner of The Hobbs Group, PA in Columbia. A past president of SCACPA, Mark currently serves on SCACPA’s Nominating and Investment Committees as well as the Long Range Planning Task Force. He may be reached at mark@hobbscpa.com.

South Carolina CPA Report

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Essential Overview of Peer Review and Accounting Matters

by John F. Hamilton, CPA, CMA SC ACPA memb er since 1970

T

o help members keep up with changes to the AICPA Peer Review program, we have prepared a compilation of important updates and reminders.

event disclosure is necessary, the evaluation date must be disclosed in the notes to the financial statements. Consider adding this evaluation date to the management’s representation letter.

SSARS NO. 19. There are impeding standard effective for engagements ending on or after December 15, 2010.

Most significantly, the accountant is not precluded from disclosing a description in the compilation report about the reason independence is impaired. Major changes, however, are on review engagements, particularly in performance of review procedures. It introduces a new term for us, review evidence. We will have to tailor procedures based on our knowledge and understanding of the client and its industry, and awareness of the risk that the client may fail to modify financial statements that are materially misstated. Previously mentioned only in our audits, materiality is blending into the review engagement process. A written engagement letter with the client will be required.

SQCS NO. 7. Where is your Quality Control (QC) document? Has it been updated for all professional requirements through January 1, 2009—the date when it was mandated?

SQCS No. 7 supersedes all previous QC standards and mandates that you have this document in your firm. Even if you don’t provide attest work, professional standards require that we follow these standards. Should you be sued, you will be held to these professional standards.

Some shortcuts are available for small firms, such as completing a questionnaire and declaring that as your QC document.

SQCS 7 also adds a sixth element of quality control and mandates a new pre-issuance review, Engagement Quality Control Review (EQCR).

Subsequent Events. Previously restricted to SAS audit procedures, subsequent events have been added to GAAP disclosure for all full-disclosure financial statements, compilations included. In addition to disclosing the required post balance sheet events, disclosure should now state to what date management has evaluated subsequent events. Even if it is determined that no

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South Carolina CPA Report

Codification. Since GAAP is now codified, FASB statements no longer exist. Do the notes in your client’s financial statements make reference to FASB? Have your client used generic terms such as “in accordance with professional standards” or “in accordance with generally accepted accounting principles” in their footnotes?

FIN 48D—or, is FIN 48 really dead? FIN 48R was the footnote disclosure mandate for

“We have moved from a professional judgment-based profession to a rule-based profession.” tax contingencies. It is mostly “dead” for all non-public entities, but one provision was retained. All entities, including tax conduit entities, must disclose all open years subject to audit by various taxing authorities.

Non-Attest. Ethics rule 101-3 mandates that you must document in writing any nonattest work before you perform such work for your client. This documentation must cover certain required criteria including management’s responsibilities assumed. The preparation of tax returns for attest clients is considered non-attest work. Otherwise, you are not considered independent and this will cause serious reporting issues. Litigators also look at issues like this in proving that you did not follow professional standards. Once a jury hears this, your testimony on how you confirmed 100 percent of the accounts receivable tends to fall on deaf ears.

Review Engagements. The Peer Review Committee has seen continued deficiencies in this area. Our accountants’ report indicates we find everything acceptable based on our inquiry and analytics. Typically, peer reviewers discover an inordinate number of substantive procedures, which we never (888) 557-4814 | www.scacpa.org

said we did and upon which we based our opinion. Missing, however, is anything that resembles analytical and inquiry procedures, which we said we did base on our opinion.

Furthermore, when analytical procedures are performed, they appear to be illusive to the mandated requirement of comparing recorded amounts, or ratios developed from recorded amounts, to our expectations. What expectations— last year’s amounts, budgets, industry statistics or the like? It appears the firm was not aware of their own benchmarks.

Limited Scope Audits. In an ERISA audit—even in a limited scope, defined-contribution, self-directed investment audit—you are required to test the participants’ allocation of income, loss and forfeitures along with the test of allocation of contribution, vesting, terminations and other demographic data. Many firms presume this is not a mandated test in limited-scope audits, but it is. Otherwise, your audit procedures do not support your audit report.

AICPA Alert. A recession environment emphasizes that we have greater risks in the areas of fair values, estimations (allowances), fraud considerations, going concern, asset impairment and the like. Please be advised in all of your attest work.

Upcoming Peer Review: Is Your Firm Ready?

August 31 | SCACPA, West Columbia (66610A) What does it take to create an effective quality control system that leads you to a clean, pass peer review report? Prepare for your next review and learn what can be done on a daily basis to create a strong QC environment for your firm. Identify the most common, significant deficiencies and what you can do to prevent them from occurring. Consider the process for selecting the appropriate peer reviewer and the right review year-end for your firm. Those with specialized engagements such as governmental units, not-for-profit organizations, construction contractors or employee benefit plans will learn additional issues that come into play.

Facility: SCACPA, 570 Chris Drive, West Columbia, SC 29169 CPE Credit: 8 Area: Auditing Course Level: Intermediate Leader: Mark T. Hobbs, CPA

Fees: SCACPA Members $235 Non-Members $310 Note: Accepted for CMA and CFM continuing education credit Discounts: AICPA $30, Firm $15

Prism. The AICPA is in the process of implementing a peer review electronic submission process called PRISM. Finally, we have moved from a professional judgment-based profession to a rule-based profession. We continue to have new rules and rule changes to GAAP, SAS, SSARS and the like, and it is difficult to write enough rules to cover every situation. The move to IFRS hasn’t followed the expected timeline. The CPA exam, schools and SEC will include IASB, but there are many subjects like fair value rules that have not been reconciled. The SEC says there should not be much difference between IFRS and GAAP by 2015. In addition, many European countries are playing political hardball.

The most important thing to remember while performing accounting services under our current processional standards: If it isn’t documented, it doesn’t exist! n

John Hamilton, CPA, CMA is a technical reviewer for SCACPA’s peer review program and has served on both the SCACPA Peer Review Committee and the AICPA Peer Review Board. He was recently appointed to the AICPA technical reviewer’s task force and is a partner in Hamilton, McKinney & Moss in Columbia.

A USC graduate, Hamilton currently performs system peer reviews nationwide, consulting on A&A issues and serves as an expert witness for auditor malpractice concerns.

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

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South Carolina CPA Report

29

2010 President of the Grand Strand Chapter of SCACPA SCACPA member since 1995

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u

So

August 30: Professional Issues Update (4 hours, 60910RH). Annual Business Meeting at beginning of PIU (officer election for 2011).

South Carolina October 8: A&A Update with Russ Madray (8 hours, CA100810) November 19: Annual Tax Update with Bill Grooms, includes six hours federal tax and two hours South Carolina tax (8 hours, CA111910)

CPA

CENTRAL

What has been your proudest accomplishment during your tenure?

I am very proud that the Grand Strand Chapter has been awarded the Quality Chapter Award every year that I have been involved. We just make a decision that we are going to get this award and we do what it takes to make it happen. I do see how accomplishing these goals make a better and more beneficial chapter for its members.

COASTAL

Mandy is Director of Finance at CMAC, Inc. headquartered in Myrtle Beach, SC. CMAC Inc. owns and operates 18 Logan’s Roadhouse restaurants located in South Carolina, North Carolina and Augusta, Georgia. Originally from Florence, SC and she has lived Myrtle Beach for eight years. She proudly attended Clemson University and graduated in 1992. When not enjoying the beaches of my hometown her favorite hobby is traveling.

In addition to her role with the Grand Strand Chapter, Mandy currently serves on SCACPA’s CPE Committee and is a past member of the Industry Task Force.

South Carolina CPA Report

CPA

CATAWBA

What have you learned – about our association, fellow members or yourself – by serving as a chapter leader?

The Association is just such an amazing network to be a part of. Attending seminars, meetings and other SCACPA events is a great way to have a statewide network of colleagues. The more involved you become the more you will see the same faces and make career lasting bonds.

The speakers and other guests at these events come from anywhere nationwide and can also prove to be beneficial contacts and resources.

What advice do you have for those considering getting involved and engaged in SCACPA and their local chapter?

JUST DO IT! When I moved to Myrtle Beach I didn’t immediately join the Grand Strand Chapter. Once I joined and became an officer, I realized quickly how much I missed being involved in something in my community and especially an organization focused on my profession. Once you leave public accounting for business/industry, you will find there is no longer a push to be involved in organizations such as SCACPA. Without that encouragement it is easy to forget and to make time for such a commitment. After becoming involved with the Grand Strand Chapter, I realized how much I enjoy being connected to my profession again and how much it benefits me as well as the company I work for. It has also led me to become involved in other community charitable organizations.

South Carolina

September 23: Annual Business Meeting Dinner (CEABM10) October 1: Professional Issues Update (4 hours, 60910CO) October 21: Corporate Law for Accountants (3 hours, CE102110) November 5: Annual Oyster Roast & Harvest Hope Food Bank Drive (CEOR2010)

QUALITY CHAPTER AWARD r Ce

AMANDA “MANDY” T. HALLMAN, CPA

rolina Assoc Ca ia t

tifi

an ts

CHAPTER SPOTLIGHT

th

n io

Chapter Connections

ed nt Public Accou

CENTRAL, COASTAL, FOOTHILLS, GRAND STRAND, SEA ISLAND

CHAPTER PRESIDENTS Suzanne Merritt, CPA, Catawba Amy Cain, CPA, Central Richard Ett, CPA, CFM, CFP, Coastal Kara Shealy, CPA, Foothills Amanda Hallman, CPA, Grand Strand Bryan Rabon, CPA, Pee Dee Melanie Hill, MPA, CPA, CMI, FLMI, Piedmont Patrick Carey Jr., CPA, Sea Island

PIEDMONT

August 31: Professional Issues Update (4 hours, 60910SP). Annual Business Meeting at beginning of PIU (2011 officer election).

September: Student Night Fall: Bankers’ Night November 18: Annual Tax Update with Bill Grooms (8 hours, FO111810)

August 25: Education and Networking Series with the Association for Financial Professionals (AFP), United Way and Clemson University.

CPE Seminar: Non-Profit Update: Governance and Funding Issues in our Challenging Economy with Stuart Sobel; additional one hour topic TBA (2 hours, PI082510) September 27: Education and Networking Series (2 hours, PI092710) September: Annual Business Meeting October 4: Greenville Professional Issues Update (4 hours, 60910GR) October 5: Anderson Professional Issues Update (4 hours, 60910AN) October 25: Education and Networking Series (2 hours, PI102510) November 17:Education and Networking Series CPE Seminar with Brian Tankersley (2 hours, PI111710)

GRAND STRAND

SEA ISLAND

September 8: Technology Update with Randy Johnston (6 hours) and Current Tax Update with Dr. Caroline Strobel (2 hours) (CO090810) September 27: Professional Issues Update (4 hours, 60910CH) October: CPE Seminar (4 hours) November 1: Federal Tax Update with Jack Surgent (8 hours, CO110110)

FOOTHILLS

August 13: Professional Issues Update (4 hours, 60910MB) September 22: Annual Business Meeting (tentative date) October 20: Meet & Greet with CCU Accounting Students (tentative date) November 5: A&A Update with Russ Madray (8 hours, GR110510)

PEE DEE

September: CPE Seminar (4 hours) September: Annual Business Meeting November: Chapter/Student Bowling Night

September 27*: Building a State Tax Practice: How Practitioners and Companies Can Do More with Less (4 hours, SE092710) September 27*: Professional Issues Update (4 hours, 60910SI) November: Professionals’ Night (SEPN10) * Register for both SE092710 and 60910SI to earn up to 8 hours of credit.

Chapter members please note: Register on or before the early bird discount deadline (three weeks prior to each event) to receive free or discounted registration fees.

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

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With regard to the specific types of insurance planning support services we provide, here is a list of some, but not all, of our capabilities: Life Insurance Planning • Long-Term Care Insurance Planning • Disability Insurance Planning • Annuity Planning • Personal Estate Planning • Key Person Life Planning • Wealth Transfer Planning • Wealth Preservation Planning • Buy-Sell Planning • Wealth Accumulation Planning • Business Succession Planning • Comprehensive Insurance Policy Review • Business Estate Planning • Tax Advantaged Planning Strategies • Captives

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If you have questions, contact Dianne Odom or Raymond Scruggs at 803-407-1040 South Carolina CPA Report 31 or by email Dianne@TIPoftheCarolinas or Raymond@TIPoftheCarolinas

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

Member News

Focus On Membership

IN THE NEWS

Stephen D. Kirkland, CPA CMC, CFC, Kirkland, Thomas, Watson & Dyches, LLC, was a feature writer May edition of Columbia Business Monthly magazine.

Angel T. Marvin, CPA, Abacus Planning Group, Inc., was a guest on ETV Radio’s South Carolina Business Review in June.

AWARDS AND CERTIFICATIONS

Clemson University’s Board of Visitors has recognized Steven H. Crump, CPA, associate comptroller in the university’s financial affairs office, with its Service Award. The award is given to nonfaculty employees who have supported students and the goals of the university in an exemplary and sustained manner.

Clemson Board of Trustees Chairman David Wilkins, left, and Board of Visitors Chairman Tom LaRoche, right, present the Service Award to Steve Crump.

Image by Clemson University

Malynda M. Grimsley, CPA, a shareholder of The Hobbs Group, P.A., has successfully completed the certification process with the National Association of Certified Valuation Analysts (NACVA) to earn her designation of Certified Valuation Analyst (CVA).

S. Hunter Howard Jr., CPA, Scott McElveen, LLP, has been appointed to serve a full term on the board of directors of the Greenville Area Development Corporation (GADC). The GADC is the county-chartered organization tasked with promoting and enhancing the economic growth of Greenville County.

James King, CPA/ABV/CFF, CVA, CFE and Patrice Sebastian, MBA, CPA/ABV/CFF, CVA, CFE, WebsterRogers LLP, have recently been awarded the certified in financial forensics (CFF) credential by the American Institute of Certified Public Accountants.

Scott A. Leister, CPA, MBA, Elliott Davis, LLC, graduated from Leadership Grand Strand in May. Sponsored by the Myrtle Beach Area Chamber of Commerce, the program’s goal is to develop a corps of informed, committed and qualified individuals capable of providing dynamic leadership for the Grand Strand area.

Jonathan B. Moore, CPA, Milliken & Company, recently completed the Certified Management Accountant process to earn the CMA designation.

Russell Quattlebaum, J.W. Hunt & Company, LLP earned the International Masters in Business Administration (IMBA) from the University of South Carolina Darla Moore School of Business.

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South Carolina CPA Report

L. Kent Satterfield, CPA, Dixon Hughes PLLC, received a distinguished alumni award from the Darla Moore School of Business at the University of South Carolina during the school’s 15th Annual Business Leadership Dinner and Awards Program.

K. Leigh Schaefers, CPA was named one of the Charleston Regional Business Journal’s “Forty Under 40” for 2010. The program salutes a total of 40 people who are 40 years of age and younger and are making their mark with professional success and community involvement.

PROMOTIONS

Elliott Davis, LLC is proud to announce that R. Jason Caskey, CPA has been named Office Managing Shareholder of the firm’s Columbia location.

The shareholders of Elliott Davis, LLC have admitted Lee E. Haynes, CPA as shareholder in the firm’s Charlotte, N.C. office and Greg W. Isley, CPA to the firm’s shareholder group. Isley will be based in the firm’s Charleston, SC office.

Gregory (Greg) P. McLain, CPA, CITP was promoted to Vice President of Finance of Benefitfocus.

McDonald and Hudson, CPAs is proud to announce that Lee McDonald Stalvey, CPA has been named as a partner.

CONDOLENCES

Foy Norton Chalk, CPA died at the age of 65 on June 15, 2010.

Born in Kingstree, SC, Foy was a certified public accountant by occupation, earning his CPA and joining SCACPA in 1971. He was an avid outdoorsman who loved hunting and fishing. His true passion in life was helping others anonymously. Memorials may be sent to Fellowship of Christian Athletes, 100 Executive Center Drive, Suite A-4, Columbia, SC, 29210. Contributions will pay for camp scholarships for the underprivileged.

Robert Sanders Jr., CPA died January 14, 2010. Born July 17, 1924 in Ridge Spring, he was a son of the late Robert Wade Sanders and Myrtle Baker Sanders. Shortly after his graduation from Columbia High School, he joined the U.S. Navy. After boot camp he was assigned to the battleship USS Texas, where he spent his entire service. He was proud to see duty off the Normandy coast on D-Day and then in Africa and the Mediterranean area. The ship was then sent through the Panama Canal and to the Pacific Rim area where it was engaged in some of the heaviest battles, including Iwo Jima. Upon his return to the U.S., Sanders traveled by troop train across the country from San Diego to Charleston to receive his honorable discharge. Bob took advantage of the educational (888) 557-4814 | www.scacpa.org

Member News opportunity earned through his military service and enrolled in the University of South Carolina. He graduated with honors in 1949 having earned a BS degree in Business Administration and majoring in Accounting. In May of 1949 he was named to the prestigious Phi Beta Kappa honorary fraternity. Prior to graduation he also successfully passed the exams to be a certified public accountant.

Bob joined J.W. Hunt & Company, LLP in Columbia and achieved the two years of work experience necessary for official certification. He was admitted to SCACPA in 1951, AICPA in 1953 and in 1993 was recognized for 40 years of honorary membership. He became a lifetime member of SCACPA in 2008. Most of his professional work was in public accounting, but for two years he was controller of McCrory Construction Company in Columbia.

As a member of Ebenezer Lutheran Church, Bob served on the Congregation Council, the Stewardship and Finance Boards, the Social Ministry Committee and was a Sunday School teacher. In 1952 he was elected treasurer of the Luther League of America, a national youth auxiliary of the United Lutheran Church in America.

In lieu of flowers, memorials may be made to Ebenezer Lutheran Church General Fund, 1301 Richland St., Columbia, SC 29201 or The Living Word Chapel c/o The Lutheran Homes Foundation, 300 Ministry Drive, Irmo, SC 29063.

SHARE YOUR NEWS

The deadline for the Fourth Edition is September 30, to be mailed the first week of November. Staff Contact: Katherine Swartz, CAE (kswartz@scacpa.org).

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

Focus On Membership

MEMBERS ON THE MOVE

Elizabeth A. Bagwell, CPA is now with AbitibiBowater Incorporated in Greenville.

Steven B. Barnette, CPA is now with AbitibiBowater Incorporated in Greenville.

Hollis H. Besosa, CPA has joined JSSR Investments LLC in Mount Pleasant.

Justin R. Black is now working with the City of West Columbia.

Jason L. Boehm, CPA has joined OTO Development, LLC in Spartanburg.

Catherine B. Boortz, CPA is now working with the Greenville Drive in Greenville.

Jaime R. Daniel, CPA has joined A.T. Locke, PC in Greenville.

Robert W. Emory, CPA is now working with the Education Corporation of America in Charleston.

Charles W. Felkel, CPA joined Grant Thornton, LLP in Columbia.

Lauren R. Floyd has joined Elliott Davis, LLC in Greenville.

Matthew T. Foreman, CPA, MBA is now working with Security Finance Corporation in Spartanburg.

David A. Frost, CPA is now working with IntegriFirst, Inc. in Conway.

Jennifer N. Gahl, CPA has joined Mims McDuff & Wood, PA in Beaufort.

David M. Herpel, CPA has joined Wilson & Quirk, LLC in Charleston.

Steven E. Hicks, CPA is now working with Wells Fargo Advisors in Columbia.

Jane W. Honeycutt, CPA is now working with South Carolina Student Loan in Columbia.

George H. Howell, Jr. has joined Bishop Gadsden Retirement Community in Charleston.

Kayce A. Hughes, CPA is now working with Gildan USA in Charleston.

Donald L. Hunter, CPA has joined Parker Hunter Spivey, CPA, LLC in Myrtle Beach.

Tracey M. Jacob, CPA is now working with Brainpower, LLC in Irmo.

Elizabeth L. Monteith has joined Elliott Davis, LLC in Columbia.

Joseph M. Nygard, CPA has moved to the Dallas, Texas branch of Grant Thornton, LLP. Anthony C. Prestipino Jr., CPA is now working with SC United Methodist Church in Columbia.

Cassandra D. Price, CPA is now working with ArbonGen in Summerville.

Victoria R. Shanahan, CPA is now working with the Town of Hilton Head in Hilton Head.

Danny A. Stevens, CPA is now working with CB Mart in Belton.

Sarah Tollison has joined Christine E. Cassidy, PA in Hilton Head Island.

Jennifer L. White, CPA is now working with the Fort Mill School District in For Mill.

FIRM NEWS

Contessa H. Bowie, CPA recently opened Contessa H. Bowie, CPA in Greenwood.

Angela W. Hayes, CPA has opened Hayes Tax and Accounting Services in Spartanburg.

H. Lee Hoffman, CPA, PA has a new partner and is now know as Hoffman & Hoffman, CPA, PA. Carl F. Kuhn Jr., CPA has opened Carl F. Kuhn Jr., CPA in Lexington.

Martha L. Long, CPA recently opened Martha L. Long, CPA in Seneca.

Molony & Associates, Inc. recently changed partners.

Christine K. Root, CPA opened Christine K. Root, CPA in Columbia.

George O. Short III, CPA, CFE has opened George O. Short III & Associates, PC in Greenville.

RETIREMENTS

K. Brodie Brigman Jr., CPA of Anderson James R. Lingle Jr., CPA of Florence Horace D. Padgett Jr., CPA of Anderson

Steven D. Walls, CPA of Lexington William C. Weeks, CPA of Greenville

South Carolina CPA Report

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Feature

CPA Day at the State House SCACPA’s fourth annual CPA Day at the State House was held Wednesday, April 28 in Columbia. Following a two-hour legislative briefing, participants took a short walk to the State House grounds for a picnic lunch. Joining us for hot dogs and hamburgers (along with oldfashioned sodas in glass bottles and MoonPies®) were some 100 CPAs, 90 new CPAs and their guests and 250 legislators and legislative staff. State Treasurer Converse Chellis, CPA led an Oath Ceremony for new CPAs. All in all it was a very successful event that brought hundreds of people together and gained greater visibility for the CPA profession as a viable entity in the legislative arena.

SAVE THE DATE FOR 2011!

WEDNESDAY, MAY 4

Special Thanks to CPA Day Volunteers!

Timothy L. Baker, CPA Charles E. “Eddie” Brown, CPA Richard “Rick H. Ett, CPA, CFM, CFP J. Bratton Fennell, CPA Jennifer S. Floyd, CPA

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South Carolina CPA Report

Kathryn G. Heeney, CPA, MBA Melanie C. Hill, CPA, CMI, MPAcc, FLMI Allen A. Hodges, CPA Matthew P. Hodges, CPA Amanda “Mandy” T. Hallman, CPA

Penny A. Lewis, CPA Sheryl G. McAlister, CPA, CFP J. Pat McDermott, CPA Suzanne M. Merritt, CPA Kara S. Shealy, CPA

Robert M. Tilton, CPA Jada W. McAbee, CPA Beth T. Zamorski, CPA

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

Oath Ceremony Ushers 42 New CPAs Into the Profession

S

CACPA and the South Carolina Board of Accountancy hosted the bi-annual New CPA Oath Ceremony April 28, 2010 in conjunction with CPA Day at the State House. The event was officiated by SCBOA Chair Bobby Creech, CPA, SCACPA President Eddie Brown and State Treasurer Converse Chellis, CPA and sponsored by ADP Small Business Services, Elliott Davis, LLC and Burkett, Burkett & Burkett CPAs, PA. More than 120 CPAs were invited, which included new licensees between October 2009 and March 2010. The next ceremony will take place Friday, November 12 in conjunction with the CPA Summit and Tax Conference. View photos from the event: www.scacpa.org/Facebook

South Carolina New CPAs from October 2009 – March 2010

CPA DAY BY THE NUMBERS n 181 SCACPA members and guests attended n 42 New CPAs took the Oath of a South Carolina CPA n 56 Legislators (including 53 House Representatives and 3 Senators) and more than 220 Legislative staff members attended n More than 500 total attendees

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

Ashley C. Allen• John M. Aycock III• Erin C. Bailey Chrostopher Baum*• Jeremy S. Betsill• Charles A. Bevis* Laura Blanton Carol R. Bodnar* Tara Bolton John E. Brenneman• Amanda S. Brinkley• Rommel Caldas Jonathan M. Carie Anne Marie Christian Phillip G. Cignavitch Blair E. Clawson• Cynthis E. Coldren• Brent R. Cooler*• Michael Crocker• Charles R. Cserny Anna L. Cuson* Janna Dalton* Amanda J. Dearing• Christine Dupont Susan D. Eidson*• Alan R. Eisenman* Kelley Elders• Chantelle R. Engle John S. Evans Charles W. Felkel*• Margaret S. Felkel*• Erin S. Finley Ashley S. Floyd Lisa R. Frye Bradley R. Gabosch

Benjamin P. Galaska Glenn F. Givens*• Russell D. Gladden*• Jennifer N. Griffith Paul E. Griz*• Ute Claudia Haeussermann Andrew R. Hall*• Michele M. Hansen Brooke K. Harmon*• Lindsay M. Harrelson*• Ojima A. Harris Melissa A. Haynes Evan M. Hobbs*• James Hudson• Nancy J. Hune Douglas A. Hunt Jessica A. Hunt Shawn M. Hutchinson Caroline K. Inman• Sharon E. Johnson*• Markita L. Jones• Thomas R. Kassekert• Tyler M. Keisler*• Erin M. Kelley*• David E. Knobeloch*• Dabid M. Knoble• Rebecca R. Kowalk*• Holly Lee* Karen A. Licciardello Lester L. Lippincott Benjamin M. Lynch*• Joseph E. Maddox III Jeffrey L. Mahon• Robert W. Majernik*•

Robert J. McMillan Steven P. Milas Robert P. Mild Wends J. Mistak Richard A. Montgomery Rachel K. Moore*• Timothy L. Morton• Jessica L. Moser• Ashlee M. Nemes Mathew A. Nesbett• Elizabeth W. Nichols• Christopher P. Nicholson Matthew A. Patterson William R. Prevost• Joshua M. Price*• Gerald D. Puchir• Christina Putnam Teresa M. Raines*• James B. Reese Chad W. Reingardt Stephan P. Riley*• Elizabeth B. Ringham• Blair K. Salmon* W.A. Sanders• Cynthis A. Saunders• Ralph F. Saville Donna M. Schnupp• Mary S. Schultz Sarah R. Schwieger Laura S. Self*• Jessica C. Sellers• Tarang A. Sharma• Jennifer E. Shechter-Liss*• Marilla S. Showalter• John N. Simon*•

Amanda J. Simpson• Stacey R. Singleton*• Matthew H. Slack Veronia Snodgrass Elizabeth M. Stalvey*• Emily R. Temple• Edward L. Thompson III• Jeremy E. Tibbs* Murrell C. Timmons*• Jeffrey M. Tkacz• Alexander L. Torr• Adelle Y. Torres Dawn P. Tullock• Russell A. Vedder• Maria E. Walls• Hope P. Warren*• Ruth R. Warren Audrea L. Watlington*• Ashley D. Wheeler Delitha D. Wooten• Adam J. Zafiroff*• Michael J. Zarra Min Zhang* Jody A. Zieverink • New CPAs who are members in good standing of the South Carolina Association of CPAs. *New CPAs who attended the Oath Ceremony on April 28, 2010.

South Carolina CPA Report

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Feature

T

he CPA Report First Edition 2011 will feature a special section dedicated to healthcare reform

legislation and its impact on CPAs and South Carolinians.

Leading up to that issue, the Editorial Board is seeking contributions on little-known special provisions of the legislation and how they affect the CPA profession.

Special thanks to Dr. Bill Grooms, Anthony Masino and Mark Riley for contributions to this issue.

Major Provisions of the Health Care Reform Act

by William M. Grooms, CPA, PhD SC ACPA memb er since 1967

F

irst, recognize that there are two major acts: the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. These two acts may be referred to as the Health Care Act. The second Act changed parts of the first and added certain new parts to the same. There have already been various changes approved by the Congress and signed into law by the President, and we will see other changes with the passage of time. This article, which will appear in multiple parts, will cover some but not all of the matters as they affect taxation. In addition, it will address what happens each year because of the Health Care Act. SMALL BUSINESS TAX CREDIT Beginning in 2010, small businesses may become entitled to a tax credit. This credit will reduce the businesses income tax or their AMT tax but not their employment tax for 2010. To get all of this credit, the business must have no more than ten FTEs (full-time equivalent employees), and those FTEs must have an average salary of not more than $25,000.

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South Carolina CPA Report

DEFINING FTES The number of FTEs is figured by dividing the number of hours worked by all eligible employees by 2,080. Interestingly enough, that is 52 weeks times 40 hours per week.

One cannot count more than 2,080 hours worked by any one employee. Therefore, if an eligible employee worked more than 2,080 hours (a lot of overtime), only the first 2,080 hours are counted. We do, however, count the hours of part- and fulltime employees. Seasonal workers do not count unless they work more than 120 days.

Having arrived at the total hours worked by all eligible employees, divide the same by 2,080 to determine the number of FTEs the business employs. To obtain the maximum credit, this number cannot exceed 10.

Then add total salaries to determine their compensation. The total compensation amount is divided by the number of FTEs to determine the average salary. To secure the maximum credit, this average cannot exceed $25,000. With these criteria, one can easily see that the full credit will only be secured by small businesses.

DEFINING ELIGIBLE EMPLOYEES Any person except a sole proprietor, a partner, two percent owner of an S Corp., or five percent owner of a C Corp—plus anyone living in the household of such person or their family members—can be an eligible employee.

The credit is 35 percent of the eligible premium paid for health insurance by the employer. The eligible premium is the smaller of the premium paid by the employer, or the amount set by the IRS for your state. On May 3, 2010, the IRS in Rev. Rul. 2010-13 set forth that amount.

For South Carolina it is $4,899 for self-only coverage and $11,780 for family coverage.

There is a limited credit available for slightly larger businesses and for tax-exempt organizations.

In addition, other changes in the tax law occur in the years to follow. This information will appear in next month’s journal. n

William M. Grooms, CPA,PhD Bill Grooms is a sole practitioner in Columbia, South Carolina with more than 40 years experience in his field.

He was previously a partner of Ernst & Young, LLP, and a CPA with Clarkson, Harden & Gantt, Arthur Young & Co., and the Internal Revenue Service. Mr. Grooms has been president of both the Central Chapter of SCACPA and the Columbia Estate Planning Council as well as past chairman of the SCACPAs Tax Committee and a past member of the AICPA Tax Division’s Executive Committee.

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

Governmental Healthcare Oversight—The 1099 Tsunami

by Anthony G. M a sino, JD, CPA SC ACPA memb er and O n Campus Champion since 2010

T

he fine print of The Patient Protection and Affordable Care Act of 2010 includes a complex Section 9006 which has major impact on the business community Form 1099 reporting requirements. The burden will be extremely costly and time prohibitive on the business community.

Under current IRC guidelines, Form 1099 is used to document and report non-wage income from a variety of sources like contract work, dividends, interest, and pension distributions. On an annual basis, businesses are required to issue Form 1099s for payments made to non-employee individuals for services provided if the total annual payments to the individual exceed $600 a year. Under the Act, payments in excess of $600 made after December 31, 2011 for services and/or goods (without differentiation between individuals and corporations) must be reported via Form 1099.

Amendments required by the Act revise IRC §6041(a) to state (modifications dictated by the Act are italicized in bold): (a) Payments of $600 or more All persons engaged in a trade or business and making payment in the course of such trade or business to another person, of rent, salaries, wages, amounts in consideration for property, premiums, annuities, compensations, remunerations, emoluments, or other gross proceeds, fixed or determinable gains, profits and income (other than payments to which section 6042(a)(1), 6044(a)(1), 6047(e), 6049(a) or 6050(a) applies, and other than payments with respect to which a statement is required under the authority of section 6042(a)(2), 6044(a)(2), or 6045), of $600 or more in

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

“Think about it—all payments in excess of $600 to any vendor will be reported via Form 1099. Spend more than $600 at Wal-Mart on the annual company picnic—send a Form 1099 to Wal-Mart. Buy more than $600 of doughnuts for weekly Monday morning business meetings—send a Form 1099 to Krispy Kreme.” any taxable year, or, in the case of such payments made by the United States, the officers or employees of the United States having information as to such payments and required to make returns in regard thereto by the regulations hereinafter provided for, shall render a true and accurate return to the Secretary, under such regulations and in such form and manner and to such extent as may be prescribed by the Secretary, setting forth the amount of such gross proceeds, gains, profits and income, and the name and address of the recipient of such payment.

The revised IRC §6041(a) has two major changes that will create an avalanche of paperwork. First, payments for goods and property in excess of $600 which are excluded under current guidelines will be reported via Form 1099 under revised guidelines. The second change modifies the current Form 1099 reporting exemption for payments in excess of $600 to corporations.

Under revised guidelines, all payments in excess of $600 for services, property and/ or goods will be required to be reported via Form 1099. The corporate exception has been eliminated.

Think about it—all payments in excess of $600 to any vendor will be reported via Form 1099. Spend more than $600 at WalMart on the annual company picnic—send a Form 1099 to Wal-Mart. Buy more than $600 of doughnuts for weekly Monday morning business meetings—send a Form 1099 to Krispy Kreme. Spend more than $600 a year on rent, utilities, etc.—send a Form 1099 to your landlord, the power company, the cell phone provider, etc. The list of potential Form 1099 recipients is never ending.

The full impact of the Act’s modifications will not be fully known until the IRS issues regulations. The IRS has not provided a timeline for public hearings or a schedule on releasing regulations (unlikely to happen this year). Until that time, we have to take the amendments to IRC § 6041 at their full force. The likelihood of the Form 1099 modifications being repealed is slim. News coverage indicates the IRS fully supported the modifications to Form 1099 reporting as an avenue to raise additional revenue.

The IRS estimates the elimination of the exemptions for corporations and goods will provide an additional $350 billion in annual revenues to offset the cost of the Act. The modifications to IRC § 6041 are most likely here to stay.

As CPAs, we need to assist our clients and organizations with this issue now. The change will require businesses to collect tax information from all vendors. Going forward, will we see name, telephone number, fax number, e-mail address and FEIN on business cards? n

Anthony Masino, JD, CPA has more than 15 years professional experience assisting individuals and companies. He is an Assistant Professor with South Carolina State University in addition to a practicing CPA and attorney. He may be reached at amasino@scsu.edu.

South Carolina CPA Report

37

TRANSFORMING THE BUSINESS LANDSCAPE

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Upcoming CPE

The Future of CPE: Relevancy, Value & Convenience B y R eva Brennan, MPA, C AE, IOM S er ving SC ACPA since 2001

P

roviding continuing professional education (CPE) that is relevant, reasonably priced and convenient is increasingly challenging with the various needs of CPAs in today’s market and the regulation changes. To ensure that SCACPA continues to meet members’ needs and provide financially to the operating budget of SCACPA which keeps member dues at a minimum, President Eddie Brown appointed a CPE Business Market Task Force to study the CPE market and provide guidance to the SCACPA Board and CPE Committee.

According to the South Carolina Board of Accountancy (BoA), the general standards for CPE states that each licensee shall complete annually 40 hours of CPE, which contributes directly to the professional competency, with no more than eight hours in personal development, and beginning June 25, 2010, no more than 20 hours in self-study, and no more than 10 hours earned in a calendar day. This combination provides great flexibility in the subject area, with limitations in the method in which hours are earned.

The traditional format of learning, classroom setting with an instructor will always be necessary according to the BoA’s guidelines. With the flexibility of self-study and online training, however, SCACPA needs to evaluate how we offer the right mix of CPE that is relevant, cost effective and convenient?

The most important question regarding CPE was answered by you. How do you want to earn your CPE? In 2008 SCACPA conducted a CPE Survey, and members said they want CPE that is convenient, job and expertise specific, and of value. Therefore, SCACPA’s response is to offer blended learning. We know that different members have different needs, and we believe the key is to apply the right mix of CPE to meet those needs.

The term blended learning is used to describe learning that mixes various eventbased activities, including face-to-face classroom, live e-learning, and selfpaced instruction (self-study). The benefit of blended learning for individuals and organizations is it combines professional development options in a convenient and cost-effective way. Blended learning is a continuous process that combines multiple levels and methods of professional development. It allows you to balance training costs and program development time to optimize your business results.

Regardless of the learning style that works best for you, you can trust the organization that is committed to the CPA profession and its members.

SCACPA is here to meet your educational needs that will increase your competency and meet the needs of your business and clients. n

READ SCACPA’S FAQS FOR THE NEW BOA REGULATIONS: www.scacpa.org/FAQNewBOARegs (888) 557-4814 | www.scacpa.org

Focus On CPE

FALL INTO GREAT CPE SEMINARS WITH SCACPA! SEPTEMBER 17, 2010 Profit Improvement: 10 Tips for a Better Bottom Line (66810) SEPTEMBER 21, 2010 Excel for Advanced Users - Advanced Capabilities, Concepts & Applications (67010) SEPTEMBER 23, 2010 North Carolina Ethics (67410AM and PM) SEPTEMBER 30, 2010 Succession Planning: Developing Tomorrow's Leaders Today (67910) OCTOBER 26, 2010 Learn to Do a Nexus Study to Build Your State and Local Tax Practice (68110) NOVEMBER 5, 2010 AICPA's Technical Hotline Annual Update: Top 10 GAAP Speed Bumps (68410A)

UPCOMING TECHNOLOGY SEMINARS! AUGUST 21, 2010 Excel for Advanced Users - Advanced Capabilities, Concepts & Applications (67010) AUGUST 22, 2010 Technology's Greatest Hits 2010 (67110) NOVEMBER 18, 2010 QuickBooks Reconciling and Analyzing Financial Statements (68810AM) NOVEMBER 18, 2010 QuickBooks Advanced Financial and Operational Reporting (68810PM) NOVEMBER 19, 2010 Excel Macros - Part 1 (68910AM) NOVEMBER 19, 2010 Automating Workflow to Improve Control and Profitability (68910PM) NOVEMBER 29, 2010 Paperless Office - Managing Documents in a Digital World (69210) NOVEMBER 30, 2010 Business Continuity and Disaster Recovery (69310) South Carolina CPA Report

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Upcoming CPE

Focus On CPE

Emerging Leaders Conference

September 23 - 24, 2010 | Charleston

SCACPA’s 2010 Emerging Leaders Conference is specifically designed to help you develop the critical skills and competencies to achieve long-term success and satisfaction as a CPA. This event is unique in that it offers a chance to connect with up-and-coming CPAs all while obtaining necessary training in both technical and personal development topics. It’s the perfect opportunity to enhance your leadership skills and network with other peers in the profession.

Are You a Future Leader?

Sponsored by

a division of Synovus Bank, Member FDIC

SESSIONS AT A GLANCE State of the Profession: Ten Paradigm Shifts on the Horizon for CPAs • Politics 101: How Does the Political Environment Affect You? • Audit Update • Tax Update • The State of Financial Literacy in South Carolina: How CPAs Can Make a Difference • Excel Tips and Tricks for CPAs • Practical Ethical Considerations for the CPA • CPA FAQs: Tax Tips for the Auditor and Financial Tips for the Non-Auditor • Financial Planning Considerations for Young Professionals • Insurance Considerations for Young Professionals: What You Need to Know About Life & Disability Insurance • Fraud in the Workplace • The Polished Professional • Building Your Professional Network

Women in Leadership: What’s the Buzz

October 28, 2010 | Columbia

The Women in Leadership Conference is designed to promote the important role that women play by serving on boards and in executive leadership positions. As agents of change, SCACPA’s primary mission through this program is to advocate, educate and connect accomplished women with the goal of increasing the number of women serving on Corporate Boards and in Executive Suites. Not only is SCACPA’s goal to help companies diversify their boards and increase their talent pool, it is helping female executives expand their influence and increase their visibility by providing a forum where executive women can unite, network, and leverage best practices within an organization of their peers.

SCHEDULE AT A GLANCE 8:00 am Registration/Breakfast 8:30 am Update on the AICPA’s Women’s Initiatives 8:55 am Women in Transition 10:10 am Break 10:25 am Overcoming the Superwoman Syndrome 12:05 pm Lunch with Women to Watch Awards Presentation 12:55 pm The Challenges of Women Working with Women 2:35 pm Break 2:50 pm Increasing Your Personal Power

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South Carolina CPA Report

ABOUT THIS EVENT Location: Embassy Suites, Columbia Credit: 8 hours Field: Personal Development Method: Lecture Level: All

2010 Fall Conferences You Don’t Want to Miss!

SEPTEMBER 16, 2010 VALUATION & LITIGATION CONFERENCE Leveraging Opportunities: Optimizing Your Accounting Expert This conference explores the technical and ethical aspects of being an accounting expert witness and winning.

SEPTEMBER 27, 2010 GOVERNMENTAL BONUS WORKSHOP Cover All Your Bases Are you covering all your bases when conducting and audit to discover fraud?

Attend this workshop and find out what you can do to protect the government and taxpayers from fraud.

OCTOBER 11-12, 2010 INDUSTRY CONFERENCE Focused on Solutions The concept is to focus on solutions, not problems; strengths, not weaknesses; and what’s going well, rather than what has gone wrong. This change in thinking leads to a positive and pragmatic way of making progress. Attend this conference and gather all the information needed to help you focus on the solutions!

OCTOBER 19, 2010 PERSONAL FINANCIAL PLANNING CONFERENCE Weathering the Storm With the declining stock market and home values, multiple bank and investment firm failures, credit crunch and increased costs for health care and every day necessities we must be prepared to weather the economic storm. Attend this conference to gain knowledge and network with other professionals in the financial planning arena.

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

A

s we celebrate the 95th anniversary of SCACPA, reflecting back is the key to looking forward. Despite the upheaval of national healthcare reform, new regulatory changes and challenges confronting the profession, coupled with the financial pressures of the market, the Summit is designed to provide you with the keys to looking forward. CPAs, their businesses and their clients can unlock the door to success and overcome potential hurdles by adopting approaches that deliver on transformational ideas and business solutions. The idea is working together toward a common goal.

Looking Forward, Reflecting Back 1915 - 2010

2010 CPA SUMMIT & TAX CONFERENCE Novemb e r 1 1 -1 2 , 2 0 1 0 • Co l u mbia , S o u t h C aro l in a Packed with more than 20 CPE sessions relevant to today's CPA, the Summit is a must-attend event. Customize your CPE experience by choosing from sessions on A&A, tax, practice management, technology, leadership and more. Don't miss the opportunity to network with peers and Association leaders from around the state and attend the Annual Meeting.

DISCUSSION LEADERS Kyle Anderson, A&A Update & Review, Inc. David Aughtry, Chamberlain, Hrdlicka, White, Williams and Martin Heidi Brundage, American Institute of CPAs Carlton Collins, Accounting Software Advisor Greg Conderacci, Business Learning Institute James D'Alessio, Blue Cross Blue Shield Erik Doerring, McNair Law Firm, PA

Summit Highlights:

Tim Doupnik, University of South Carolina

n Annual Business Meeting (SCACPA eligible members-only)

Michael Glynn, American Institute of CPAs

n Member Reception

Rick Handel, Department of Revenue

n Circle of Excellence Awards Banquet, honoring SCACPA’s 2010 award winners

Mark Hobbs, The Hobbs Group, PA

n Recognition Luncheon, honoring 2010-2011 SCACPA Scholarship Recipients, with keynote address provided by Paul Stahlin, AICPA Chair Elect

Frances Kleckley, Internal Revenue Service Aaron Nelson, Chapel Hill-Carrboro Chamber of Commerce

n New CPA Oath Ceremony, honoring April-September 2010 newly licensed CPAs in South Carolina

Tim Quinlan, Wells Fargo Securities

n Young CPAs Reception

Thomas Sheaffer, Internal Revenue Service

n Old Guard Reception

Gwen Sonier, Internal Revenue Service

n Managing Partners Breakfast

David Sojourner, Ellis Lawhorne & Sims, PA

n Special Workshop for Accounting Students and CPA Candidates

Paul Stahlin, AICPA Chair Elect Carolina Strobel, University of South Carolina

n 16 hours of unique CPE, offering the hottest topics and speakers in three different tracks!

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

Jennifer Louis, Business Learning Institute

THANKS TO OUR SPONSORS & EXHIBITORS

Gilbert Weiner, Cherry Bekaert & Holland, LLP

1st Global

CAMICO Mutual Insurance Company

American Pensions

Drake Software

BB&T

Southeastern Insurance Consultants, The SCACPA Employee Benefit Plan

BB&T Insurance Services, Inc., The AICPA Professional Liability Plan

South Carolina CPA Report

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Classifieds ACCOUNTING PRACTICE SALES

Buyers: registration is free and simple on our Web site! Selling? We can help you: maximize the value of your practice; experience a smooth process; and achieve confidence that your clients will be in good hands. See our available listings below! If interested contact Brannon Poe at poe@knology.net or call (888) 246-0974. Please see our multi-state listings at www.accountingpracticesales.com.

Charleston - $220,000 Hilton Head/Bluffton - $145,000 Midlands Area - $195,000 Greenville Area - $210,000 Hartsville - $125,000 Spartanburg - $375,000

PROFESSIONAL ACCOUNTING SALES

BUY-SELL-MERGE-FINANCE your practice with USA’s No. 1 Accounting Brokerage Firm. Let our 27 years of CPA firm merger-acquisition experience work for you! We offer complete consulting assistance package to our clients including 100% bank financing so you can cash the seller out at closing.

Current Carolina practices include: Asheville $1,600,000+; Myrtle Beach $125,000 to $300,000; Winston-Salem $175,000; Charlotte $350,000+; ATLANTA $350,000 to $850,000; Many others!

Contact Leon Faris CPA Professional Accounting Sales 800-729-9031 Visit our Web site: www.cpasales.com

BUSINESS ACQUISITIONS

Northeast Ohio fire protection and mechanical/ HVAC contractor seeks to acquire small to medium ($1 million - $10 million revenues) companies in the fire protection, fire extinguisher, alarm/ detection, special hazards, HVAC or mechanical contracting specialties. Asset purchases preferred. Locations in North/South Carolina and surrounding states preferred. Other locations considered. Reply in confidence to sprinklersohio@gmail.com.

ADVERTISER INDEX NEED A PEER REVIEW?

We’re available for both engagement and system reviews. Areas of specialty: Non-profit organizations; local government; and small to medium size businesses in a variety of industries.

YellowBook qualified. Contact: Cox, Cauley & Rockwell, LLC, 2006 N Main Street, Anderson, SC 29621; Phone: (864) 225-8713; E-mail: mrockwell@ coxcpas.com; Web site: coxandcompanycpas.com

SEEKING APPLICANTS

CHARLESTON AREA PUBLIC ACCOUNTING FIRM WITH TWO OPENINGS

South Carolina CPA Report

ADP www.adp.com/accountant.aspx Page 16 American Pensions http://www.ampen.com/ Inside Front Cover

Tax Manager: Seeking CPA with five-plus years tax experience. Primary responsibilities include technical tax review of individual and business income tax returns, tax research and planning, and supervision and development of staff.

Aon/BB&T Insurance Services/ AICPA Professional Liability Insurance Program www.cpai.com Page 9

Staff Accountant: Seeking qualified accountant with two-plus years of experience in business and individual income tax return preparation. Masters degree and CPA preferred.

BB&T www.bbt.com Page 13

Positions include benefits and have opportunity for growth and advancement. Please e-mail resumes to AccountantCHS@gmail.com.

______________________________________ Seeking an experienced Chief Financial Officer with 7-10 years progressive experience. BS in accounting or related field required; Masters degree preferred. Responsibilities include planning, managing and organizing all financial transactions and recordkeeping functions; annual budget development, monitoring and forecasting; management of payroll functions; month-end report preparation; ensuring financial Policies and Procedures are updated and adhered to; conducting financial analyses reporting to management as necessary; preparation and facilitation of auditory requirements. Must be computer literate and experienced in Microsoft Windows, Excel, Word and Quickbooks Accounting System.

Seeking an experienced Accountant with strong attention to detail and organization skills; 3-6 years progressive accounting experience; Business Administration or Financial Management Degree preferred. Responsibilities include applying accounting principles to analyze information to ensure accuracy of reporting, postings and other submissions while utilizing appropriate accounting procedures. Must be computer literate and experienced in Microsoft Windows, Excel, Word and Quickbooks.

Interested applicants for the above two positions (CFO and Accountant) should send their resume to autumnk@scphca.org for consideration. Equal Opportunity Employer.

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Accounting Practice Sales www.accountingpracticesales.com Inside Back Cover

Blytheco www.blytheco.com Back Cover Camico www.camico.com Page 19 First Federal www.firstfederal.com Page 23 John F. Hamilton, CPA JOHNFH@aol.com Page 25 Haynsworth Sinkler Boyd, PA www.hsblawfirm.com Page 38 The Insurance Place of the Carolinas www.thelifeinsuranceplace.com/ carolinas/index.htm Page 31 McAngus Goudelock & Courie, LLC www.mgclaw.com Page 29 Southeastern Insurance Consultants http://siconsultants.com/ Page 4

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

Picture this... next tax season, a chair ...no desk Go with the leader. We provide excellent service and get the best results.

We have qualified buyers waiting. See detailed articles about the process on our website!

AVAILABLE PRACTICES Charleston – $220,000 Bluffton/Hilton Head – $145,000 Midlands Area – $195,000 Greenville Area – $210,000 Hartsville – $125,000 Spartanburg – $375,000

Buyers – Registration is free and simple B r annon Poe, CPA 1. 888. 246. 0974 p oe@ knol og y. net

W W W. A C C O U N T I N G P R A C T I C E S A L E S . C O M

South Carolina Association of CPAs

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

570 Chris Drive, West Columbia, SC 29169 10%

Mixed Sources

Product group from well-managed forests, controlle d sources and recycled wood or fibre Cert no. SW-COC-002946 www.fsc.org Š 1996 Forest Stewardship Council

LLC

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